Chancellor on the road, energy companies cream off, the property tax madness: the editor-in-chief’s weekly review

Good morning dear readers,

Olaf Scholz has certainly had better weeks. First came the scandal surrounding his appearance with Palestinian President Abbas in the Federal Chancellery, who was able to relativize the Holocaust unchallenged on stage next to a petrified-looking German Chancellor. Then the unpleasant appearance in front of the Cum-Ex investigative committee in Hamburg.

And finally the renewed, sharp criticism the approach of the traffic light coalition in the energy crisis. With the gas surcharge, the federal government also provided an incentive to save energy, but weakened it again a few days later with the nationwide reduction in value added tax.

Everything should be better now – in Canada. Together with Vice Chancellor Robert Habeck, Scholz travels across the Atlantic late Sunday afternoon. Superficially, the two want to talk to the Canadians about a hydrogen cooperation.

Indeed it will primarily about Germany’s biggest problem: gas. Canada has plenty of that. But there is no LNG export terminal on the east coast so far – and so far there has been little interest in building one. So it’s quite possible that this will be the Chancellor’s next defeat.

And one more topic bring the two Germans with them: They want to revive talks about the free trade agreement between the EU and Canada (Ceta), which once failed because of the Germans.

If there is an ideal partner If there is a free trade pact, then it is Canada: “An exceptionally liberal society, a pronounced democratic culture, after all the number nine largest national economy – and on top of that blessed with huge natural resources,” writes Handelsblatt commentator Jens Münchrath.

It is all the more incomprehensible that the EU – also because of the German resistance – was not able to conclude this pact for years.

What exactly is happening in Canada my colleague Julian Olk will describe it for you: He will accompany Scholz and Habeck on their journey.

What else kept us busy this week:

1. The gas surcharge was the topic of the past week. It is expensive for consumers. But it has to be, says Federal Minister of Economics Robert Habeck, otherwise energy companies are at risk of collapsing. However, Handelsblatt research has now revealed that of the twelve corporations that are to be supported with 34 billion euros, only very few are actually dependent on state aid. On the contrary. This is likely to lead to heated debates over the next few weeks.

2. What the new gas surcharge for consumers and companies means, our energy team has analyzed for you. It is clear that the costs for gas customers will rise significantly – households of all sizes will feel the effects.

3. The question has been on the minds of many energy experts for weekshow dependent Russia really is on gas supplies to Europe. And for weeks, Gazprom’s top staff have been suggesting that they can compensate for the loss of European business with deliveries to China. But that’s not true: Investor presentations and annual reports that my colleague Catiana Krapp was able to see paint a different picture. Gazprom is overdoing its China business and is far more dependent on supplies to Europe than Putin’s henchmen would like. Nevertheless, Gazprom has now decided to interrupt gas supplies via the Nord Stream 1 pipeline again for three days. The reason: Alleged maintenance work.

4. That delivery services often don’t deliver much more than hot air, when it comes to their business models, has often been described. And yet they were able to collect a lot of stupid money from naive investors. The wind of the New Economy was blowing, in which economic principles seemed to have been suspended. But that’s over – many delivery start-ups are now at risk of falling, as research by Larissa Holzki and Florian Kolf in confidential investor documents shows. In the case of gorillas, Creditreform even advises against doing business with the former founding superstar.

5. After several scandals – including the failure in the Wirecard case – the auditing company EY is planning to spin off the consulting business. Actually, the concept should be ready soon. My colleague Bert Fröndhoff found out from EY insiders what the problem is: it’s about money, fear of lawsuits – and billions in pension costs. One thing is clear: the split will change the market – for the better.

6. Germany was once in the world as a state with an efficient miracle bureaucracy. Today, this bureaucracy is primarily a source of wonder. The most recent example: the property tax reform. The Ministry of Finance proudly calls it “one of the largest tax administration projects in post-war history”. In fact, it’s likely to drive taxpayers crazy – and a few tax officials along with it. You think that’s exaggerated? It’s even worse. Read our big report for the weekend.

7. Investor Michael Burry once foresaw the financial crisis. Now he fears another crash – and sells all his shares: Alphabet, Booking, Apple – everything flew out of the depot. He only holds onto shares in a US prison operator. One would like to discuss with him how he sees his country’s future if prisons are currently the only promising business from his point of view. Thankfully, not everyone is so pessimistic about the future. My colleague Andreas Neuhaus took a look at which stocks other star investors are now betting on.

8th. Finally, we must I can’t spare you from talking about Christmas yet. Due to the massive delivery problems at the end of last year, retailers are already starting to prepare and are placing orders earlier than usual. That gets some suppliers into trouble. And that’s just one of the many problems in supply chains. Because once the goods are in Europe, they may soon no longer be able to be transported: the diesel additive AdBlue is becoming more expensive – and increasingly scarce. This in turn could lead to trucking companies having to leave their trucks at the depot.

9. When I call my colleague Mareike Müller these days, I never really know where to reach her. As the new Russia and Eastern Europe correspondent, Müller is currently traveling somewhere between the Lithuanian capital of Vilnius and the Georgian metropolis of Tbilisi. And her subject area could hardly be more exciting. Her widely read report on Kazakhstan, which as a former vassal state of Russia is just cautiously moving away from Moscow, was published earlier this week. Yesterday, when the outside temperature was 37 degrees, Müller visited a Bitcoin mining farm in a former Soviet industrial area near Tbilisi.

I wish you a relaxing weekend.

Sincerely,
Her

Sebastian Mathes

Editor-in-Chief of the Handelsblatt

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