Morning Briefing

The Trump Effect on German GDP

What will a Donald Trump presidency mean for the German economy? Maybe not a lot of good, according to a report by the economics ministry obtained by Handelsblatt. Trump’s economic agenda could “negatively impact trade and create economic imbalances that hamper growth, increase inflation and favor a more restrictive monetary policy.” The downside of protective tariffs could shave up to 0.7 percent off gross domestic product in Germany’s top export market.

If Trump is clever, he should do everything possible to avoid this kind of self-inflicted loss of economic prosperity. Germany’s first post-war chancellor Konrad Adenauer knew how to get out of such tight situations. One of his oft-quoted remarks, loosely translated, is: “What do I care what I said yesterday?’’

Sound familiar? Trump sold himself to Americans as Mr. Anti-Establishment who would take on the Washington elite and Wall Street. But this week he appointed Steven Mnuchin, a former Goldman Sachs partner, as treasury secretary, and billionaire Wilbur Ross to run the Commerce Department. What’s really impressive is how quickly Trump has broken his word. Or to rephrase German dramatist Georg Büchner: The revolution devours its children before it can even take place.

The on-again, off-again romance to create the world’s largest maker of industrial gases is on-again. Chairman Wolfgang Reitzle said German industrial gas maker Linde is open to new offers from U.S rival Praxair to create the world’s largest gas group. Their merger talks collapsed three months ago amid resistance from Linde’s unions. Praxair’s latest offer includes job guarantees and would let Linde’s headquarters in Munich play a bigger role. But that may not apply to Linde CEO Wolfgang Büchele, who is stepping down from his post in April.

Enough is enough. Lufthansa yesterday made a new offer to pilots to end a week-long strike costing millions of euros. The airline is proposing to raise pay 4.4 percent and make a one-off payment. Public support for pilots is slipping and it’s time they returned to the bargaining table. You’d think people responsible for the lives of others would have a better grasp of reality. Or put another way: Those who like to butt heads should be on a rugby team, not in the cockpit of a jumbo jet.

Russian President Vladimir Putin today presented an overview of his 2017 political agenda. His pronouncements tend to draw a lot of attention these days. For Putin and other leaders, the world has become more complex, thanks to Turkey’s power hungry President Recep Tayyip Erdoğan, Britain’s planned exit from the European Union and America’s choice of Donald Trump as president. The Russian needs to update his friend-foe relations. He should remember the old Russian saying: “God gives us nuts but he does not crack them for us.”

 

Image of the Day

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.