The Future of the World Economy – Morning Briefing Plus

Because of this uncertainty, companies are holding onto cash, trying to be more efficient, and stocking their warehouses. “In the past few months, the worst scenario we designed has always occurred,” said Astrid Hermann, CFO of Beiersdorf, who visited us in the editorial office after the conference.

US economist Kenneth Rogoff argued in the Handelsblatt that the world economy is experiencing “the perfect storm”. The President of the Munich Ifo Institute, Clemens Fuest, sees at least the supply chain disruptions as “a crisis that surpasses everything known to date”.

Not only companies have to adapt to these new times, but also economic policy. Politicians have become used to solving their problems with seemingly inexhaustible aid packages. With more and more billions in aid, they have fueled demand. This economic policy is now reaching its limits in times of rising interest rates.

It is quite possible that the German economy will soon find itself in a difficult phase similar to that at the beginning of this century: caught between inflation, war, energy shortages, industrial decarbonization, supply bottlenecks and a shortage of skilled workers. Germany therefore needs not only a security policy, but also an economic policy turning point that focuses on growth again.

What else kept us busy this week:

1. These are turbulent weeks in the markets. In the US and Europe, prices collapse. The S&P 500 is on the verge of a bear market. The Handelsblatt Markets team from Frankfurt analyzes what is behind it and what the prospects look like.

How are investors getting through this difficult time? What does a crisis-proof depot look like? This is not only a frequent topic at our conferences. The big analysis of the weekend by my colleagues Christian Rickens and Ulf Sommer also deals with these questions.

2. The FDP’s election results in North Rhine-Westphalia came as a shock to the party. “In this five-month traffic light coalition, the FDP simply does not deliver what its voters promised from it,” commented Handelsblatt political chief Thomas Sigmund. This shows the complicated situation in which FDP leader Christian Lindner is. Martin Greive and Jan Hildebrand describe how the Federal Minister of Finance is doing and what he does differently than his predecessors in a highly readable portrait.

3. Europe is fleeing to renewable energies, to become independent of Russian energy supplies. But with the big green turn, Europe is in danger of falling from one trap to the next: from being open to blackmail by authoritarian Russia to being dependent on authoritarian China, writes Moritz Koch, head of the Brussels Handelsblatt office.

4. For weeks, articles about geopolitical changes have been among the most read texts in the Handelsblatt. This week, I noticed the interview my colleague Teresa Stiens had with the security expert Claudia Major from the Stiftung Wissenschaft und Politik, who fears a “Verdun scenario” in Ukraine: “Militarily, I fear a war of attrition or position, in which both sides only make little substantial gains.”

5. Anyone interested in mobility and the future of the automotive industry he should still read this text by Martin Buchenau and Roman Tyborski: Because a drastic distribution battle has broken out in the car industry. The suppliers groan under rising costs and want to pass them on to the car manufacturers. But the walls. And the conflict has long since become a question of existence for some suppliers.

6. Ralph Dommermuth is surely one of the most notable entrepreneurs in the country. He stirred up the telecommunications industry like no other. Now his “last big entrepreneurial challenge” begins, as he said in the long interview with Philipp Alvares de Souza Soares and myself. It’s about the start of the hot phase for the construction of his new mobile network, in which he is investing billions. This fourth mobile network, he promises, will be the “most modern in Germany”. And of course the entrepreneur had a few swipes in the direction of Telekom.

7. If you are currently looking for a house or renovating a property (as I have been for a year and a half), then you are not to be envied: Not only are the material prices rising, some of them are simply not available. The situation is now so dramatic that experts are expecting the construction boom to come to an abrupt end – real estate developers are threatened with a situation that threatens their very existence.

8. One of my favorite columns in Handelsblatt is that of the Russian journalist Konstantin Goldenzweig. The 39-year-old reporter had to flee Moscow and has been working in Georgia ever since. He lost his homeland – but not his contacts, which reach deep into the Russian power apparatus. This is what makes his writing so worth reading. This week he wrote about the longing of many Russians for the Soviet empire.

9. I’ve been looking forward to this text by our reporter Christian Wermke for months – and he begins like this: “Complicated research in journalism often starts out simple. This one started earlier this year with a one-sentence assignment: ‘Create an NFT, try to sell it, and write about your experiences.’ When I thought of NFT, I immediately had to think of these digital collector’s cards that are auctioned off at absurdly high prices. But that’s all I knew. I was in the digital nowhere.” If you want to understand the biggest hype in the financial industry in years, then read on here. It takes about 15 minutes. But I promise you, you won’t regret it.

I wish you a relaxing weekend.

It greets you cordially
Yours Sebastian Matthes

Editor-in-Chief of the Handelsblatt

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