Mathias Döpfner is chair and CEO of Axel Springer, POLITICO’s parent company. America and Europe have been transmitting on different wavelengths for some time now. And that is dangerous — especially for Europe. The European reactions to the new U.S. National Security Strategy paper and to Donald Trump’s recent criticism of the Old Continent were, once again, reflexively offended and incapable of accepting criticism: How dare he, what an improper intrusion! But such reactions do not help; they do harm. Two points are lost in these sour responses. First: Most Americans criticize Europe because the continent matters to them. Many of those challenging Europe — even JD Vance or Trump, even Elon Musk or Sam Altman — emphasize this repeatedly. The new U.S. National Security Strategy, scandalized above all by those who have not read it, states explicitly: “Our goal should be to help Europe correct its current trajectory. We will need a strong Europe to help us successfully compete, and to work in concert with us to prevent any adversary from dominating Europe.” And Trump says repeatedly, literally or in essence, in his interview with POLITICO: “I want to see a strong Europe.” The transatlantic drift is also a rupture of political language. Trump very often simply says what he thinks — sharply contrasting with many European politicians who are increasingly afraid to say what they believe is right. People sense the castration of thought through a language of evasions. And they turn away. Or toward the rabble-rousers. My impression is that our difficult American friends genuinely want exactly what they say they want: a strong Europe, a reliable and effective partner. But we do not hear it — or refuse to hear it. We hear only the criticism and dismiss it. Criticism is almost always a sign of involvement, of passion. We should worry far more if no criticism arrived. That would signal indifference — and therefore irrelevance. (By the way: Whether we like the critics is of secondary importance.) Responding with hauteur is simply not in our interest. It would be wiser — as Kaja Kallas rightly emphasized — to conduct a dialogue that includes self-criticism, a conversation about strengths, weaknesses and shared interests, and to back words with action on both sides. Which brings us to the second point: Unfortunately, much of the criticism is accurate. Anyone who sees politics as more than a self-absorbed administration of the status quo must concede that for decades Europe has delivered far too little — or nothing at all. Not in terms of above-average growth and prosperity, nor in terms of affordable energy. Europe does not deliver on deregulation or debureaucratization; it does not deliver on digitalization or innovation driven by artificial intelligence. And above all: Europe does not deliver on a responsible and successful migration policy. The world that wishes Europe well looked to the new German government with great hope. Capital flows on the scale of trillions waited for the first positive signals to invest in Germany and Europe. For it seemed almost certain that the world’s third-largest economy would, under a sensible, business-minded and transatlantic chancellor, finally steer a faltering Europe back onto the right path. The disappointment was all the more painful. Aside from the interior minister, the digital minister and the economics minister, the new government delivers in most areas the opposite of what had been promised before the election. The chancellor likes to blame the vice chancellor. The vice chancellor blames his own party. And all together they prefer to blame the Americans and their president. Instead of a European fresh start, we see continued agony and decline. Germany still suffers from its National Socialist trauma and believes that if it remains pleasantly average and certainly not excellent, everyone will love it. France is now paying the price for its colonial legacy in Africa and finds itself — all the way up to a president driven by political opportunism — in the chokehold of Islamist and antisemitic networks. In Britain, the prime minister is pursuing a similar course of cultural and economic submission. And Spain is governed by socialist fantasists who seem to take real pleasure in self-enfeeblement and whose “genocide in Gaza” rhetoric mainly mobilizes bored, well-heeled daughters of the upper middle class. Hope comes from Finland and Denmark, from the Baltic states and Poland, and — surprisingly — from Italy. There, the anti-democratic threats from Russia, China and Iran are assessed more realistically. Above all, there is a healthy drive to be better and more successful than others. From a far weaker starting point, there is an ambition for excellence. What Europe needs is less wounded pride and more patriotism defined by achievement. Unity and decisive action in defending Ukraine would be an obvious example — not merely talking about European sovereignty but demonstrating it, even in friendly dissent with the Americans. (And who knows, that might ultimately prompt a surprising shift in Washington’s Russia policy.) That, coupled with economic growth through real and far-reaching reforms, would be a start. After which Europe must tackle the most important task: a fundamental reversal of a migration policy rooted in cultural self-hatred that tolerates far too many newcomers who want a different society, who hold different values, and who do not respect our legal order. If all of this fails, American criticism will be vindicated by history. The excuses for why a European renewal is supposedly impossible or unnecessary are merely signs of weak leadership. The converse is also true: where there is political will, there is a way. And this way begins in Europe — with the spirit of renewal of a well-understood “Europe First” (what else?) — and leads to America. Europe needs America. America needs Europe. And perhaps both needed the deep crisis in the transatlantic relationship to recognize this with full clarity. As surprising as it may sound, at this very moment there is a real opportunity for a renaissance of a transatlantic community of shared interests. Precisely because the situation is so deadlocked. And precisely because pressure is rising on both sides of the Atlantic to do things differently. A trade war between Europe and America strengthens our shared adversaries. The opposite would be sensible: a New Deal between the EU and the U.S. Tariff-free trade as a stimulus for growth in the world’s largest and third-largest economies — and as the foundation for a shared policy of interests and, inevitably, a joint security policy of the free world. This is the historic opportunity that Friedrich Merz could now negotiate with Donald Trump. As Churchill said: “Never waste a good crisis!”

At New York Climate Week in September, opinion leaders voiced concern that high-profile events often gloss over the deep inequalities exposed by climate change, especially how poorer populations suffer disproportionately and struggle to access mitigation or adaptation resources. The message was clear: climate policies should better reflect social justice concerns, ensuring they are inclusive and do not unintentionally favor those already privileged.  We believe access to food sits at the heart of this call for inclusion, because everything starts with food: it is a fundamental human right and a foundation for health, education and opportunity. It is also a lever for climate, economic and social resilience.  > We believe access to food sits at the heart of this call for inclusion, > because everything starts with food This makes the global conversation around food systems transformation more urgent than ever. Food systems are under unprecedented strain. Without urgent, coordinated action, billions of people face heightened risks of malnutrition, displacement and social unrest.   Delivering systemic transformation requires coordinated cross-sector action, not fragmented solutions. Food systems are deeply interconnected, and isolated interventions cannot solve systemic problems. The Food and Agriculture Organization’s recent Transforming Food and Agriculture Through a Systems Approach report calls for systems thinking and collaboration across the value chain to address overlapping food, health and environmental challenges.   Now, with COP30 on the horizon, unified and equitable solutions are needed to benefit entire value chains and communities. This is where a systems approach becomes essential.  A systems approach to transforming food and agriculture  Food systems transformation must serve both people and planet. We must ensure everyone has access to safe, nutritious food while protecting human rights and supporting a just transition.   At Tetra Pak, we support food and beverage companies throughout the journey of food production, from processing raw ingredients like milk and fruit to packaging and distribution. This end-to-end perspective gives us a unique view into the interconnected challenges within the food system, and how an integrated approach can help manufacturers reduce food loss and waste, improve energy and water efficiency, and deliver food where it is needed most.   Meaningful reductions to emissions require expanding the use of renewable and carbon-free energy sources. As outlined in our Food Systems 2040 whitepaper,1 the integration of low-carbon fuels like biofuels and green hydrogen, alongside electrification supported by advanced energy storage technologies, will be critical to driving the transition in factories, farms and food production and processing facilities.   Digitalization also plays a key role. Through advanced automation and data-driven insights, solutions like Tetra Pak® PlantMaster enable food and beverage companies to run fully automated plants with a single point of control for their production, helping them improve operational efficiency, minimize production downtime and reduce their environmental footprint.  The “hidden middle”: A critical gap in food systems policy  Today, much of the focus on transforming food systems is placed on farming and on promoting healthy diets. Both are important, but they risk overlooking the many and varied processes that get food from the farmer to the end consumer. In 2015 Dr Thomas Reardon coined the term the “hidden middle” to describe this midstream segment of global agricultural value chains.2   This hidden middle includes processing, logistics, storage, packaging and handling, and it is pivotal. It accounts for approximately 22 percent of food-based emissions and between 40-60 percent of the total costs and value added in food systems.3 Yet despite its huge economic value, it receives only 2.5 to 4 percent of climate finance.4  Policymakers need to recognize the full journey from farm to fork as a lynchpin priority. Strategic enablers such as packaging that protects perishable food and extends shelf life, along with climate-resilient processing technologies, can maximize yield and minimize loss and waste across the value chain. In addition, they demonstrate how sustainability and competitiveness can go hand in hand.  Alongside this, climate and development finance must be redirected to increase investment in the hidden middle, with a particular focus on small and medium-sized enterprises, which make up most of the sector.   Collaboration in action  Investment is just the start. Change depends on collaboration between stakeholders across the value chain: farmers, food manufacturers, brands, retailers, governments, financiers and civil society.  In practice, a systems approach means joining up actors and incentives at every stage.5 The dairy sector provides a perfect example of the possibilities of connecting. We work with our customers and with development partners to establish dairy hubs in countries around the world. These hubs connect smallholder farmers with local processors, providing chilling infrastructure, veterinary support, training and reliable routes to market.6 This helps drive higher milk quality, more stable incomes and safer nutrition for local communities.  Our strategic partnership with UNIDO* is a powerful example of this collaboration in action. Together, we are scaling Dairy Hub projects in Kenya, building on the success of earlier initiatives with our customer Githunguri Dairy. UNIDO plays a key role in securing donor funding and aligning public-private efforts to expand local dairy production and improve livelihoods. This model demonstrates how collaborations can unlock changes in food systems.  COP30 and beyond  Strategic investment can strengthen local supply chains, extend social protections and open economic opportunity, particularly in vulnerable regions. Lasting progress will require a systems approach, with policymakers helping to mitigate transition costs and backing sustainable business models that build resilience across global food systems for generations to come.   As COP30 approaches, we urge policymakers to consider food systems as part of all decision-making, to prevent unintended trade-offs between climate and nutrition goals. We also recommend that COP30 negotiators ensure the Global Goal on Adaptation include priorities indicators that enable countries to collect, monitor and report data on the adoption of climate-resilient technologies and practices by food processors. This would reinforce the importance of the hidden middle and help unlock targeted adaptation finance across the food value chain.  When every actor plays their part, from policymakers to producers, and from farmers to financiers, the whole system moves forward. Only then can food systems be truly equitable, resilient and sustainable, protecting what matters most: food, people and the planet.  * UNIDO (United Nations Industrial Development Organization)  Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Tetra Pak * The ultimate controlling entity is Brands2Life Ltd * The advertisement is linked to policy advocacy regarding food systems and climate policy More information here. https://www.politico.eu/7449678-2

Small and medium-sized enterprises (SMEs) in Germany do not complain. They work. They adapt to external circumstances and are successful with their products against all odds. Many of them worldwide. This is the secret of their success. But the current economic situation gives cause for concern. We launched our DATEV SME Index a year ago. Our index provides up-to-date, fact-based and broad insights into German SMEs in a way that has not been available before: it is based on the advance VAT returns of more than one million SMEs and the payroll accounts of more than eight million employees. As an IT service provider for the tax consulting profession, this effectively lets us look directly into the engine room of German SMEs. But this detailed view is not very pleasant at the moment. The figures we publish each month based on data from tax advisors paint an almost worrying picture. The increase in the minimum wage that has already been decided is likely to exacerbate this situation for small and micro-enterprises. Sales are falling, wages are rising The German economy is in a difficult situation. Since September 2024, we have observed declining sales in SMEs. Concurrently, wages are increasing. Our latest statistics show that this trend is continuing — in all German federal states, industries and company sizes. There is currently no indication of a change in this trend. As previously described, SMEs rarely voice dissatisfaction. Instead, they seek pragmatic solutions. This challenging situation is no different. There are in fact a number of ways to resolve this issue. Many SMEs are looking to the federal government with high expectations. They expect it to pursue business-friendly policies to strengthen the backbone of the German economy. Small and medium-sized companies represent 99 percent of it and employ around half of the workforce in Germany. Without relief and incentives, the existence of many SMEs is increasingly at risk. Above all, we need to reduce bureaucracy and implement a bureaucracy moratorium: meaning the standardization and reduction of documentation and retention requirements. > Above all, we need to reduce bureaucracy and implement a bureaucracy > moratorium: meaning the standardization and reduction of documentation and > retention requirements. Financial incentives for greater productivity The regulatory frenzy of recent decades in Germany and in the EU makes it difficult for companies to catch their breath. It not only costs SMEs time and money, but it also hinders innovation. But there are now initial indications that something is being done about this. The importance and necessity to modernize the administration has been recognized and will be supported financially. A separate ministry for digital transformation and state modernization is a positive first step. > The German government has also already decided on the so-called investment > booster. However, this will only help to a limited extent The German government has also already decided on the so-called investment booster. However, this will only help to a limited extent. The investment booster allows for declining balance depreciation of up to 30 percent, which enables companies to write off higher amounts, especially in the first few years. This is intended to accelerate investment and secure liquidity for businesses. However, this only helps if there is still enough substance or capital available for further financing. And in many cases, this is no longer the case for SMEs. In order to boost productivity, financial incentives must be provided as quickly as possible. It is our hope that there will be extensive investments in infrastructure and the digitalization of administration as well. Artificial intelligence creates greater efficiency Another encouraging sign: new technological advancements facilitate operations for business. Artificial intelligence (AI) is more than just a buzzword. As Germany’s second largest software company, we are dedicated to developing innovative products and solutions for tax firms, so that they can provide even more exceptional counsel to their clients — mostly small and medium-sized businesses. For me, it is evident that AI will positively transform work in tax consulting firms, creating significant opportunities. AI helps to simplify monotonous, repetitive tasks, allowing for more efficient workflow. It is a valuable tool for supporting individuals rather than replacing them. This is especially important in a time of pressing issues such as skilled worker shortages. The use of AI thus also offers new opportunities for all companies that wish to prioritize their core business over bureaucracy. Digital and AI-supported processes with tax advisors will provide sustainable support in this. The acceptance and use of AI tools is steadily increasing in tax consulting firms. Among the most widely used industry-specific offerings, the DATEV appeal generator and specialist research tools are highly regarded. It is clear that we have only just begun to see the full extent of the situation. We are working every day on new solutions that make it easier for tax consulting firms to better advise their client companies to improve their successes. We also use our detailed knowledge that we generate from our DATEV SME Index. > The smart use of AI can also enhance the success of German SMEs and strengthen > their ability to compete globally — despite existing regulatory challenges, > bureaucratic hurdles and complicated tax systems. Ultimately, it depends on how we deal with the challenges in our daily work. How we successfully shape the path to the digital future with the possibilities offered by AI. We have learned from major American software providers over the past 20 years that those who best understand the data business enjoy great economic success. Now comes the second chance. The smart use of AI can also enhance the success of German SMEs and strengthen their ability to compete globally — despite existing regulatory challenges, bureaucratic hurdles and complicated tax systems. So, enough whining. Let’s proceed! Robert Mayr, tax advisor, auditor and doctor of business administration, is CEO of DATEV eG since 2016. From 2014 to 2016, he was on the board of the Nuremberg-based data processing cooperative, responsible for finance and purchasing, and had already been responsible for internal data processing and production since 2011. After studying business administration at Ludwig Maximilian University in Munich, he began his professional career as a consultant at Treuhandanstalt Berlin. Mayr worked for Deloitte from 1994 to 2001, after which he spent nine years as managing partner of Solidaris Revisions-GmbH in Munich. Since 2012, Mayr has been vice president of the Nuremberg Chamber of Tax Consultants. DATEV eG is a data processing cooperative with more than 850,000 customers. Founded in 1966, it now employs a staff of about 9,000, working at its headquarters in Nuremberg and 22 branch offices throughout Germany. Its legal structure as a cooperative guarantees continuity, meaning no investor can buy DATEV. For more information on the DATEV Small and Medium-Sized Enterprises Index, please visit mittelstandsindex.datev.de (in German).

Listen on * Spotify * Apple Music * Amazon Music Vom CEO-Posten ins Kabinett: Deutschlands erster Digitalminister Karsten Wildberger im Interview mit Gordon Repinski. Er verspricht die digitale Brieftasche für alle Bürger – und nennt einen konkreten Zeitplan, wann der Personalausweis aufs Handy kommt. Außerdem erklärt Wildberger seinen 4-Punkte-Plan zur Entbürokratisierung des Staates, warum er mehr Begeisterung für Künstliche Intelligenz in Deutschland fordert und und der Minister spricht über politische Botschaften, seinen Umgang mit dem Beamtenapparat und weshalb er Altersgrenzen für Social Media unterstützt. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren. Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: @gordon.repinski | X: @GordonRepinski.

BRUSSELS — The EU’s executive told member countries they can repurpose hundreds of billions of euros in Covid-19 relief money to fund defense projects, reflecting a radical shift in priorities since the days of the pandemic. On Wednesday, the European Commission confirmed countries have until August 2026 to meet agreed targets in order to receive up to €335 billion of Resilience and Recovery Facility (RRF) funding — but said defense-related projects would now be eligible for funding. Back in 2021, the European Commission offered EU countries hit by the Covid pandemic a cash pot of €650 billion in loans and grants for projects combating climate change, improving digitalization, and other growth-friendly reforms funded by EU-level debt issuance. It was the height of the Green Deal, before Russia’s full-scale invasion of Ukraine when climate was Brussels’ top priority. Under the RRF legislation, 37 percent of funds should go to combating climate change and 20 percent to digitalize the economy, while defense was not mentioned in the list of possible funding areas. But four years on, with around half of the RRF money yet to be disbursed, the Commission on Wednesday told countries defense projects under common EU plans such as the satellite communication programs were now eligible. It also called for lawmakers and governments to include in the European Defense Industry Programme (EDIP) regulation a provision to make it possible for countries to use Recovery money to make contributions to the defense fund. “These alternatives could help the Recovery Facility to deliver additional important benefits from common European priorities, including in the areas of security and defense,” Economy Commissioner Valdis Dombrovskis told reporters, listing a large number of ways in which countries can redesign their plans. The idea is that if a country diverts RRF-backed money to contribute to these common programs, it can easily secure it. When asked about how defense investments can meet the RRF’s green and digital goals, Dombrovskis said that the current rules do not provide any specific treatment for defense related measures. He said that the Spanish plan already included measures on cybersecurity for instance, and other countries have made investment in crisis readiness. TIME IS RUNNING OUT But for countries wishing to redirect funds, time is getting tight. Governments must prove they have achieved agreed targets in order to receive the funds — and several are late. For months, countries such as Italy and Spain, the top beneficiaries of the funds, have lobbied to postpone the 2026 deadline. The EU executive is firmly rejecting the idea. That would imply extending the possibility for the Commission to borrow money on the markets and would require a deal among governments and ratification by 20 parliaments — with the risk of a complete stall, an EU official said. “So this is not only not a good idea, it is also extremely costly and very dangerous,” the official said. The Commission suggests countries make sure that the planned investments are feasible or else “replace them with things that are feasible,” the official said. The  EU lists many options for countries to secure the funds in a communication published on Wednesday, including using funds to inject capital into national promotional banks or transfer them to the EU program for investments, InvestEU. Countries can also resize their ambitions — for instance, if a government is not able to finish the building of a hospital, it can at least complete a part of it and use other EU funds to finish the job— and scale up projects already completed. Romania, Hungary, and Bulgaria are the countries with both larger plans and more delays. Romania has asked for grants equivalent to 3 percent of GDP. Hungary has not yet presented a single request for payment: in its case the money delivery depends on crucial rule-of-law reforms granting more anti-corruption safeguards and courts’ independence. Budapest could lose €10.4 billion.

LONDON — The British government believes its least senior civil servants spend almost two-thirds of their time on routine tasks that could be automated, documents obtained by POLITICO show. Ministers have claimed that public sector digitalization could yield £45 billion in annual productivity savings. That rests on an assumption that 62 percent of the tasks done by the most junior grades of the civil service — administrative assistants — are routine and thus automatable. The methodology was put together by the Department for Science, Innovation and Technology (DSIT) and obtained through Freedom of Information requests by POLITICO. It estimates that civil service executive officers, senior executive officers, and higher executive officers spend 48 percent, 43 percent, and 23 percent of their time on routine tasks respectively, while the most senior civil servants dedicate exactly none (zero percent) of their time to routine tasks.  Chancellor Rachel Reeves has said the government plans to cut civil service running costs by 15 percent by the end of this parliament, with 10,000 job cuts factored into that plan. Reeves told the BBC that this cost-cutting was “more than possible” thanks to advances in technology and artificial intelligence. The modelling doesn’t forecast exactly where job losses might fall. It’s difficult to independently tease out what automation potential might mean for workforce reductions since civil service headcounts group some of these grades together, and averaging out percentages supposes an equal breakdown of roles.  Giles Wilkes, a senior fellow at the Institute for Government think tank, said that even if AI takes over some civil service work, it might create new work, too.  “You can’t just take a static analysis, take a whole bunch of tasks, work out how much they can be automated, and let your workings end at that point,” he said. “There’s often some kind of rebound effect, some kind of creation of new demand, that will often create further problems, further layers of management.” “We’ve seen waves and waves of technological change over the years and we haven’t seen administrative budgets fall,” Wilkes added. POLITICO was refused DSIT’s full model used to calculate the £45 billion estimate on the basis that it is “highly complex and forms part of a multi-stage pipeline hosted in AWS [Amazon Web Services],” the provision of which would exceed “cost and resource limits” under the Freedom of Information Act.  DSIT said it is “currently working towards making a more accessible version of the methodology available to support transparency and understanding of the approach used” and plans to open source the model’s code in the future.  Some MPs have argued that the Department of Science, Innovation and Technology — which made a commitment to transparency one point in its six-point blueprint for public sector reform — should have been more open about the methodology from the beginning, before ministers started quoting the £45 billion figure in public.  Only after Select Committee Chair Chi Onwurah wrote to Secretary of State Peter Kyle in April requesting a full breakdown of the modelling did DSIT release a “methodology note” revealing there was no specific timeframe for realizing the touted savings, alongside other caveats including an acknowledgement that it hadn’t assessed whether existing AI could actually automate routine tasks. “DSIT is doing some excellent work to improve government through the use of tech, so it’s a shame ministers are resorting to savings numberwang,” Connected by Data’s Gavin Freeguard, who led the Institute for Government’s flagship Whitehall Monitor, said. “It’s even more disappointing that it’s taken select committee enquiries and FOI requests to get any information about the methodology behind the number,” he added.  Onwurah said the FOI findings underlined her concerns about “questionable assumptions and extrapolations” behind the methodology, and said the committee will “keep pressing ministers to be more transparent” as part of its inquiry into the digital centre of government. 

John Kampfner is a British author, broadcaster and commentator. His latest book “In Search of Berlin” is published by Atlantic. He is a regular POLITICO columnist. Germany is good at doing things slowly. Six months ago, the country’s last government collapsed, as small-time politicians with big egos could no longer abide each other. Since then, we saw Germany hold a general election, U.S. President Donald Trump come to power and the world plunged into mayhem. In Berlin, however, things have carried on pretty much as normal. The outgoing cabinet continued to run the place in its usual fashion, competently but with little sense of purpose. The economy stuttered on. And political parties did what political parties do — connive against each other. But finally, a new administration is set to launch today. So, will things now change? According to Friedrich Merz, the Federal Republic’s 10th chancellor, his first 100 days in office will be like no other. Germany, he said, will be turbocharged into activity. And from within the ranks of his Christian Democratic Union party (CDU), which was not necessarily brimming with talent, he has been able to produce some surprising yet sensible ministerial choices. His minister for economic affairs, former energy chief executive Katherina Reiche, isn’t even in parliament, but she might know a thing or two about getting things to work. His Minister for Foreign Affairs Johann Wadephul has been strong on Ukraine and seems a popular choice around the world. Plus, the Ministry of Defense is staying with Boris Pistorius who, during the fractious years of outgoing Chancellor Olaf Scholz, was among the few to understand Germany’s need for proper armed forces. Interestingly, Merz’s entire worldview — and pitch to voters — turned on its head in the middle of his election campaign. While he was all about austerity at the start, Merz is now determined to spend his way out of Germany’s malaise. And while he gave the initial impression he might emulate some of Trump’s flourishes, that these two conservative private-sector “bros” would get on just fine, now he’s all about preserving liberal democracy from authoritarians. The remarkable turnaround was the result of U.S. Vice President JD Vance’s infamous speech at the Munich Security Conference — the first time Europe clocked that not only was the U.S. no longer its protector, but it might even be an adversary. However, Merz’s critics — and in his long and turbulent political life, there have been many — say his U-turns were deliberate deceit, and that he had no intention of sticking to the old spending rules in the first place. For instance, the Greens, who opposed the “debt brake” rule that heavily restricted borrowing, have every right to feel double-crossed, as they’re no longer in government. On the other hand, the CDU’s coalition partners, the Social Democrats (SPD), are acting as if they won the February election, even though they suffered their most ignominious result in over a century. The coalition negotiations took less than two months, which in German terms is supersonic. During that time, in his desire to ensure harmony, Merz gave the party much of what it wanted: Seven cabinet posts is considerably more than the SPD was due, and the commitment to continued high welfare suggests structural reform will be minimal. But much will depend on Merz’s relationship with “new-kid-on-the-block” Lars Klingbeil. The SPD co-leader is the new vice chancellor and minister of finance, and both he and Merz have taken note from their predecessors: Scholz’s government collapsed because the man in charge of the finance ministry, Christian Lindner, acted as an in-house opposition. They will seek to avoid that fate. Much will depend on Merz’s relationship with “new-kid-on-the-block” Lars Klingbeil. | Clemens Bilan/EFE via EPA Meanwhile, one area where Merz will undoubtedly shine is abroad. This won’t be too hard, seeing as the charisma-free Scholz somehow managed to antagonize many of his interlocutors — even those he should have been close to, like French President Emmanuel Macron and Ukrainian President Volodymyr Zelenskyy. With visits to Paris, Warsaw and Brussels scheduled in quick succession, followed by one to London, Merz has pledged to restore Germany’s role as a major player on the European and world stage. It will be instructive to see how Merz’s somewhat acerbic nature copes with the many crises Germany and the Western world will face. For example, just how candid will he be with Trump when dealing with Ukraine and Russia? He’s already said he’ll reverse the Scholz government’s approach and dispatch Taurus cruise missiles to help Ukraine, which is bound to cause friction. But the key question is how this government will spend its windfall — an extra-budgetary vehicle of €500 billion to overhaul moribund infrastructure and spend on the military, all to be paid somewhere down the line. This extra cash will likely enable Germany to bounce out of recession, but as one diplomat put it to me: “Growth today, modernization tomorrow.” Even though the country’s struggling carmakers may swiftly reconfigure some plants to build military hardware — which is desperately needed — overall, Germany’s still struggling to embrace digital technology. A new ministry has been created with this exact function, but how much it can break through old bureaucratic practices will be the litmus test. After all, this isn’t the first government that’s vowed to drag Germany into the 21st century. Then, there’s the far right to contend with. Merz avowedly insists he’s not a populist, yet we can see the Alternative for Germany (AfD) party’s influence everywhere. The new configuration of the lower house parliament, the Bundestag, has an alarmingly large bank of seats for the party, and latest opinion polls put it neck-and-neck with the CDU. Unsurprisingly, this is alarming many — but it’s still extremely early in the political cycle. Early measures on immigration, starting with enhanced border controls, will be designed to show the government is tough. The SPD will go along with them too, mindful that the AfD has already decimated its vote. This is the start of a new era that just might put a spring in Germany’s step — though that isn’t the sentiment among the “Berlin bubble,” where politicians, journalists and think tanks seem determined to write this government off before it’s even begun. Instead, much talk is of democracy’s “last chance” before the next general elections in 2029, where the AfD could emerge as the largest party. But pessimism and self-denigration are the German national sport. And though the Trump experience has taught us to never say never, Merz will be determined to prove his compatriots wrong.

BERLIN — Germany’s incoming Chancellor Friedrich Merz on Monday released his first batch of Cabinet picks, highlighting clear themes: experience, party loyalty and business-minded leadership. At the Foreign Ministry, Johann Wadephul, a seasoned defense and foreign policy expert, is set to lead Germany’s diplomatic efforts at a time of rising global tensions. In a major economic move, Katherina Reiche — a former energy executive and ex-lawmaker — will head the Ministry for Economy and Energy, overseeing Germany’s reindustrialization plans. Patrick Schnieder, a veteran transport policymaker, takes over the Ministry of Transport, while Karin Prien, who previously led education policy in the northern state of Schleswig-Holstein, will run the Ministry for Education. Nina Warken, a Bundestag legal specialist, is tapped to lead the Health Ministry. Merz has also created a new Ministry for Digitalization, choosing physicist and tech executive Karsten Wildberger to push overdue digital reforms in government. Cultural and media affairs will be steered by Wolfram Weimer, a well-known journalist and publisher. Christiane Schenderlein, a Bundestag member with experience in cultural policy, becomes state minister for sport and volunteer engagement. On European affairs, Merz appointed strong voices from his conservative Christian Democratic Union: Serap Güler joins the Foreign Ministry as state minister for international cooperation, while Gunther Krichbaum, a veteran on EU policy, takes the role of state minister for European affairs. Finally, Thorsten Frei — a key Merz ally and former CDU/CSU parliamentary manager — will become head of the Chancellery, a powerful role akin to a chief of staff. Frei will be responsible for coordinating government operations and ensuring Cabinet discipline, a critical post as Merz seeks to push through his ambitious domestic and security agenda

Listen on * Spotify * Apple Music * Amazon Music Volker Wissing, geschäftsführender Bundesminister für Digitales und Verkehr und für Justiz, spricht über die Stunden des Koalitionsbruchs am 6. November, seine Entscheidung, im Amt zu bleiben – und über die Frage, warum die FDP aus seiner Sicht an sich selbst gescheitert ist.  Es geht um persönliche Verantwortung, Kompromissfähigkeit, das Versagen demokratischer Zusammenarbeit – und den Preis dafür: das Erstarken der AfD. Ein politischer Spaziergang, der Einblicke in das Ende der Ampelregierung gibt – und in den Menschen hinter dem Ministeramt. Das Berlin Playbook als Podcast gibt es morgens um 5 Uhr. Gordon Repinski und das POLITICO-Team bringen euch jeden Morgen auf den neuesten Stand in Sachen Politik — kompakt, europäisch, hintergründig. Und für alle Hauptstadt-Profis: Unser Berlin Playbook-Newsletter liefert jeden Morgen die wichtigsten Themen und Einordnungen. Hier gibt es alle Informationen und das kostenlose Playbook-Abo. Mehr von Berlin Playbook-Host und Executive Editor von POLITICO in Deutschland, Gordon Repinski, gibt es auch hier:   Instagram: @gordon.repinski | X: @GordonRepinski.

“This idea of putting people first has always been the core of Europe’s social market economy. We want strong social partners. The market can only work well, if the social dialogue thrives too. We need to make sure that we strengthen social rights in Europe.” This quote, from President Ursula von der Leyen’s November 2024 address to the European Parliament, where she presented the new College of Commissioners and its program, both reaffirms Europe’s values as a social market economy and puts social dialogue at the heart of future competitiveness. Improving the lives of people in Europe, strengthening social dialogue, and embracing the principle that economic competitiveness and social progress are complementary objectives are the very essence of Eurofound as an organization. This has been the case for the past five decades, with this year marking the 50th anniversary since its establishment. Based in Loughlinstown in Dublin since 1975, Eurofound works to improve social and employment policies, which ultimately improve the lives of people across Europe. Our policy contribution is focused on collecting and communicating reliable data and providing research to enable stakeholders to take informed decisions that help to build a Europe that works for people. > Eurofound works to improve social and employment policies, which ultimately > improve the lives of people across Europe. Eurofound’s journey has, somewhat paradoxically, been one of both consistency and change. We keep our focus on the living and working conditions of EU citizens, but the situation of those citizens has changed profoundly over the last 50 years. The EU ended the post-war division of the continent, growing to eventually include the current 27 member states. It helped build a strong economy and achieved exemplary living standards. It also went through economic crises, high unemployment, pandemics, technological breakthroughs and challenging external competition. In both successful and challenging times, Eurofound’s work has been an important knowledge source for governments, the social partners and EU institutions when shaping their policies. The agency is now entering a new era, where preserving peace and increasing the competitiveness and strategic autonomy of the EU, as well as facing the challenges of demographic aging, digitalization, climate change, and preserving a democratic and inclusive society are at the forefront of political priorities. Eurofound will enter its next decade serving the interests of its stakeholders, providing them with unique, timely and reliable knowledge and focusing on the challenges from the standpoints of the social partners, citizens and governments. Early foundations Eurofound was established in the context of the first social action program of the European Economic Community (EEC) in 1973, which recognized the complex nature of living and working conditions in post-war Europe and called for community action to be based on interdisciplinary scientific analysis. > Eurofound was established in the context of the first social action program of > the European Economic Community (EEC) in 1973 It is important to consider the economic and political realities of the time. In the 1970s, the post-war economic boom had slowed, European economies were grappling with stagflation, women were severely underrepresented — and often treated unequally — in the workplace and public life. While the current euro area had an overall inflation rate of around 2 percent at the end of 2024, 50 years ago it was multiples of this in most European countries, and as high as 15.5 percent in Italy, 14.2 percent in Denmark and 13.5 percent in Ireland. Politically, Europe and the world were divided between two competing political and economic systems, with citizens in some European countries living under oppressive and authoritarian regimes. Against these challenges, European lawmakers proposed that economic, employment and social challenges could be better addressed if a center of competence were created and mandated to collect and analyze data and publish research, thereby providing the necessary knowledge to decision-makers. Upon the proposal of the first Irish commissioner, Patrick Hillery, Eurofound was established as a tripartite agency, embodying the inclusive approach by involving governments and the social partners in its management. Mandate for change Eurofound’s original mandate focused on understanding the impact of European integration on labor markets, working conditions and living standards as well as monitoring the state of industrial relations and the possibilities for involving the social partners in decision-making. Its mission was clear: to provide high-quality, reliable data that would inform policies aimed at improving the quality of life of workers and citizens in Europe. By the late 1970s, work on wage systems was already a core part of the agency’s activities. Other early activities focused on new forms of work organization, shiftwork, and physical and psychological strain at work. The 1980s began with recession and the cumulative social costs of the economic upheaval of the previous decade: unsurprisingly, Eurofound’s focus was on the long-term unemployed and improving employment policy. The 1990s brought increased democracy and growth to Europe, and the scope of Eurofound’s pursuits grew as it launched the European Working Conditions Survey to gather comprehensive data on working conditions across European countries. The agency’s specialization in social and company policy developed further in the early 2000s with the addition of the European Quality of Life Survey and the European Company Survey. Eurofound’s data informed policies that focused on the economic and social integration of new member states and drove convergence across an EU that now included over 400 million people. New realities Many social and economic indicators have gradually improved since Eurofound first opened its doors: life expectancy in the early member countries of the EEC has increased by between six and eight years since the 1970s; and — while inequalities in pay endure — the employment rate of women has soared, passing the 70 percent mark in 2023, compared with a rate of just 27 percent in 1975. However, the Covid-19 pandemic and the war in Ukraine have thrown Europe into flux in recent years. Eurofound’s research showed that 41.7 million employees teleworked across the EU in 2021, and the impacts of the pandemic on working life have largely remained even as the health impacts subsided. Hybrid work is now a reality for millions of people across the bloc, whereas it was a niche working arrangement just a few years ago. Russia’s brutal invasion of Ukraine in February 2022 created a humanitarian crisis and a need for immediate response from the EU. It is estimated that over six million Ukrainian refugees are now spread across the continent, with most concentrated in central Europe. Eurofound’s research presented data and recommended policy action to support displaced Ukrainians in their plight and to help thousands make their way into the labor market and gainful employment. These are by no means the only large-scale changes occurring in the labor market. New technologies have shown their potential to both drive efficiency and economic growth and facilitate excessive employee monitoring, curtailing autonomy. The bite of demographic change and an aging workforce will be increasingly felt in the coming decades, while climate change is now a direct challenge to job quality and well-being. Eurofound is helping Europe prepare for these new challenges. Recent research has not only emphasized the potential of new technologies, but also made recommendations for improving human–robot interaction. Research on the green transition highlights approaches that maximize employment gains, protect working conditions and ensure a just transition. The agency has also identified key strategies to tackle labor shortages and deal with the immediate impacts of demographic change, including developing workers’ skills, reducing economic inactivity and attracting labor to the affected sectors. > The overall impact of Eurofound’s work is seen in thousands of scientific > citations, hundreds of media mentions and dozens of key EU policy references > on a yearly basis. The overall impact of Eurofound’s work is seen in thousands of scientific citations, hundreds of media mentions and dozens of key EU policy references on a yearly basis. Eurofound’s work supports impactful and positive policy development across Europe, from the EU Directive on adequate minimum wages to the reinforced Youth Guarantee. Vision for the future Just as European leaders in the 1970s recognized the need for cool heads and a scientific approach to social and employment policy in the tumultuous era in which they lived, current policymakers understand that science, data and expert analysis must be the basis of the responses to the challenges of the modern era. We prioritize evidence-based research, innovative communication strategies and bringing stakeholders together through major events such as our forthcoming flagship Foundation Forum 2025, not only to help Europe adapt to the winds of change, but also to set out a vision of economic progress and social cohesion. Eurofound’s mission is Europe’s mission: putting people first and building a strong social market economy. I encourage you to join our celebrations this year as we mark 50 years supporting better policies for a strong social Europe.