The search for the formula for the future: The editor-in-chief’s weekly review

Good morning dear readers,

The more we think about the future in the current crisis, the more we are really dealing with the past. Which brings us to the debate about German industry, whose future is negotiated in more or less top-class discussion rounds every week. It is these typical “always still” rounds in which sentences like: “German companies still earn very well”, medium-sized companies are “still strong” or China is “still the fastest for many sectors growing market”. This is the rhetoric of a relegation battle.

I had to think of all that when we published this week’s interview with economic historian Adam Tooze from Columbia University in New York, who accused Germany of “an industrial fetish”. Tooze doubts that screwing together cars and boiling steel “fits in with the German self-image of being at the forefront of global economic achievements”. However, many economic policy debates revolve around little more than that.

I’ve been wondering for a long time when Germany went from being a country of disruptors – where bright minds invented the telephone, nuclear fission and the car – to a country that only tweaks those innovations of the past while the big disruptions are taking place elsewhere.

Crises can be turning points, in which one can pause to develop a new image of the future, a formula for the future. But the opposite is happening right now. Too often we try to deal with the questions of the future with the answers from the past.

Instead of millions to the rescue from department store groups, millions should rather flow into even more AI research. Instead of wasting billions on fuel price controls, this money would be better invested in young companies working on breakthrough innovations in nuclear fusion or biotechnology. And if a fraction of the billion-euro rescue packages were then used to equip schools and universities with more modern equipment, then Germany’s prosperity would finally no longer depend on blast furnaces and ammonia production.

Without a new vision of the future but this country keeps chasing the past. Incidentally, in our cover story this week we are dealing with the exact question: How can the state help German industry without breeding a sluggish subsidy economy?

What else kept us busy this week:

1. At the weekend our eyes turn to Brussels: The EU wants to reform European emissions trading, which is probably the decisive instrument in the fight against climate change. However, the member states and the EU Parliament still have to agree on a few key points by Sunday. Here you can read what the current dispute is about. And of course our Brussels Handelsblatt office will keep you up to date on the most important news on the matter throughout the weekend.

2. The colleagues there are already under heavy pressure since Brussels has been shaken by a corruption scandal. Handelsblatt research now shows that the scandal is also causing massive unrest in Qatar: Foreign Minister Mohammed bin Abdulrahman al-Thani, for example, is “beside himself with rage”. It is apparently dawning on the Qataris that the matter will set their image campaign back by years.

3. It’s the science sensation of the year: For the first time in history, US scientists at the National Ignition Facility at Lawrence Livermore National Laboratory in California have successfully created a nuclear fusion reaction that produces more energy than is consumed. And that’s so spectacular because in a few years’ time nuclear fusion could be used to generate large quantities of green electricity in a climate-neutral and safe manner. In my podcast Handelsblatt Disrupt, I discuss with Moritz von der Linden, co-founder and CEO of the nuclear fusion start-up Marvel Fusion, how the breakthrough is already having an impact in the USA, what dimensions it has for the German market and why Europe is lacking in openness to technology.

4. 100 days The new VW boss Oliver Blume is in office – high time for a balance sheet: What the manager has done so far has been summarized by my colleagues from the car team. Their result: a surprising amount. And it starts with a different culture.

5. Britain was largely at a standstill this week. The country is experiencing the worst strikes since the 1970s. Many Britons are disillusioned with the conservative government’s broken Brexit promises and “worn out in the face of the adversities of everyday life,” writes London correspondent Torsten Riecke in a report well worth reading. But what is much worse, “the country is no longer at peace with itself”. And that is not likely to improve any time soon: according to the OECD, Great Britain has the lowest growth and the highest inflation of the G7 countries.

6. Taiwan has recently made headlines around the world, as TSMC, the country’s largest chipmaker, tripled its investment in the US to $40 billion. The island nation is now debating whether the country’s high-tech industry could relocate for fear of a Chinese attack. Asia correspondent Martin Kölling explores the question of how justified the Taiwanese’s existential fears are. In any case, no one can ignore the worries. Hardly any other country is so important for the international high-tech economy because it supplies the whole world with chips. And we remember what a mess across the economy the delivery bottlenecks alone caused in Corona times.

7. In Germany, meanwhile, a historic process came to an end: Hanno Berger, formerly a tax officer and then a star lawyer, was sentenced to eight years in prison for particularly serious tax evasion. Berger is at the center of the cum-ex scandal. Our investigative boss Sönke Iwersen has been writing about him for years and even visited Berger in his hiding place in Switzerland years ago. For the verdict, the Handelsblatt traces the life of the man who could never get enough. But Berger was not alone in this. A network of well-known banks and wealthy private investors, advised by the best lawyers, robbed the tax coffers for a good two decades. Now 120 procedures are running with 1,600 suspects. Incidentally, my colleagues also talk about this in the Handelsblatt Crime podcast.

8. A second spectacular case has occupied the international judiciary this week. The founder of the insolvent crypto exchange FTX, Sam Bankman-Fried, was unexpectedly arrested in his adopted home in the Bahamas on Monday evening. He was supposed to testify before the US House of Representatives via video conference on Tuesday. FTX, one of the largest crypto platforms in the world, had gone bankrupt and Bankman-Fried is suspected of embezzling billions of dollars. The 30-year-old was considered the savior of digital currencies. My colleagues Felix Holtermann and Astrid Dörner had interviewed him about the serious allegations just a few days ago.

9. Central banks have recently bought so much gold like not since 1967. The problem with this: With around 300 tons of the precious metal, it is unclear who is behind the purchases. The trail now leads to Russia.

Have a relaxing weekend.
sincerely
you
Sebastian Mathes
Editor-in-Chief of the Handelsblatt

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