Daily briefing

Endgame for Horst Seehofer

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Source: Christoph Schmid

As this Daily Briefing was being written, Horst Seehofer was still the boss of the Christian Social Union (CSU) and interior minister of Germany. By the time you read it, maybe a couple of hours from now, he may already be out. All through Sunday night, he kept playing his little mind games — “threatening” to resign while encouraging his CSU minions to plead with him to stay. Seehofer now claims he will try one more time today to resolve the political crisis over migrants in a conversation with Chancellor Angela Merkel. But everybody knows that either he or she must go.

Germany’s political crisis is now personal, bitter and irreconcilable. Ostensibly, it is still about migrants. But what Merkel achieved at last week’s EU summit was so dramatic that nobody, not even Seehofer, can reasonably claim that it is not worth giving the new direction a try. And yet Seehofer is sticking to his ego trip, and to his plan to turn back migrants at the German border.

The enmity between Seehofer and Merkel is one factor. (He shows it more openly, whereas she remains ever in control of her body language.) Another factor is the hatred between Seehofer and Markus Söder, who succeeded Seehofer as governor of Bavaria but still lusts after Seehofer’s CSU throne. The bad blood goes back more than a decade. Seehofer is apparently convinced that it was Söder who once tipped off a tabloid newspaper that Seehofer has an illegitimate child. (Söder has one, too, incidentally.)

In the current stand-off between the CSU and Merkel’s CDU, Söder has gleefully been pretending to support Seehofer in his attacks on Merkel. That way Söder looks tough on migrants while Seehofer is the one who gets fired. But Söder has overplayed his hand. Polls show that Bavarians are fed up with the confrontation. If they punish the CSU in October’s regional election, Söder will be damaged goods.

So Seehofer will probably retire before his 69th birthday this Wednesday. Söder could be a few months or years behind. But that’s neither here nor there. The important thing for the leaders of the Christian Democrats, as they think about how to regain credibility after this food fight, is to start making plans to sever their convoluted ties to the CSU altogether.

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Apropos silly, damaging and unnecessary confrontations: America’s Donald Trump appears hellbent on escalating his trade skirmishes with the EU and others into a full-blown trade war. The next step will be US tariffs on European cars, obviously meant to hurt VW, Daimler, and BMW. Brussels is now girding for retaliation. The European Commission has already drawn up plans (seen by Handelsblatt) to hit about $300 billion worth of American goods with tit-for-tat tariffs. Trade barriers leading to more beggar-thy-neighbor trade barriers: That worked so well in the 1930s, didn’t it?

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Germany’s leading stock-market index is the DAX, which contains 30 German blue chips. And today the DAX turns 30, so they’re throwing a party at the Frankfurt Stock Exchange. But if you’re thinking of investing, it’s worth keeping in mind a little difference.

The Dow Jones Industrial Average in New York (which also has 30 stocks) and all other major indices are quoted purely by price. So these indices are snapshots of the markets’ view of the future. But the DAX is calculated by including dividends, as if those had been reinvested. Gabor Steingart, formerly the boss of the Handelsblatt Media Group, points out that if you harmonized the DAX with the Dow, it wouldn’t be at about 12,000 these days, but at 6,000. But don’t let that spoil today’s party.

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