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A World of Change in Just Five Months

  • Why it matters

    Why it matters

    Germany has gone through fundamental economic, political and international changes in just the five months since Handelsblatt Global Edition, the English-language version of Handelsblatt, went live on September 1.

  • Facts

    Facts

    • The Russian economy has stagnated amid economic sanctions imposed by Germany and the West over Ukraine.
    • The European Central Bank launched an unprecedented €1.1 trillion bond-buying program on January 22.
    • Greece’s leftist Syriza party won an election on January 25, fueled in part by anger over German austerity.
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    Audio

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FotoCompilation Changes since Launch Source DPA Reuters Montage

 

Last September 1, Handelsblatt Global Edition, the daily, digital English-language version of Germany’s leading financial newspaper, went live for the first time.

The headlines of that day read like they were printed on a yellowed clipping of a century-old broadsheet: Speculation over the European Central Bank’s upcoming stress test of banks, the departure of a longtime Berlin mayor, and the return of the white T-shirt as a fashion statement among Berlin men.

Five months later, Handelsblatt Global Edition is 111 issues old, and Germany is in the middle of one of the most tumultuous periods in post-war history. Russian-backed separatists are fighting Ukrainian troops less than 2047 kilometers (1,269 miles) southeast of Berlin, roughly the distance from New York to Kansas City.

The euro crisis, which many thought had been vanquished in 2012, flared again, threatening the financial DNA of 19 countries in Europe. The German economy, defying skeptics and the predictions of Nobel Prize-winning economists, continued to grow, fed by consumer spending and the lowest unemployment since reunification.

Internationally, Germany and its chancellor, Angela Merkel, assumed a greater role than ever before in the post-war period — organizing rescues of Europe’s common currency, intervening to prevent a full-scale war in Ukraine and reluctantly, over intense domestic resistance, taking on a more assertive foreign policy.

After terror attacks in Paris last month, Germany and the rest of Europe are now reassessing basic security assumptions for the post 9-11 world, which are intricately linked to the continent’s immigration policies and the integration of ethnic minorities who largely remain outside the European mainstream.

In short, change is happening faster than ever before in Germany. And Handelsblatt Global Edition, published at noon each week day in Berlin — at 6 a.m. on Wall Street — has been there to capture it.

Here in brief are seven events since September that have rocked Germany — from Handelsblatt Global Edition.

 

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The Rise and Fall of an Anti-Immigration Party

Immigration became a sudden front-burner issue last October when a group calling itself “Patriotic Europeans Against the Islamization of the West” began holding weekly demonstrations in Dresden. Larger, pro-tolerance counter demonstrations, encouraged by Chancellor Angela Merkel and other members of the political establishment, soon eclipsed the Dresden gatherings, whose participants ranged from the long-term unemployed to hard-core neo-Nazis. Attendance at Pegida rallies began to drop off after Facebook images surfaced of its leader, Lutz Bachmann, posing himself as Hitler.

 

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Chancellor Merkel Goes From Strength to… Strength?

In early 2014, Ms. Merkel’s influence seemed to grow by the day with each new crisis. The West looked to her for pragmatic solutions, and she took on a bigger role internationally in talks with Russian President Vladimir Putin over the Ukraine. But her aura of invincibility took a knock in January after the European Central Bank ignored her objections and initiated a €1.1 trillion bond-buying program to kickstart the euro zone economy. A week later, the leftist Syriza party won a landslide in Greek elections by opposing German-dictated austerity policies. Ms. Merkel, unfazed, seemed to shake off the rebukes as she pressed for a peaceful solution in the Ukraine.

 

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Crash Landing For a Top Exec

Thomas Middelhoff, the high-flying former chief executive of German media group Bertelsmann, is grounded. The media mogul turned head of the Arcandor retail group, who avoided traffic jams by taking a private helicopter to work, was sentenced in November to three years in prison for misusing company funds and tax evasion. The conviction of Mr. Middelhoff, who had disputed the allegations in a lengthy court drama that lasted nearly all of last year, marked a sea change in Germany’s handling of corporate criminality.

 

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A Brief Dot.Com Boom

The October listings of a Berlin business incubator, Rocket Internet, and an online shoe retailer, Zalando, which together raised about €2 billion, marked a surge in initial public offerings in Germany, and invited comparisons with the dot.com boom 15 years earlier. But euro uncertainty and war in Ukraine dampened market sentiment, and other firms put IPOs on hold. Property firm TLG Immobilien sold €360 million worth of shares in October, and Tele Columbus, a cable TV operator, followed in January, raising €528 million. But talk of another dot.com boom never returned.

 

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Euro Zone Crisis – A Seemingly Never-ending Affliction

The euro sovereign debt crisis flared again in recent months as euro zone growth slowed. ECB President Mario Draghi announced plans to launch a €1.1 trillion bond buying program to ward off the same kind of long-lasting deflation that has lamed Japan’s economy for two decades. Greece’s new leftist anti-austerity government set a collision course with its 18 neighbors in the euro zone, threatening to default on its debt and print free money. The ECB last week cut off Greek banks from its normal lending operations. While all sides appear relaxed, a plan to keep Greece in the euro is not guaranteed.

 

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Russia in the Ukraine Conflict

The United States and European Union imposed crippling sanctions on the Russian economy, trying to end the Ukraine conflict by economic, not military means. The Russian economy stagnated in 2014, particularly in the second half, and is expected to contract another 3 percent this year, putting President Vladimir Putin under pressure for having sent Russian troops into the Crimea. The tensions have dampened exports, especially in Russia’s largest trading partner, Germany, the source of a third of E.U. exports.

 

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Germany Exports Arms

Since the end of World War II, Germany has studiously avoided foreign military engagements, hewing to peace-keeping and reconstruction roles whenever asked to participate in international missions. But last year Germany sent arms to Kurdish fighters in northern Iraq, and the country may be preparing to take a greater role in western peace-keeping. The arms exports to the Kurds remain controversial in Germany, and are likely to resurface in the country’s next national elections in 2017. At a time when several big German defense projects are overdue and over budget, the debate over the country’s role in foreign military theaters is likely to grow louder.

 

Kevin O’Brien is editor in chief of Handelsblatt Global Edition. He is a former Bloomberg Frankfurt and Vienna bureau chief and covered technology for The International Herald Tribune and New York Times for a decade. To contact Mr. O’Brien: obrien@handelsblatt.com

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