The People of the Year: The Editor-in-Chief’s Weekly Review

Good morning dear readers,

on normal days, the Handelsblatt often focuses on facts and figures: GDP Eurozone in Q4, sales multiple in the financing round of the latest unicorn, survey data on the economic competence of the SPD. At the end of each year, however, we devote an entire issue to the people behind the numbers. People to look out for next year: business leaders, politicians, investors, founders and researchers.

People like Olaf Scholz and Robert Habeck, for example, who have to show in 2022 that they can translate their story of departure into concrete politics. Managers like Saori Dubourg, who organized the green restructuring of the world’s largest chemical company, BASF. Personio founder Hanno Renner, whose software, valued at billions, has become an indispensable part of German medium-sized businesses. And Veronika Grimm’s economy, which is hardly missing in any debate about the green restructuring of the economy.

Last night, when all the texts were finished, I had to think again about a few personal encounters from the year that was coming to an end. For example, there was Yuval Noah Harari, with whom I had a long conversation for my podcast at a conference in Sölden a few weeks ago. He said, “If the world invested two percent of global economic output in developing green technologies and green infrastructure, that could be enough to prevent catastrophic change in the climate”. Two percent of economic output, which is less than the German state transfers to the pension insurance as a tax subsidy every year. So the next sentence that Harari said stuck with me all the more: “What will happen in the next few years depends on our decisions.”

One person who has never wanted to bother with the course of history is Volkswagen boss Herbert Diess, whom I met for a long dinner at the beginning of the year. We talked about his vision for VW, about obstacles on the way there and about his feared opponent Tesla. Diess is certainly right about most of what he says, and he has also made a difference. But his brutal approach has frightened many. Good management only consists of ten percent of having the right knowledge. 90 percent of the time it means getting them implemented. It is not always helpful to constantly offend your own team.

The founder Katharina Jünger managed to implement her great idea – even against the law. When she set up her virtual doctor’s practice TeleClinic – today a real champion of the digital health scene – video consultation hours were still forbidden. She pushed for the change. But that was not so much the topic of our conversation a few weeks ago, but rather the question of why so few women in Germany are still willing to start up companies. “Establishing is a 100 percent thing,” said Jünger. Many women simply have no idea where to place their children when they are fully back in six months after giving birth. Her suggestion: Until the care facilities have been expanded, the deductibility of care should be improved. During this conversation it became clear to me that the lack of childcare in Germany is also a real obstacle to innovation.

And then there was our Düsseldorf electrician, who personally confronted me for the first time with problems in the global supply chain. I wanted to hire him for a small renovation, but he had to postpone the job over and over again. Until then, I only thought that chips were scarce. I learned from him in March of last year: “Power cables are the new toilet paper”.

1. In view of the increasing rise in inflation, the US Federal Reserve announced the expected turnaround in interest rates last week. Meanwhile, the ECB is still turning a blind eye to the risk of inflation and is leaving its key interest rate unchanged. Only the pandemic emergency program Pepp is running out. In return, however, the app purchase program will be expanded. The consequence is likely to be a devaluation of the euro and an increase in the price of imported goods from non-euro countries. This imported inflation will increase the price pressure in the euro zone, warns Handelsblatt chief economist Bert Rürup. It is high time the ECB arrived at the new monetary policy reality.

2. The questionable monetary policy course of the ECB moves many readers of the Handelsblatt, as the figures show: Last week no text read as long as the essay by my colleague Jens Münchrath on the monetary policy of the ECB. It shows how political failures have made the ECB the most important economic actor in Europe. A dangerous mistake, as he rightly points out. Münchrath calls for the ECB to change course away from a political substitute government and towards its original role.

3. The CDU is wrestling with its future. And this future now has a face from the past: 62.1 percent of the CDU members voted in favor of Friedrich Merz as the new party leader. “Triumphant chants are alien to me,” said Merz after his election. But the humility prevailed to be allowed to serve as the party’s tenth CDU party chairman. Whereby the humility remains to be seen.

4th Of course, the PR departments of the major German car manufacturers sell us their involvement in China as a huge opportunity. In reality, however, an increasingly dangerous dependency arises here. According to information from the Handelsblatt, BMW wants to relocate the production of the X5 and an electric version of the 3-series to China. Daimler, on the other hand, disclosed a few days ago that the Chinese state-owned company BAIC is now Daimler’s largest single shareholder.

5. The world is facing the next big Internet hype: the so-called Metaverse. People – equipped with virtual reality glasses – should meet in virtual rooms, attend concerts or hold meetings. Every hype also offers investors opportunities, as our investment team shows. Companies like Roblox, Snap and Nvidia want to make money with this new Web 3.0. However, it is also not yet clear whether a market worth billions will really arise in the Metaverse or a billions in the air.

6th Handelsblatt foreign director Nicole Bastian was in Athens a few days ago. There, together with Athens correspondent Gerd Höhler, she met the Greek Prime Minister Kyriakos Mitsotakis, who attacked the euro debt criteria: “We need a new framework that ensures financial sustainability,” he said in an interview with Handelsblatt. When asked whether a new southern alliance of highly indebted countries was emerging, he said: “If it is an alliance of reforms that drives Europe to use the possibilities of the future, then that would be a good alliance.” One thing is clear: the German culture of stability is coming under fire. And Olaf Scholz will have difficult conversations ahead of him when he travels to Italy next week. There, too, it will be about the EU debt rules.

7th It is a technology trend that has hardly been noticed until now: food start-ups, so-called foodtechs, attract investors from all over the world. The Berlin company Infarm was valued at more than one billion dollars for the first time last week. Infarm grows herbs in special cupboards in supermarkets – and is extremely successful with it. I expect a food tech boom in the next few years.

8th. The gold price lagged for a long time. But that could change, as our investment team reports: Many fund managers and asset managers want to increase the percentage of gold in their portfolios. The reason won’t surprise you: the fear of inflation.

9. The epic “House of Gucci” hit German cinemas two weeks ago. It shows a fashion dynasty that has long since lost its power. Italy correspondent Christian Wermke dared to take a look behind the scenes of the secretive company. In an impressive report, he describes how the luxury company from Florence is doing, in which the family has not been in charge for a long time.

I wish you a relaxing Advent weekend. We are also at your service around the clock between the years.

Sincerely,
Her

Sebastian Matthes
Editor-in-chief Handelsblatt

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