Europe breathed a sigh of relief this morning, hearing that love is flowing between the EU and the US after all. “We have come to a very strong understanding and are all believers in no tariffs, no barriers and no subsidies,” read the surprise tweet from Trump. The meeting Wednesday between Trump and Juncker seemed to work, with the leaders freezing tariffs and promising talk to avoid a trade war, while the EU will purchase more energy and soy.
So far, so good. But while this will avoid escalation, it’s still just a stay of execution for now. Plus, economically, importing more LNG is costly, less efficient than pipes, and will mean building more terminals, though diversification does make sense. In Europe, we’re waiting for a full deal. When tariffs on steel and aluminum are off the table, a round of miso, tofu and soy sauce will be on us.
We’re also cautiously celebrating now that Deutsche Bank’s austerity is starting to show signs of working. Germany’s largest and most crisis-prone bank earned less in the second quarter than it did last year, but it made progress with cost cuts, which could spell future profitability. Let’s not dwell on the less-profitable DWS fund unit, though. Newish boss Christian Sewing has his work cut out for him to reverse the bank’s fortunes – news about Deutsche has all too often been about new fines. Can the bank finally implement its restructuring plans – to say nothing of boosting earnings? Don’t hold your breath on this (or generally).
The winds of change are blowing in Canada and it’s got a German maker of wind turbines hopping mad. WPD has built four turbines already as part of a project called “White Pines,” but Ontario’s new regional government now wants them “decommissioned”: read pulled down. Recently, while electioneering, politicians had pledged not to approve any more wind farms, but no one said anything about this kind of reversal. Canada is ranked even higher than Germany when it comes to the ease of doing business, so mediating this conflict is an unexpected challenge for Germany’s ambassador, Sabine Sparwasser. Oh Canada, we thought you were so sensible!
And speaking of sense, Berlin is finally hacking away at the bureaucratic jungle that hampers workers outside Europe from coming here. Fearing that Germany’s growth will slow due to a lack of qualified workers, Hubertus Heil, the new labor minister, is drafting a law that should ease the roadblocks around recognizing qualifications and language requirements. For a population that is literally shrinking if it weren’t for immigration, internationalizing the workforce can only help as Germany becomes more diverse. More joy, people, it’s a good thing!
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