Race for raw materials: EU forges new alliances

Good morning dear readers,

it is the ingredients that the future is made of: raw materials such as lithium, copper or cobalt that are essential for the transition to a climate-neutral economy. If the European Union wants to implement its Green Deal by 2050 as promised, it urgently needs access to the valuable materials. Because without lithium, for example, there would be no batteries and without batteries there would be no electromobility.

So far, however, the EU has been completely dependent on imports from other regions of the world for many critical raw materials. If they don’t come, the factories come to a standstill. The trauma of focusing on Russian gas for energy supply is still so deep that one does not want to make the same mistake with the raw materials. Because, as the bitter lesson goes, economic dependency also means being open to political blackmail.

To prevent this, several action plans are in the making. The EU is planning a new “Raw Materials Act”, which stipulates that ten percent of Europe’s need for strategic raw materials will be mined within the EU. In addition, approval procedures for new mines are to be significantly shortened. The recycling of raw materials that have already been used should also contribute 15 percent to greater economic independence.

Internationally, the EU is looking for new allies to procure critical minerals. Commission President Ursula von der Leyen is currently on a transatlantic visit to Canada and the USA to promote a kind of “NATO for raw materials”. Europe, Japan, Canada and the USA are already working intensively together to secure critical minerals and metals. At the end of these efforts there could be agreements on mutual resource assistance. The search for the modern treasures has long since become a global security issue.

When politicians speak publicly, it is often more exciting to listen to what they don’t say. Following new revelations attributing the attacks on the Nord Stream pipelines to pro-Ukrainian actors, Defense Minister Boris Pistorius (SPD) was asked about Germany’s support for Ukraine at a meeting with his EU colleagues in Stockholm yesterday. What was missing from his response was a clear commitment to the current course. He just said:

“I’d like to answer a question like that if I know something reliable.”

This allows for the interpretation: reliable evidence that Ukrainian actors are behind the sabotage could question Germany’s position on aid to Ukraine. A sign of the explosive nature of the issue within the pro-Ukrainian alliance. Above all, because the question of who was the perpetrator could also influence the public perception of the parties to the conflict. If the population no longer supports the Ukraine aid in the long term, it will also become more difficult for politicians in Germany and the USA to continue to maintain it.

Now to another topic that is becoming extremely important at the moment: office buildings from the 1980s, located in the suburbs of Finland’s big cities. Wasn’t that high on your agenda before? That should change. Because these properties help to understand an impending crisis for all of Europe – with potentially worrying effects.

Because the fall in the price of just those office buildings in Finland meant that Blackstone, one of the largest private equity houses in the world, was no longer able to service a real estate loan. The loan is the basis of a EUR 531 million bond secured by commercial real estate. In this process, a lender converts a mortgage into securities that can be sold to investors.

If this story rings your financial market alarm bells, you’re right. Because it brings back memories of the 2008 financial crisis, which also had its origins in the US real estate market in the securitization business. It is worrying that the Finnish developments are not an isolated case. In Germany, too, prices for commercial real estate are currently falling significantly.

Even well-known objects are affected: the Commerzbank high-rise in Frankfurt has been looking for a new owner since last autumn in vain. The existing loan for the tallest skyscraper in the European Union is due this year.

An insane argument is currently stirring up the survey industry. On the one hand there is the established opinion research institute Forsa, headed by Manfred Güllner, and on the other hand the comparatively young company Civey, headed by Janina Mütze. This involves different “schools” of opinion polls, for example whether they should be carried out via landline or Internet.

But also about a personal dispute, in which Mütze often receives mail from Güllner’s lawyer. For example, when the young entrepreneur said about the Forsa boss in the Handelsblatt podcast that he was retired. The reply by a letter from a lawyer: If she claims that again, she will have to pay 10,000 euros. In the past four years, Civey counted a total of around 20 legal disputes with Forsa – almost all of which were initiated by the competitor. Company reporter Michael Scheppe has compiled the details of the dispute.

And then there is Twitter boss Elon Musk, who apparently has to take very special security precautions at the moment. According to BBC reports, after the self-proclaimed techno king has turned the staff upside down at the short message service, Musk only moves through the Twitter headquarters with personal security. The two bodyguards even accompany him to the toilet.

The story should reassure many bosses around the world. As long as they don’t have to worry about being attacked by their co-workers in the restroom, they can boast that the atmosphere at their company is still better than on Twitter.
I wish you a safe start to the day.
Best regards
Her

Teresa Stiens
Editor of the Handelsblatt