The deputy editor-in-chief’s weekly recap

The distance between the opponents is too small for that – and it is still too present how wrong Europe assessed the situation before Brexit and Trump’s election. Back in June and November 2016, we were there with a team of reporters in London and Washington when the mood turned – and the unthinkable became a certainty.

And yet no one in Berlin and Brussels likes to plan in case Le Pen wins. Cornelia Woll, professor of politics and President of the Hertie School, describes the mood aptly: “The whole of Europe is holding its breath ahead of the elections in France and is hoping to be able to breathe again on April 24.”

Surprises are always possible – also in France. Especially since Le Pen seemed better prepared in the TV duel this time than in 2017. She remained calm, Macron sometimes seemed almost annoyed and arrogant.

And so our Paris correspondent Gregor Waschinski deals with the question in a major analysis: What if Marine Le Pen is elected President on Sunday? What would her victory mean – for France, for Germany, for Europe, for the world economy? Because there is also a lot at stake economically when making the choice. A President Le Pen would stand for a policy of national isolation, her victory would be a nightmare scenario for investors.

Macron’s chances are good. But a favorite isn’t a winner until the votes are tallied. On handelsblatt.com you will find all information on the outcome of the election, reactions from Berlin, Brussels and the world as well as analyzes and classifications.

What else kept us busy this week:

1. Expectations were high when Olaf Scholz appeared before the press in the Chancellery on Tuesday evening. Many believed he would now (finally) announce major arms shipments to Ukraine, but he didn’t. One or the other in political Berlin, including in the SPD, wondered what this press conference was for and why the chancellor didn’t intensify his Russia policy.

The (international) pressure on the Social Democrats continued to grow noticeably, and Federal Defense Minister Christine Lambrecht (SPD) announced on Thursday that Germany would take part in a “ring swap” with EU and NATO partners. Slovenia is ready to deliver T-72 main battle tanks to Ukraine in exchange for weapons from Germany. Similar procedures could be followed with other states. It is doubtful whether that will be enough to silence calls for direct deliveries of heavy weapons to Ukraine.

Because Russia launched the feared large-scale attack in eastern Ukraine at the beginning of the week. The head of the Ukrainian Presidential Office wrote on the Telegram messenger service on Tuesday: “The second phase of the war has begun.” You can read all the news about the Ukraine war in our live blog.

2. Western sanctions are hitting people and the economy in Russia hard. According to a joint forecast that Moscow’s central bank asked Russian economists about, Russia is threatened with a 15 percent slump in its gross domestic product – worse than in the year after the collapse of the Soviet Union (in 1992, GDP fell by 14.2 percent). Russia is in reserve mode, even if Vladimir Putin tries to cover it up.

The four daughters of the Kremlin boss, on the other hand, lived a life of luxury for a long time, albeit in secret. For a long time, information about her was “top secret” – this was even true for the two legitimate children Maria Vorontsova and Katerina Tikhonova. But since the beginning of April, the two women have been on the US sanctions list – and are therefore involuntarily the focus.

3. With Henkel and SAP, two other DAX companies want to discontinue their business in Russia. They announced that this week. Our company reporters explain why this is easier said than done. Affected companies mainly report four problems when withdrawing from Russia.

Can German companies continue to do business in Russia? Is that morally justifiable? Or isn’t it perhaps also understandable not to throw one’s own engagement overboard in a hurry? These questions are also discussed (sometimes heatedly) in the Handelsblatt editorial team – a classic case of two opinions: for and against.

4. The International Monetary Fund presented its new forecast for the development of the world economy on Tuesday – and it turns out to be fatal. In almost all large countries, the IMF has had to correct its previous expectations significantly downwards. “The economic effects of war spread widely, like seismic waves emanating from the epicenter of an earthquake,” the IMF officials write in the forecast.

To make matters worse, IMF boss Kristalina Georgiewa has been sharply criticized for her realignment of the IMF. A number of employees and top economists see it as if the IMF only deals with issues that do not belong to the core competencies of Washington’s global financial regulator.

5. It’s an impressive graphic shared on social media this week: The ship jam in front of the world’s largest container port in Shanghai shows how China’s Covid policy is risking the collapse of global supply chains. My colleague Julian Olk has identified other charts that show what may be the greatest risk to the global economy.

6. This week BMW introduced the new 7 series. With the seventh generation of the luxury sedan, the Munich-based company wants to attack the S-Class from Mercedes-Benz – and hope for more lavish profit margins. BMW is doomed to be successful because the car manufacturer is being criticized by investors in an unusually sharp manner, despite record figures for sales, turnover and profits. Michael Muders, fund manager at Union Investment: “BMW is not a bad company, but the group has a credibility problem.” The management sometimes seems as if they think they are infallible. “There is no real error culture.”

But there is also a need for action at Volkswagen, or more precisely at Herbert Diess. At the beginning of the year, the VW CEO made the new software unit Cariad a top priority. But after around 100 days, the interim results are sobering: brand selfishness, unsustainable schedules and the departure of top managers and employees still characterize the picture – and burden the 63-year-old, who is under surveillance anyway.

7. Shock at Netflix: The streaming service, spoiled for success, had to report a decline in the number of subscribers for the first time in a decade. The stock fell more than 25 percent in after-hours trading. The reasons given by Netflix founder Reed Hastings are around 100 million customers who use Netflix but do not pay for it, as well as the strong competition from other streaming providers.

8. Warren Buffett, on the other hand, is back in his element. After little was heard from the star investor for a while, he has now closed three large deals within six weeks. His investment holding company Berkshire Hathaway, with its large energy and industrial division, is positioned to benefit from rising interest rates. The shareholders, whom the 91-year-old welcomed personally to the shareholders’ meeting in Omaha, Nebraska, for the first time since the pandemic at the end of April, are delighted.

9. How the war in Ukraine shakes the worldview of post-reunification children, my colleague Teresa Stiens describes this impressively in her essay “The day that robbed me of my illusions”. One sentence made me think in particular: “For me and my generation, this war of aggression ended a life characterized by confidence bordering on naivety. So far I can’t say for sure what to replace that worldview with.”

I wish you a nice weekend – and Europe a sigh of relief on Sunday evening!

sincerely
your

Kirsten Ludowig

Deputy Editor-in-Chief Handelsblatt

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