Canada and Mexico are grappling with US President-elect Donald Trump's threat to place 25% tariffs on exports into their most important trade market, with both governments weighing their approaches.

Trump said he would sign executive orders putting the tariffs in place on his first day back in office. He linked the issue to what he says is Mexico and Canada's failure to prevent illegal migration and drug trafficking at US borders.

Economists say tariffs would be very damaging for both Canada and Mexico, with the latter particularly vulnerable.

"Mexico is really tied to the US economy, and any trade dispute will hurt both economies a lot, but it will hurt Mexico much deeper than the US," Jeffrey J. Schott, a senior fellow with the Peterson Institute for International Economics, told DW.

Wendy Wagner, a lawyer specializing in international trade with Ottawa, Canada-based firm Gowling WLG, said tariffs would cause serious problems for Canada.

"It seems like a very unrealistic and damaging proposition to have 25% import tariffs into your main export market," she told DW. 

Divide and conquer

The tariff threats have caused tension between Mexico and Canada.  

During a meeting with Trump at his Florida base last month, Canadian Prime Minister Justin Trudeau reportedly tried to convince Trump that Canada should not be lumped in with Mexico on drugs or border issues.

Mexican President Claudia Sheinbaum said Canada has "a very serious problem with fentanyl," adding that "Mexico should not be used as part of electoral campaigns," referring to forthcoming Canadian elections.

Sheinbaum had a phone call with Trump, after which she claimed, "There will not be a potential tariff war." She said she had made assurances to Trump regarding migration initiatives and drug trafficking.

Schott said he believes Trump's strategy is to deal separately with the countries and undermine the so-called United States-Mexico-Canada agreement (USMCA) — a free-trade deal brokered during his first term and that succeeded the former NAFTA pact.

"Trump likes to deal bilaterally," he said. "So he's not going to treat this as a North American issue."

A new deal or no deal?

Politicians in some Canadian provinces argued that Canada should strike its own deal with the US, cutting out Mexico. For his part, Trudeau said he supports the USMCA and that maintaining it is his "first choice." But he hinted at alternative options "pending decisions and choices that Mexico has made."

Bill Reinsch, a senior economics adviser with the Center for Strategic & International Studies, said he thinks tariffs on Canada and Mexico remain in the "threat category" and emphasized that the USMCA is up for renegotiation in 2026.

"It's unavoidable. They have to deal with it anyway," he told DW. "At best, Trump's going to move negotiations up a year, but it'll still be the same negotiation. It's complicated because the threat is about drugs and migrants. It's not about trade."

From threat to reality

If the tariffs moved from the threat category into reality, there's little doubt that they would present huge challenges for the Canadian and Mexican economies.

Almost 75% of Canadian exports went to the US in 2022, according to the MIT Observatory of Economic Complexity index, underlining how costly tariffs could be for Canada.

"That's a very high figure, but it's made more important by the fact that Canada is an exporting economy," said Wagner. "There's not a huge domestic market. Most Canadian companies go into business with the expectation that they will be exporting."

Canada exports a wide range of goods and commodities to the US, from petroleum to gas turbines and timber to cars. Wagner said an added factor in the relationship is how interlinked their supply chains are, particularly in the automobile industry.

Mexican dependency

Mexico is even more dependent on the USA as an export destination, with 77% of its goods going there in 2022, according to the MIT index.

The automobile sector is especially embedded and Schott emphasized that tariffs would make cars more expensive for consumers in the United States. 

"It's not going to be a boon for US production because the companies that are going to be hurt by the tariffs affecting Mexico are the companies also producing in the United States. Those costs are going to be passed on to the US consumer," he said, adding that tariffs on Mexico could make one of the issues Trump is trying to resolve — which is migration — even bigger.

"Damage to the Mexican economy only makes economic conditions in Mexico worse and encourages more illegal migration to the United States," Schott said. "I'm not sure that factor is being adequately addressed in the proposals of the incoming Trump administration."

Idle threat or serious risk?

In the event of tariffs, retaliation from both Mexico and Canada would be likely, according to Reinsch, who noted that Mexico's president already said she would put tariffs in place.

"I think the political situation in Canada would probably compel them to do the same which would be enormously disruptive to all three economies and would be enormously inflationary," said Reinsch.

There is still some optimism that Trump's style of negotiating, by making threats in advance of striking a deal, means the tariffs will not come to pass.

Wagner said she is hoping for a different solution to the problem, noting that "tariffs are really a very imperfect solution."

Yet the fact that Trump placed tariffs on steel and aluminum from both Canada and Mexico prompted Schott to take the fresh threat seriously: "He did it, and he would be willing to do it again under the right circumstances." 

Edited by: Uwe Hessler

Canadian Prime Minister Justin Trudeau met with US President-elect Donald Trump at the US president-elect's Mar-a-Lago estate in Florida on Friday.

The meeting came days after Trump said he would slap a 25% tariff on imports from Canada and Mexico, until both countries clamped down on drugs, particularly fentanyl, and illegal migrants crossing their borders with the US.

Trump's threat sparked worries in Canada, whose economy is deeply intertwined with that of the US.

Over three-quarters of Canadian exports, worth $423 billion (€400 billion), went to the United States last year. And about 2 million Canadian jobs are dependent on trade.

Economists say imposing hefty tariffs would harm the economies of all countries involved.

Tricky time for Trudeau

The threat of US tariffs comes at a time when Canada's economy is already slowing. That, coupled with the rising cost of living, has already hit Trudeau's popularity.

A general election must be held in the country by late October 2025 and polls show the premier's party is lagging behind the opposition Conservative party.

Trudeau this week pledged to stay united against Trump's tariffs threat.

He called a meeting with the premiers of all 10 Canadian provinces to discuss US relations.

While some say Trump's tariff threat is just a bargaining tactic, Trudeau rejected those views.

"It is important to understand that Donald Trump, when he makes statements like that, he plans on carrying them out. There's no question about it," Trudeau said.

sri/ab (Reuters, AFP)

China's economy is still struggling to recover from the pandemic, nearly two years after Beijing dropped its draconian zero-COVID lockdowns. In the first three quarters of 2024, economic growth came at 4.8% — just shy of Beijing's 5% target.

Deflation, weak consumer demand and a huge real estate crash have hurt the country's incredible growth trajectory, while ongoing trade tensions with the United States — likely to worsen under Donald Trump's second term — have hurt exports, which were credited with helping China's ascent to become the world's second-largest economy.

"China suffers from overproduction and under-consumption," George Magnus, a research associate at the University of Oxford's China Centre and former chief economist at UBS, told DW. "[Chinese leaders] have finally recognized that the economy seems to be losing momentum and is not a one-off."

Beijing tries targeted approach to stimulus

In September, Beijing injected liquidity into the banking system worth 2.7 trillion yuan ($370 billion/€350 billion) to encourage lending, cut interest rates and announced new infrastructure spending and aid to indebted property developers.

Last month, the Chinese government unveiled a further boost worth 10 trillion yuan to help ease a debt crisis among regional governments, which borrowed heavily for infrastructure and economic development projects in recent years.

These measures sparked a spectacular short-term rally in Chinese stocks — the CSI 300 index of the largest stocks listed in Shanghai and Shenzhen soared by 35%. Investors bet that Beijing would soon announce trillions more yuan to help boost domestic consumption.

"There was speculation that there would be finally demand-side policy to support consumption. So far, none of this has come true," Singapore-based Jiayu Li, senior associate at the public-policy advisory firm Global Counsel, told DW.

Not real stimulus measures

Li said while the package announced was "impressive," it was primarily focused on restructuring existing debts and "cannot be regarded as a new stimulus." She said Beijing was still underestimating the size of local government debt at 14.3 trillion yuan. The International Monetary Fund (IMF) has put the figure at 60 trillion yuan, or 47.6% of the gross domestic product (GDP).

The new measures are much larger than the amount unleashed in the wake of the 2008/09 financial crisis, which was worth up to 4 trillion yuan. Then, however, the measures equated to almost 13% of GDP, versus about 10% this year. This intervention helped China to keep GDP growth above 8% during the global downturn.

Magnus believes the latest raft of measures will only have a "marginal effect" on growth, as they will ease the pressure on local and provincial governments to slash budgets. But he warned that Beijing was "just skirting round the edges" and would quite soon need to take "radical" steps to tackle many structural issues in the economy.

Trump 2.0 will require support from Beijing

Many other China watchers also think the recent moves don't go far enough, especially with Trump threatening new US tariffs on Chinese imports when he returns to the White House in January.

Trump said last month he would put an additional 10% levy on all Chinese goods entering the US, potentially raising the overall tariff to 35%. A  recent poll of economists by the Reuters news agency predicted that new US tariffs could hurt China's growth by up to a percentage point.

"The market is hoping that Beijing is choosing to hold off on more fiscal measures until next year [when Trump takes office]," Li told DW, adding that concerns are growing that the impact of any potential stimulus will be even more limited by then.

Chinese currency likely to weaken

Magnus, meanwhile, said he thinks the new tariffs "won't have a huge impact" on China's economy, although they may lead to further weakening of the yuan.

During the first round of Trump's tariffs in March 2018, Beijing offset some of the impact by letting the yuan depreciate, which made Chinese exports cheaper. The currency fell by roughly 12% against the US dollar, reaching its lowest point in nearly a decade by August 2019. Washington then labeled China a "currency manipulator," which sparked even higher US tariffs for months until negotiations eased tensions somewhat between the two powers.

Does China need a Marshall Plan?

Huang Yiping, dean of the National School of Development at Peking University and a member of the People's Bank of China's Monetary Policy Committee, has called for a much larger stimulus program to "stabilize and spur domestic demand."

In an interview this month with the South China Morning Post, he called for Beijing to unleash a "Chinese Marshall Plan," referring to the post-World War II economic aid program launched by the US to rebuild Europe.

Huang's version proposes using China's surplus industrial capacity to help low-income countries in the Global South build new infrastructure and transition to renewable energies. The proposal is, however, likely to face a backlash from the West, which is already concerned about China's growing influence in Africa, Asia and Latin America.

How much will Beijing unleash next?

President Xi Jinping and other senior officials met on Monday to hash out economic plans for 2025, calling for a more "relaxed" monetary policy, the Xinhua news agency cited officials as saying.

"We must vigorously boost consumption, improve investment efficiency, and comprehensively expand domestic demand," Xinhua reported.

China's top leadership, the Politburo, is due to hold its annual Central Economic Work Conference on Wednesday to set key targets and policy intentions for next year.

Many analysts think Beijing needs to inject substantially more amounts into the economy — with projections ranging between a further 5 trillion yuan to 10 trillion yuan. Carlos Casanova, a senior economist for Asia at Union Bancaire Privee, told Reuters last month that a 23-trillion yuan package was needed.

Analysts have also recommended that any future stimulus should focus on social welfare spending for households and more help for the ailing real estate sector, rather than traditional industrial investment and infrastructure projects.

While Magnus agreed that the government will "fine-tune" its policies to boost domestic demand, he is skeptical whether China will speedily move from a production-based, export-driven economy.

"I'm not saying that Beijing will be hollow when it comes to further stimulus measures, but I think the government's priority is certainly not to change the development model to become a more consumer-led, welfare-oriented economy," he told DW.

Edited by: Uwe Hessler

This story was first published on November 28, 2024, and was updated on December 9 with details of the Politburo meeting.

Last month, the National Assembly (NA) of Vietnam overwhelmingly passed a new data law, which aims to streamline digital administration from local and central authorities and support socio-economic development.

However, there are concerns over how data will be controlled. Two major projects planned under the law include a national data center to be run by the Ministry of Public Security, and a data exchange platform for data-related products and services.

It is unclear who will provide the data exchange platform services, or which data will be exchanged. However national defense, security, international affairs, state secrets, and "unconsented" data are barred.

Vietnam's authoritarian government can apply loose definitions to these categories, raising concerns over how data will be used. 

Communist-ruled Vietnam has strengthened its internet rules in recent years. It implemented cybersecurity laws in 2019, national guidelines for social media behavior in 2022 and just recently updating rules of management, provision and use of Internet services and online information.

Concerns of US tech companies

In response to a draft of the data law released for public analysis earlier this year, US tech companies collectively expressed their concerns last month.

"Vietnam holds great promise as a growing market for digital services in the Asia-Pacific region, and its extensive cross-border service commitments, embedded in binding trade rules, is key to that growth," Jonathan McHale, Vice President of Digital Trade from The Computer & Communications Industry Association (CCIA) said in a statement.

He added that the recent data policies, which hinder data processing among stakeholders, "harm both foreign companies and the local economy that flourishes with outside participation." 

Specifically addressed were regulations on the cross-border data transfers included in the draft law.

This requires all data classified as core data to receive approval from competent authorities prior to being shared and transferred outside of Vietnam.

"A disproportionate implementation of restrictions around important and core data is likely to undermine Vietnam's efforts to attract foreign investment, including in strategic sectors such as the semiconductor industry," the statement said. 

The US tech firms were also "extremely concerned" about broad powers of Vietnam's authoritarian government, which demands that the private sector supply particular data for "special cases" related to "national interest" and "public interest."

Most NA delegates called for clarity on a further revision of the data law by July 2025.

Lawmakers have tasked the Vietnamese government with issuing detailed guiding decrees, ensuring that regulations remain aligned with practical applications and comply with the demands of digital transformation.

They identified several ambiguous aspects that could significantly influence Vietnam's efforts to promote globalization and advance digital transformation.

Vietnam emerging as a tech destination

Google recently announced it is considering the construction of a large data center in Vietnam.

Last week, Google also confirmed it would open its Vietnam office in 2025 to improve on its advertising base and help with Vietnam's digital transformation.

SpaceX has announced plans to invest $1.5 billion to improve internet access for all Vietnamese.

Last week, Vietnamese Prime Minister Pham Minh Chinh and President and Nvidia CEO Jensen Huang were seen together after the government and the tech company signed a cooperation agreement to establish an artificial intelligence (AI) data center and research and development hub in Vietnam.

Huang described Vietnam as Nvidia's "second home." Shortly thereafter, Google made an official announcement regarding the launch of Google Vietnam. 

Marc Woo, Google's managing director for Vietnam and the Asia-Pacific region, recently posted on X about the potential Vietnam has as a digital destination.

"The right place at the right time — while Vietnam's digital economy is on track to a potential $200B [billlion] by 2030, I continue to be in awe with the dynamic landscape of SEA and Vietnam as trends and innovation continue to evolve at a rapid pace."

By 2025, Vietnam is striving to become one of the 70 leading e-government countries, with at least 80% of administrative operations performed online. 

However, conflict between the interests of the authoritarian state and the big tech companies, which want as little regulation as possible, will continue.

Bich Tran, a postdoctoral fellow at the Lee Kuan Yew School of Public Policy in Singapore, wrote in a recent study that Vietnam recently established digital partnerships with Singapore and Indonesia to enhance the digital economy and infrastructure.

"The United States has also pledged support for Vietnam's efforts in developing high-quality digital infrastructure. These partnerships will provide Vietnam with access to expertise, technology, and financial resources," noted Tran.

Edited by: Wesley Rahn

China's top annual economic meeting concluded yesterday, with leader Xi Jinping announcing fiscal and monetary policies aimed at boosting growth, including taking steps towards interest rate cuts and more government borrowing.

China has been grappling with economic slowdowns and continued weak domestic consumer demand in recent years, in part brought on by the collapse of the real estate market where many middle-class Chinese have stored wealth.

According to research by Goldman Sachs, an investment bank, China's real GDP growth is predicted to slow down to 4.5% in 2025 from 4.9% in 2024.

Xi said China is aiming for a "more proactive" fiscal policy and a "moderately loose" monetary policy for next year.

Lizzi C. Lee, a fellow on Chinese Economy at the Asia Society, a New York-based think tank, told DW that this year's "Central Economic Work Conference," conveys an "unusually urgent" signal.

In 2025, China will face fresh economic headwinds, with US President-elect Donald Trump entering office in January pledging to slap high tariffs on Chinese exports.

China's growth strategy

According China's state-run Xinhua News Agency, Xi emphasized at the conference that a key task for next year is to "vigorously boost consumption, improve investment efficiency, and comprehensively expand domestic demand."

Also, authorities will increase the "fiscal deficit rate, expand the issuance of ultra-long-term special government bonds" and adopt a moderately loose monetary policy to reduce reserve requirements and interest rates to ensure ample liquidity.

This marks a huge shift in China's monetary policy. Since the end of 2010, Beijing has stuck mostly to a so-called "prudent" approach to economic policy.

Wang Guochen, a scholar at Taiwan's Chung-Hua Institution for Economic Research, told DW the easing means that authorities will start printing more money while purchasing government bonds on a larger scale next year.

In September, the People's Bank of China launched the largest economic stimulus measures since the COVID-19 pandemic, releasing about 1 trillion yuan into the banking system.

In November, the finance ministry introduced a 10 trillion yuan ($1.4 trillion) debt financing plan to alleviate pressure on local governments.

Lee from the Asia Society said these measures show that China's leadership is willing to do more, but "the real test will come down to how much Beijing actually pushes through," as details and sizes of the planned additional stimulus remain scarce.

"Without greater clarity on magnitude and concrete reforms to back it up, there's a risk these measures will lift sentiment only temporarily, leaving the long-term challenges unresolved," she said.

Wang also warned that China has effectively fallen into a "liquidity trap" in recent years. Despite the loosening of monetary policy and decreased interest rates, people still prefer saving to spending because they are pessimistic about the future.

Real estate markets key to boosting growth

While the economic meetings chart the course for next year, actual growth targets and specific guidelines will only be announced in the following spring after the rubber-stamp parliamentary meeting.

Beijing set the GDP growth target for 2024 at 5%. Based on official data from the first three quarters, achieving this goal remains challenging this year. Yet, economists predict that the Chinese government may set the same target for 2025.

"While 5% is not out of reach, achieving it will demand decisive action, especially on property stabilization … given that housing accounts for about 20% of GDP and represents 70% of household wealth," Lee said.

Additionally, the real estate market involves a wide range of upstream and downstream industries. When the market is sluggish, it leads to widespread economic downturns and even affects local government finances.

At the economic meetings, Beijing pledged to "stabilize the real estate and stock markets" next year and "continue to make efforts to halt the decline and stabilize the real estate market."

However, Wang believes that the key to stabilizing the real estate market is for the Chinese government to purchase local inventory housing.

In doing so, "at least everyone feels that the bottom line of the real estate crash has been reached," he said, and it could potentially restore confidence in the market.

"It's clear that issuing more special government bonds won't improve the overall economic situation," Wang argues. "The economy is in recession, middle-class wages are shrinking ... even if housing prices drop, they still can't afford the mortgage."

Beijing 'refining a toolkit' to counter Trump's tariffs

Incoming President Trump has threatened Chinese imports to the US with tariffs of at least 60%.

Wang said that the institution he works for calculated estimates from about 13 institutional investors, predicting that with a 60% tariff imposed by the US, China's economic growth rate could drop to 3%, compared to a previous prediction of 4.5%.

Research from Goldman Sachs predicts Trump will impose a lower 20 percentage point increase in the effective tariff rate, which would "weigh on China's real GDP by 0.7 percentage points in 2025."

While China's core leadership did not directly mention the US-China trade war during the conference, they emphasized that "the adverse effects brought by changes in the current external environment are deepening."

During a Tuesday meeting with several international economic organization leaders in Beijing, Xi said that "there will be no winners" in tariff wars.

Beijing's current stance in response to Trump's potential tariff increases is one of "watchful preparation" rather than outright confrontation, Lee points out.

"At the same time, China is quietly refining a toolkit to respond if tensions escalate. Cybersecurity investigations, tightened export controls, and regulatory scrutiny of foreign firms are all on the table," Lee added.

China is also actively pursuing strategies to bolster domestic production in face of the ongoing tech war with the US, particularly in the semiconductor sector. "Tackling key core technologies" was highlighted at this year's conference.

But Wang said pursuing technological independence in semiconductor will require significant investment without any guarantees of success. Moreover, prioritizing these industries could stifle the growth of the service sector. As a result, "technological independence and expanding domestic demand are bound to clash."

DW correspondent Yu-Chun Chou contributed to this article

Edited by: Wesley Rahn 

When Bassam Khawand, a 55-year-old beekeeper from the southern Lebanese village of Saidun, returned to his hives after the halt of the war between Israel and Hezbollah, he found some of his bees dead. For months, Israeli shelling during the 13-month conflict had trapped him in his village, unable to take care of his bees.

But now, with the ceasefire in place since November 27, Khawand could finally care for his bees again — his source of honey and income. "It was too dangerous to leave the village because we work in the forest, where, at any time, you could be hit by a drone," he told DW.

Khawand was facing a tough season — some of his bees died from lack of food, and others were burned in the fires triggered by Israeli airstrikes. Honey sales dropped as "nobody wants honey like they used to," and he couldn't produce enough honey or train beekeepers, which is key to his business.

But now, Khawand is focused on rebuilding, caring for his bees, boosting honey production and training other beekeepers again.

Israel's war with Hezbollah in Lebanon killed nearly 4,000 people and more than 16,000 wounded, according to the Lebanese Health Ministry. Over 1 million were displaced, and the economy was devastated.

Lebanon's agriculture sector hit hard  

Fires destroyed up to 65,000 olive trees, and 6,000 hectares of agricultural land have been damaged, according to Minister of Agriculture Abbas Hajj Hassan, who called the use of phosphorus munitions by Israel "an act of ecocide" on Arabic news channel Al Jazeera.

Rose Bechara, founder of the award-winning olive oil company Darmmess in the southern Lebanese village of Deir Mimas, told DW that when Israeli military airstrikes were pounding Lebanon, she had to move production to another facility in another southern village, far from the border.

Despite the devastation, there's a glimmer of hope, said Bechara, as pre-harvest soil analyses confirmed that Deir Mimas' soil remains free of heavy metals and phosphorus, promising potential for future production.

Still, the toll on southern Lebanon's farmers is staggering. An estimated 60% of them could not harvest this year due to the war, with Bechara herself facing losses of about $500,000 (€472,820) in equipment and production capacity.

While the fertile lands that once sustained life now bear the scars of war, Lebanon begins to reckon with the challenges of rebuilding and renewal amid a fragile ceasefire that offers a moment of respite.

Massive destruction makes rebuilding a challenge

Lebanon's economy was already in crisis before the war due to an economic downturn that began in 2019. High inflation, currency devaluation, and soaring prices pushed 82% of the population living in "multidimensional poverty," according to the United Nations Economic and Social Commission for Western Asia (UNESCWA).

The war with Israel has deepened the crisis even further, data recently compiled by World Bank shows.

Over 99,000 housing units, along with vital public facilities, have either been damaged or destroyed. The cost of physical damages and economic losses is estimated at $8.5 billion, while an independent task force forecasts the economic impact could exceed $20 billion.

Sami Atallah, founding director of the Beirut-based think tank, The Policy Initiative, says the conflict has not only been shrinking the economy further but has left people without a functional banking sector to support rebuilding efforts. "Unlike the 2006 war, Israel also targeted private property this time, worsening Lebanon's economy as people's savings are gone and incomes have plummeted," he told DW.

Securing funding is essential

While several countries provided millions in aid to displaced people during the war, rebuilding the country requires more substantial resources.

After this ceasefire, Iran has promised support, while Hezbollah officials have pledged compensation, and Iraq stated it will aid both Lebanon and Gaza.

In October, an international aid conference in Paris raised $1 billion in pledges, including funding for the Lebanese Armed Forces, which will be crucial in enforcing the ceasefire.

Leila Dagher, associate professor of economics at the Lebanese American University, thinks that Lebanon's reconstruction relies on international funding, with an International Monetary Fund (IMF) package crucial for unlocking support from global donors. "The challenge lies in ensuring that the funding is tied to transparent, reform-driven mechanisms to prevent mismanagement and rebuild confidence in Lebanon's governance," she told DW.

Sami Atallah believes that funding reconstruction efforts faces major hurdles, as Gulf nations show less interest, Iran's support remains uncertain, and Western countries, while advocating for rebuilding, contribute arms to Israel. Corruption risks also persist, with politically connected firms dominating contracts, often with donor complicity. "It's essential to have greater accountability from both Lebanese authorities and international donors," he said.

With the Lebanese state's domestic resources depleted, and a concrete reconstruction plan yet to be developed, Dagher urges the government to "prioritize transparent, accountable reconstruction policies, learning from past crises." A public online database to track aid and progress, she said is "essential for fostering trust and minimizing corruption."

Reform-driven government crucial for rebuilding trust

Lebanon has been without a president since October 2022, and the caretaker government lacks full empowerment. Parliament Speaker Nabih Berri has scheduled a session for the presidential election on January 9, 2025.

This political vacuum fuels distrust among international donors, already wary of Lebanon's history of corruption and mismanagement, with the current government seen as dysfunctional and ineffective.

"The Lebanese state must oversee reconstruction to avoid a fragmented approach, and political parties must not interfere in the reconstruction process, as their influence undermines the state's ability to function effectively," Atallah said.

Dagher believes a reform-driven government is crucial for rebuilding trust with the Lebanese people and the international community. "To unlock international funding, Lebanon urgently needs to elect a reform-minded president and prime minister committed to transparency and accountability," she said.

Will the ceasefire hold?

However, reconstruction and reforms are tightly linked to a lasting ceasefire. The Lebanese remain cautious, living in the present, as the situation could unravel at any moment.

A source from UNIFIL told CNN Israel breached the ceasefire agreement about 100 times since the truce went into effect, while Hezbollah has responded with rocket attacks.

Rose Bechara thinks that plans for the future cannot be made yet as it's unclear if the ceasefire will hold. "We can't say anything until we have a clear vision of the situation. No one is ready to continue the war, but we don't feel safe enough to return yet," she said.

And beekeeper Bassam Khawand hopes that the ceasefire will last, "We have enough damage, but we have a neighbor that it's not easy to work with."

Edited by: Uwe Hessler

"It breaks my heart! You can't treat people this way. We've worked so hard for Thyssenkrupp," said Helmut Renk, the 62-year-old works council chairman of the steelmaker's facility in Kreuztal-Eichen, Germany. 

Venting his anger and frustration about the plant's likely closure, he added that he's been working there for 40 years — just like his father before and his son now.

Renk's hard feelings are currently shared by many employees of the German steel giant, argues trade union official Ulrike Hölter. Representing the central Ruhr Valley branch of the IG Metall metalworkers' union, Hölter said the steelworkers are especially angry with management and anxious about their own future.

The imminent dismissal of the 500 steelworkers in Kreuztal-Eichen, she is convinced, will not only reverberate in the small town in western Germany but will be felt throughout the entire country.

What is Thyssenkrupp planning?

In late November, Thyssenkrupp Steel Europe (TKSE), said it would eliminate 11,000 jobs in total — 5,000 of which would be axed by 2030 and another 6,000 shed through spin-offs or divestitures. The job cuts amount to about 40% of its total German workforce of 27,000.

The Kreuztal-Eichen plant, which specializes in processing steel, is slated for complete closure.

TKSE also announced it will reduce its overall steel production capacity from 11.5 million tons to just under 9 million tons by divesting its stake in Hüttenwerke Krupp Mannesmann (HKM) in Duisburg, Germany.

However, if that sale is not achievable, TKSE has said it would discuss closure scenarios with other shareholders. Additionally, a plant in Bochum is now set to shut down by 2027 — three years earlier than previously planned.

"Urgent measures are required to improve Thyssenkrupp Steel's own productivity and operating efficiency and to achieve a competitive cost level," the company said in a statement.

The goal is to reduce personnel costs by some 10% on average in the coming years. 

Why is Thyssenkrupp struggling?

TKSE, which is the steelmaking unit of the Thyssenkrupp industrial conglomerate, is the largest steel producer in Germany. The company faces increasing overcapacity and intense competition from cheaper steel imports from Asia. Additionally, Germany's all-important automotive industry is struggling amid a transition to electric vehicles, which has led to reduced demand for steel.

Moreover, the current government of Chancellor Olaf Scholz has attempted the make steel production in Germany less polluting, singling out TKSE as a landmark project for the world's first hydrogen-powered blast furnaces in Duisburg. However, it remains unclear if the billions in state subsidies for so-called green steel produced without carbon emissions will ever pay off.

Plus in August, several members of TKSE's supervisory board resigned, accusing the leadership of failing to invest adequately in the steel division to maintain its competitiveness.

Gerhard Bosch from the University of Duisburg-Essen also blames "insufficient investment" for part of the crisis. "Thyssenkrupp Steel has quality and investment issues resulting from poor business decisions," he told DW.

In the throes of change

Gerhard Bosch, who is a former member of Thyssenkrupp's supervisory board, said he thinks the company's crisis is likely to spill over into countless jobs beyond its own workforce as every steelmaking job "typically supports at least one other job" along the supply chain in Germany.

The Ruhr Valley region was once Germany's industrial heartland with numerous coal mines and steel mills centered around the towns of Duisburg and Essen. After the last coal mine closed in 2018, an era came to an end leaving deep scars and the region economically depressed.

Unemployment there is still higher than in the rest of Germany, said Gerhard Bosch, and the loss of the steel jobs "will hit Duisburg especially hard."

However, the German steel industry is not the only industrial sector currently hit by massive disruption. Many more companies are planning to slash jobs, including automakers Volkswagen and Ford, and technology giant Bosch.

As Germany's export-driven economy is experiencing reduced demand for its products on a global scale, it is expected to shrink for the second consecutive year, according to numerous forecasts.

Defiant labor unions vow to fight back

Meanwhile, German labor unions, especially the powerful IG Metall metalworkers' union, are gearing up for a long battle to save threatened jobs.

Frank Patzelt, a rolling mill worker and union member at TKSE in Bochum, said that while some colleagues feel hopeless, many are ready to fight.

"If we stick together, we can push for a better outcome for ourselves," he told DW.

This article was originally written in German.

When Stefan Schreiber decided to invest in a carbon emission reduction project with a Chinese company, he was convinced he was dealing with a trustworthy business partner. "They made a very professional impression: the way they presented themselves, the way they communicated," he said. 

DW met Schreiber in a meeting room at his company's plant in Schwedt, a town near Berlin. The office overlooked huge pipes and tanks, and trucks trundled past. Schreiber is a board member of Verbio, a German biofuel producer that also trades carbon certificates. 

In essence, carbon credits are generated by projects that save or remove greenhouse gas emissions. To fulfill their climate targets, companies can either reduce emissions in their own production or activities — or buy these credits from others. These carbon credits can then be resold to other companies. 

A risk-free deal?

In 2023, Verbio acquired the rights to carbon credits from an oilfield in China. It had been approved as a carbon-saving project by German authorities.  All Verbio's management had to do was sign a contract and transfer the money for the carbon credits. 

Then Verbio resold the credits on the German carbon market. 

A risk-free deal, Schreiber thought. Except that, it turned out to be too good to be true. Today, Schreiber is convinced that the project his company paid for was part of a billion-euro fraud. 

Together with German public broadcaster ZDF, DW's investigative unit dug into this alleged fraud, sifted through hundreds of auditing reports, compared satellite images and talked to industry insiders. 

What we found was likely a criminal plot that has generated carbon credits worth roughly €1 billion ($1.05 billion) since its implementation in 2020 until it was shut down this year. Dozens of projects in China were approved in Germany, although they did not meet the legal requirements of a specialized carbon scheme set up for the fossil fuel industry. 

Tailor-made for the oil industry

While projects could be set up in nearly any country in the world, the carbon credits were issued by the German Environment Agency and could only be used to meet the climate targets of oil companies in Germany.  

Many of the industry's big players, we found, invested in the credits, including Shell , Exxon, Total and BP. But Verbio's Schreiber was the only investor willing to talk to us. 

The project Schreiber purchased credits from was supposed to save more than 120.000 tons of carbon by collecting gas from an oil extraction site in China's Xinjiang Region. The gas would have otherwise been released into the atmosphere or flared – both of which are a major contributor to global warming.

That's why extraction — and not just consumption — of fossil fuels is a major source of carbon emissions. The German government designed its carbon scheme to incentivize companies needing to reduce their emissions to channel funds to projects abroad to help them invest in carbon-saving facilities or processes. 

Only new projects were eligible for the scheme. 

'Should never have been approved'

But, DW and ZDF found that preexisting projects were, in fact, approved. Such was the case with Verbio's project. 

According to the documents submitted to the German authorities, construction started in September 2020. Satellite images of the site, however, clearly show that the facility had already been built in 2019, including the huge gas tanks referenced as new in the reports. 

"This project should never have been approved," said Axel Michaelowa, a leading expert in carbon trading at the University of Zurich.   

And yet, it was. By officials who never actually visited the site: The German Environment Agency, which issues the credits, does not inspect them. 

"We have three employees who deal with these projects," Dirk Messner, the agency's president, told us.  He said those employees don't have the capacity to review all the projects.

Instead, the work is outsourced to private auditing companies. The approval is based on the paperwork provided by these companies. It's a relatively common procedure in carbon certification. But this time, it provided the opportunity for a billion-euro fraud.  

In total, the German Environment Agency approved 66 projects in China. Project documents obtained by DW allowed us to identify at least 16 projects that were, in all likelihood, fraudulent. 

Almost all of them followed a similar pattern: An existing installation was submitted as if it were new. 

At first glance, they all seem to have been submitted by different companies. But, we found that almost all seem to have close links to one company: Beijing Karbon.

That company is a consultancy specializing in carbon reduction and certification. According to its website, it provides services to businesses that want to reduce their carbon footprint and helps Chinese firms invest abroad. 

An opaque company network

Its founder held influential positions within the energy sector: In the 1990s, she was in charge of energy conservation at China's National Development and Reform Commission, a powerful government commission that steers economic policies. Later, she held a leading position in a state-owned enterprise that invests in energy conservation before going on to set up her own business together with her son and others. 

We cannot say which, if any, role her previous positions may have played in setting up and expanding her company. 

Back in his office in Schwedt, Schreiber had no reason to doubt his new partners. The documentation he received "looked wonderful."

After learning of the fraud allegations, he thinks the Chinese company must have had collaborators. "There must have been people in Germany who knew this system inside out," he said. "Otherwise, it would not have been possible in this form, also with this level of professionalism."

Allegations of collusion

Many within the industry think these collaborators may have been two prestigious auditing companies. A letter by insiders of the Chinese carbon market sent to Germany's Environment Agency accused the projects' auditors of having "colluded with Beijing Karbon." 

Just two companies audited the majority of the projects: Müller-BBM Cert and Verico SCE, two specialized environmental certification companies. 

Verico's executive chairman is considered by many to be a leading expert in the world of carbon certification. For more than a decade, he represented auditing companies to UN bodies.

A third company, TÜV Rheinland, audited two likely fraudulent projects.

The fact that so many projects seemed to come from Beijing Karbon and were almost all audited by the same auditing companies "should have immediately set off alarm bells," Michaelowa said.

All three companies were recently searched by the Berlin prosecutor's office and are being investigated for joint commercial fraud, as a spokesperson of the office told DW and ZDF. None of the companies have admitted to any intentional wrongdoing.

"We have no reason to doubt our auditing work, nor the work of our auditors," Verico SCE replied to our request for comment.

Müller-BBM Cert said it was sure that "no criminal offense has been committed by employees of our company." 

TÜV Rheinland said it was investigating and asked for "understanding that we will share the investigation results with the authorities first and only then with the public." 

'Worst case scenario'

The allegations of fraud against these well-known auditing companies have shaken up the industry.

"If it turns out that the auditors were part of that fraud, this would be the worst-case scenario," Dirk Messner, the Environment Agency's president, told DW.

His agency has placed 45 projects under suspicion, closed the program to new applications and is working to rescind as many of the credits as possible. 

Beijing Karbon did not reply to our requests for comment.

Editing: Naomi Conrad and Carolyn Thompson

Fact-Checking: Carolyn Thompson

Legal support: Florian Wagenknecht

Yuchen Li contributed research to this story

On a cold December evening, scores of Christmas market revelers, bundled up in coats, scarves and hats, are crowding around a stall that reflects Cologne's landmark cathedral in its glass panels. A sweet aroma fills the air and people are speaking German, French, English and Dutch. Behind the counter, cashews and dried fruits are piled high.

Most visitors' eyes, however, are drawn to the centerpiece of the display: stacks of handcrafted milk chocolate bars that have been hand-painted green and are known as "Dubai chocolate."

Initially a social media phenomenon, the crunchy delicacy has now made its way to traditional German Christmas markets like the one in Cologne.

The stall is run by Kischmisch Manufaktur, a local delicatessen. Its founder, Nasratullah Kushkaki, says Dubai chocolate is currently his top seller, and often sells out despite a price of €7.50 ($7.96) for 100 grams.

Kushkaki isn't the only one capitalizing on the viral trend, with Christmas market vendors all over Germany now featuring tasty inventions like Dubai chocolate crepes, hot Dubai chocolate and Dubai chocolate waffles. But can just anyone use the term "Dubai chocolate" for their products?

Originating in the Middle East

As the name suggests, Dubai chocolate likely originated in Dubai, in the United Arab Emirates (UAE). Sarah Hamouda, the founder of Dubai-based Fix Dessert Chocolatier and a social media influencer, is credited as its creator. The entrepreneur shared on Instagram that it all began with her cravings during pregnancy.

Her husband was unable to find the perfect dessert for her in Dubai, so she invented one herself: crisp chocolate filled with pistachio cream and crunchy kadayif pastry threads. Soon, the treat went viral on TikTok.

Is the name protected?

Nearly anyone can recreate this trendy chocolate treat, but can they call it Dubai chocolate?

Origin-based product names can be protected globally as a trademark. For instance, the term Champagne is reserved for sparkling wine from France's Champagne region.

The Geneva Act of the Lisbon Agreement is an international treaty involving 30 countries, including EU states, that basically protects products based on the geographical name of a country, region or locality where a product is made.

But as patent attorney Rüdiger Bals explained, this protection applies only to countries that are part of the treaty — and the UAE is not a member. That means they cannot protect the term Dubai chocolate under this agreement, he told DW.

Still, bilateral agreements between countries could secure protection. The UAE could "theoretically register Dubai chocolate as a geographic indication within its jurisdiction," Germany's Patent and Trademark Office told DW in a statement, and then apply for protection in the EU.

A popular brand name

Bakeries, patisseries, influencers and even large chocolate manufacturers like Swiss company Lindt, meanwhile, are embracing the trend and selling their own products under the name Dubai chocolate.

In Germany alone, there are 19 active trademark applications for sweets with Dubai in their name, according to the patent office. Across Europe, there were more than 30 such applications as of December 4, 2024.

However Bals doubts these applications will be successful because "trademark law examines whether a term is distinctive, and the term Dubai chocolate as such likely lacks sufficient uniqueness," he said.

Dubai chocolate has become a generic term for pistachio cream-filled chocolate with kadayif, similar to the term chocolate Santa Claus, which also cannot be trademarked because it is widely understood as a general term for a chocolate figure shaped like Santa Claus.

Bals also thinks that simply adding a manufacturer's name is unlikely to provide enough distinction.

Some manufacturers have tried to register variations, for example the German YouTuber Kiki Aweimer with the name "Kiki's Dubai Chocolate." But since Aweimer's chocolate is likely not different enough from the Dubai chocolate of other manufacturers, the product will probably not be able to establish itself as a brand.

According to Bals, using the term Dubai chocolate could, moreover, create "issues of misleading representation," as trademark laws reject terms that "imply a false geographic connection." That means calling a product Dubai chocolate may be misleading if no ingredients — like chocolate or pistachios — are actually sourced from Dubai.

Creator silent despite global craze

The original creator, Sarah Hamouda and her company Fix Dessert Chocolatier, could theoretically register the term Dubai chocolate as a trademark in Germany or the EU. DW reached out to the company about potential plans for protection, but received no response by the time of writing.

Despite the unresolved trademark issues, one thing is certain: this year, countless Dubai chocolate bars will be enjoyed worldwide.

For Nasratullah Kushkaki, the chocolate frenzy is a delight that came at the right moment. As the sun sets over the Christmas market in Cologne, more people are lining up at his stall eager for a little chocolate luxury.

This article was originally written in German.

How was Syria's economy ravaged by the civil war?

Syria's economy was worth $67.5 billion (€63.9 billion) in 2011 — the same year that large-scale protests broke out against President Bashar Assad's regime, which sparked a rebel insurgency that escalated into a full-blown civil war. The country was placed 68th among 196 countries in global GDP rankings, comparable to Paraguay and Slovenia.

By last year, the economy had fallen to 129 in the league table, having shrunk by 85% to just $9 billion, according to World Bank estimates. That put the country on par with the likes of Chad and the Palestinian Territories.

Almost 14 years of conflict, international sanctions and the exodus of 4.82 million people  — more than a fifth of the country's population — has taken its toll on what was already one of the poorest nations in the Middle East.

A further 7 million Syrians, more than 30% of the population, remain internally displaced as of December, according to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA).

The conflict has devastated the country's infrastructure, causing lasting damage to electricity, transportation and health systems. Several cities, including Aleppo, Raqqa and Homs, have seen widespread destruction.

The conflict caused a significant devaluation in the Syrian pound, which led to a huge fall in purchasing power.

Last year, the country witnessed hyperinflation — very high and accelerating inflation, the Syrian Center for Policy Research (SCPR) said in a report published in June. The consumer price index (CPI) doubled compared to the previous year.

SCPR said more than half of Syrians were living in abject poverty, unable to secure basic food needs.

The two main pillars of the Syrian economy — oil and agriculture — were decimated by the war. Although tiny compared to other Middle East countries, Syria's oil exports accounted for about a quarter of government revenue in 2010. Food production contributed a similar amount to GDP.

Assad's regime lost control of most of its oil fields to rebel groups, including the self-declared Islamic State (IS) and later Kurdish-led forces.

International sanctions, meanwhile, severely restricted the government's ability to export oil. With oil output reduced to less than an estimated 9,000 barrels per day in regime-controlled areas last year, the country became heavily reliant on imports from Iran.

How quickly can Syria's economy be rebuilt?

Some Syria watchers have warned that it could take nearly 10 years for the country to return to its 2011 GDP level and two decades to be fully rebuilt. They are also concerned that Syria's prospects could worsen in the event of any further political instability.

Before the enormous task of rebuilding damaged cities, infrastructure, oil and agricultural sectors can get underway, more clarity is needed on Syria's incoming administration. 

Hayat Tahrir al-Sham (HTS), a former al-Qaeda-linked group that led the capture of Syria's capital Damascus at the weekend, says it is now working to form a new government. 

However, strict international sanctions on Syria remain in place. HTS is also under international sanctions as part of its designation by the United States and the United Nations as a terrorist organization. Western and Arab nations are concerned that the group may now seek to replace Assad's regime with a hardline Islamist government.

There have been immediate calls for those sanctions to be lifted or eased, but it could take several weeks or months.

Delaney Simon, senior analyst at the International Crisis Group, wrote Monday on X, formerly Twitter, that Syria is "one of the most heavily sanctioned countries in the world," adding that leaving those curbs in place would be like "pulling the rug out from Syria just as it tries to stand."

Without a move to ease those curbs, investors will continue to avoid the war-ravaged nation and aid agencies could be wary of stepping in to provide vital humanitarian relief to the Syrian population.

On Sunday night, US President Joe Biden warned that Syria faced a period of "risk and uncertainty" and that the United States would help where it can.

"We will engage with all Syrian groups, including within the process led by the United Nations, to establish a transition away from the Assad regime toward independent, sovereign" Syria "with a new constitution," he said.

US President-elect Donald Trump, meanwhile, said on this Truth Social network Sunday that Washington should "not get involved."

The Associated Press reported Monday that the Biden administration was weighing whether to delist HTS as a terrorist group, citing two senior White House officials. One of the officials said that HTS would be an "important component" in Syria's near-term future.

European Union spokesman Anouar El Anouni said Monday that Brussels was "not currently engaging with HTS or its leaders full stop" and that the bloc would "assess not just their words but also their actions."

Another priority in Syria's reconstruction is the eastern Deir el-Zour governorate, which holds around 40% of Syria's oil reserves and several gas fields. This province is currently under the control of the US-backed Syrian Democratic Forces (SDF). 

What will happen immediately?

HTS leader Mohammed al-Jolani met overnight into Monday with Assad's former prime minister and vice president to discuss arrangements for a "transfer of power," according to a statement from the group.

After a nationwide curfew was ordered, most stores across Syria remained shut on Monday, but Reuters news agency cited a Syrian central bank source and two commercial bankers as saying that banks would reopen on Tuesday and staff had been asked to return to offices. Syria's currency would continue to be used, the sources said.

The oil ministry called on all employees in the sector to return to their workplaces starting on Tuesday, adding that protection would be provided to ensure their safety.

UN aid chief Tom Fletcher wrote Sunday on X that his agency would "respond wherever, whenever, [and] however we can, to support people in need, including reception centers — food, water, fuel, tents, blankets."

As several European countries said they would pause asylum claims for Syrian nationals, the UN refugee agency, UNHCR, called for "patience and vigilance" on the issue of returning refugees.

Austria went further than most EU states, saying it was preparing an "orderly repatriation and deportation program" for Syrians.

Edited by: Uwe Hessler

When it comes to searching the internet, there's little that Europeans can do without America.

When Europeans go looking for information, 90% of them rely on US tech giant Google to find what they're after. Around 5% use Microsoft's Bing. 

Even if they choose a web browser based in Europe, it's most likely using Google or Bing's infrastructure, meaning requests are sent to the US companies and their rankings are displayed.

As Christian Kroll, CEO of Germany's largest search engine, Ecosia, puts it, "if the US turned off access to search results tomorrow, we would have to go back to phone books." In such a scenario, Europe would grind to a halt.

A search index for Europe

While a cutoff is unlikely, American companies have been making access to their search infrastructure more expensive, online enterprise technology news publication The Register has reported. There is nervousness around what a second term for President Donald Trump might mean for Europe's tech sector.

For two European search companies, the solution is to build a rival.

Earlier in November, Ecosia and French counterpart Qwant announced they are joining forces to create a European web index, essentially a huge database of webpages they can use to answer search queries.

"With the US election turning out as it has, I think there is an increased fear that the future US president will do things that we as Europeans don't like very much," Kroll told DW. "We, as a European community, just need to make sure that nobody can blackmail us."

Ecosia and Qwant are set to launch their project, called European Search Perspective (EUSP), for the French market at the beginning of 2025, with Germany following later in the year. Depending on investors, other language markets will follow.

EU's quest for digital sovereignty 

The idea ties into a popular trend in European politics: digital sovereignty. Pushed in particular by France's Thierry Breton, the EU's former commissioner for the internal market, the argument is that the EU requires control over key digital infrastructure and services to reduce its reliance other global powers.

Kenneth Propp thinks the "flavor of it is more in the nature of autonomy." The senior fellow at the Atlantic Council's Europe Center and professor of EU law told DW that "there should be a European option" in some areas currently dominated by US providers.

"That is how I understand this latest business venture, and obviously it points to the possibility that there will be tenser relations between the US and the EU under a Trump administration, so they're trying to identify having a European option as a market advantage," he said.

Right time to take on Google? 

Even with a favorable political landscape, trying to find space next to a behemoth like Google is extremely difficult. But recent events might make the task a little easier. 

The EU's Digital Markets Act, which has largely been in force since mid-2023, ensures that end users such as Ecosia and Qwant have access to the US companies' data, which is vital for improving their own algorithms. 

Google's parent company, Alphabet, is also facing a legal battle to keep its search business together. In August, a US federal judge found Google had been illegally monopolizing the search market and the US Department of Justice proposed it should sell off its own web browser Chrome as a remedy. Doing so could be hugely damaging to the company's profits and significantly affect its dominance.

Then there is the increasing integration of artificial intelligence (AI) into search engines, introducing other new players like OpenAI into the market. This new wave of search technology is set to be the biggest disruption in over two decades. 

"Search engines are going through an evolution. No one knows yet what this will look like, but it will be different from what we have now," said Kroll. "Maybe we can also use this opportunity to create something new that makes us […] really the best product you can have in the market." 

Kroll expects the Ecosia database to be useful to other companies looking to train so-called large language models (LLMs) in Europe.

Is Europe an attractive market?

However, succeeding in the tech sector is difficult in Europe. US companies typically have much easier access to investors' cash. While Kroll won't be drawn on how much Ecosia and Qwant are expecting to spend, they are still on the lookout for partners.

Propp also highlighted the different approach taken on regulation, where the US is often less stringent. "The view in Europe, particularly from the [European] Commission, is that you establish a comprehensive regulatory base, as has been done on privacy and artificial intelligence," he said. "That becomes a competitive advantage for European companies."

Although the tech sector in Europe had grown so far in general, he added, in reality it has not generated strong competitors to US companies.

Results to be more relevant to Europeans

For now, the sights aren't set on toppling any US companies. Kroll thinks Ecosia and Qwant could be aiming for between 5-10% market share in Europe by 2030.

While the figure might sound low, it would still represent a huge volume of search results, which in turn will be used to improve the algorithm. 

The main difference, he noted, is that results should be more relevant to Europeans, providing examples such as more prevalence for European news outlets or more eco-friendly travel options.

"We won't paint this in European colors or anything like that. But, for example, if someone is looking for a trip from Berlin to Paris, we could highlight train connections instead of flight connections," he said.

If that's what Europeans are in fact searching for, it could prove a step away from US tech dominance.

Edited by: Uwe Hessler

Correction, December 6, 2024: An earlier version of this article misspelled the name of Kenneth Propp. DW apologizes for the error.

When Prime Minister Michel Barnier unveiled his deficit-reduction plan in October, promising to bring down the public deficit from around 6% of GDP to 3% in 2029, it was seen as an attempt to steer the French economy into calmer waters. 

But on Wednesday, France's parliament rejected his proposal by voting to oust Barnier's government, upending his hopes of avoiding an economic storm. 

For the first time in over 60 years, the National Assembly approved a no-confidence motion, proposed by the hard left and crucially backed by the far right headed by Marine Le Pen.

Lawmakers were reacting to Barnier's decision to link a vote on a part of the 2025 budget — a first step to get the deficit on track to comply with the European Union's fiscal rules — to a special constitutional vehicle, which only allows for bills to be stopped through a motion of censure.

On Thursday, Barnier submitted his resignation, but said he would stay on until a new government is formed.

Before this week's commotion, the prime minister lacked a majority in parliament and headed a coalition government comprising President Emmanuel Macron's Renaissance party and the conservative Republicans after snap parliamentary elections in July. Macron called those elections after his party came second in June's EU parliamentary elections, receiving less than half as many votes as the far-right National Rally.

What seemed to be Barnier's only way of getting the budget through parliament has now backfired.

Underlying weakness of the French economy

The latest crisis comes at a time when some of the economic indicators have been relatively stable. French GDP is predicted to grow by 1.1% this year while Germany's GDP is expected to shrink by 0.2%. Unemployment stands at 7.4%, which is relatively low for France. Inflation has gone down to about 2% from 5% a couple of years ago.

However, for Denis Ferrand, head of Paris-based economic research institute Rexecode, these relatively good figures can't hide that the French economy has weakened over the past few years.

"French and European companies have become less competitive with Chinese ones, as our production costs have risen by 25% since 2019. They only went up by 3% in China over the same period," he told DW.

Ferrand puts that down to years of high inflation, rising interest rates, and soaring energy prices, especially after Russia invaded Ukraine in February 2022, which he said had led to "a lot of caution."

"We do a quarterly survey amongst bosses of 1,000 French small and medium-sized companies about their investment behavior and, in October, only 36% of them were planning to maintain their investments with 45% saying they'd postpone them and 18% wanting to cancel them," Ferrand said.

"That trend started to emerge at the beginning of the year, but it really gained traction after July's snap parliamentary elections," he added.

A mid-November survey by UK consultancy Ernest & Young (EY) among 200 international company bosses yielded similar results: roughly half of those questioned had downsized or postponed their investment projects. France has been top of EY's investment attractiveness survey in Europe since 2019.

The number of bankruptcies is on the rise

Philippe Druon, a bankruptcy and restructuring lawyer at Paris-based law office Hogan Lovells, confirms that investors are cautious.

"It's very difficult to find buyers for companies that have gone into administration. I currently manage 60 such cases, which is a lot," he told DW, adding that the number of bankruptcies was as high as it was during the 2008 financial crisis.

About 65,000 companies are expected to file for insolvency this year compared to 56,000 last year.

Druon thinks the rise is only partly down to a catch-up effect.

"Many companies now have to pay back loans that the government handed out during the COVID-19 epidemic, but there are also structural reasons such as the transition to electric cars and the fact that there's less demand for office space as many employees now choose to work from home," he said.

"What's more, interest rates on the capital market have been relatively high which makes investing in companies less appealing," he added.

Could France slide into a financial crisis?

And yet, Anne-Sophie Alsif, chief economist at Paris-based consultancy BDO, says these factors on their own wouldn't make for a dramatic economic situation. The political factor, however, does.

"Our macroeconomic figures were about to improve, but if the government falls now and no tailor-made 2025 budget gets voted through parliament, we'll be sliding into an economic crisis. It would be catastrophic," she told DW ahead of the vote.

"We would signal to investors that our country is incapable of implementing a deficit-reduction plan," Alsif stressed.

If the government gets voted out, she said, the 2024 budget will likely be replicated in 2025. "But that was the budget that increased our deficit to over 6%."

"Macron's decision to dissolve Parliament was a monumental mistake. We are now forced to govern our country through coalitions, but we're incapable of that and thus facing an extremely unstable political situation," she added.

Still some investor confidence

Christopher Dembik, an investment advisor at the Paris subsidiary of Swiss-based Pictet Asset Management, has a different view of the situation.

"It's exaggerated to say France is on the brink of a financial crisis. That would mean the country wouldn't be able to refinance its debt, like Greece in 2009, and markets aren't indicating that right now," he told DW.

"Managers of US investment funds have been telling me that they've already taken into account France's political risk in their calculations and France's current spread — the gap in interest rates for 10-year government bonds compared to those issued by Germany — amounts to 0.8 percentage points which is more than acceptable," Dembik said.

France currently pays interest rates of about 3% on these bonds.

Nonetheless, France recently paid a higher rate than Greece for the first time. And up until July's snap elections, the spread only stood at 0.5 percentage points.

As a result, Ferrand fears that France might not be able to avoid a financial crisis.

"Paris has always relied on the fact that it's too big to fail for other European countries," he said. "But people in Brussels are starting to lose patience with our apparent incapacity to bring down public debt."

Edited by: Nik Martin

Editor's note. This article was first published on December 3, 2024, and was updated on December 4 and 5 to reflect the result of the vote in the National Assembly that ousted Barnier's government and his subsequent resignation.

On Tuesday, China's Commerce Ministry announced that it was banning the export of certain minerals and metals to the United States.

The products, such as gallium, germanium and antimony, are so-called dual-use items, which can be used in the production of semiconductors and also for a wide range of military and technological applications.

Why has China taken this step?

China's move is a direct response to export controls that the United States placed on Beijing on Monday. The US and Chinese actions are the latest exchanges in the countries' rivalry, with much of the recent focus being around trade, the production of military technology and the development of artificial intelligence.

"It's a hardening and a defensiveness on both the Chinese and the United States side, and it's not a new phenomenon for either country," Claire Reade, a senior counsel with Washington, DC, legal firm Arnold & Porter and an expert in US-China trade relations, told DW.

Reade said the perception had become widespread in China that the United States is trying to halt the country's legitimate development, whereas the US sees it as a national security issue to prevent China from gaining supremacy in certain areas. 

The Commerce Ministry said its decision to strengthen export controls on dual-use items to the United States was "to safeguard national security."

The US continued its ongoing campaign against China's semiconductor sector by announcing its third list of restrictions in as many years.

Just over a month before it is set to leave office, the Biden administration launched export controls on 140 companies, including chip sector specialists such as Naura, Piotech, ACM Research and SiCarrier Technology.

US Commerce Secretary Gina Raimondo said: "They're the strongest controls ever enacted by the US to degrade the People's Republic of China's ability to make the most advanced chips that they're using in their military modernization."

China's response is not limited to the restriction on certain key metals and minerals. Four of the country's main industry associations — covering the semiconductor, internet, car and communications sectors — have told their members to reduce their purchases of US chips, with the country's semiconductor association saying "US chip products are no longer safe or reliable."

How will the new restrictions affect the US?

The US National Security Council says it is still assessing the latest move from China. Officials "underscore the importance of strengthening our efforts with other countries to de-risk and diversify critical supply chains away from the People's Republic of China."

Gallium and germanium are two of the products that China has banned from export to the United States, having already placed controls on their export in 2023.

They have many specialty applications, with gallium particularly needed for high-end semiconductors, as well as for solar panels and radar equipment. Germanium has several uses, including for fiber optics and satellites.

The Center for Strategic and International Studies, a US think tank, says "gallium-based semiconductors are vital to the US defense industry, particularly in next-generation missile defense and radar systems, as well as electronic warfare and communications equipment."

According to the US Geological Survey, a government agency, China produced 98% of the world's supply of raw gallium in 2023. Data for germanium extraction and production is not readily available but China also controls the majority of global supply.

 

The US imports both products from China but also trades with countries such as Canada, Germany and Japan. However, since China began phasing in restrictions last year, prices have increased markedly on the global market.

The risks of supply disruption are well-known. In November 2024, the US Geological Survey said there could be a $3.4 billion (€3.23 billion) decrease in US GDP if China implements a total ban on exports of gallium and germanium.

China's dominance does not mean that the United States does not have other options. First, there are other producers, and, second, it is possible to increase non-Chinese production. Gallium is largely derived as a byproduct of bauxite processing, the primary ore for aluminum. While investing in gallium extraction in the US and other countries would be costly, it is possible.

What does China hope to achieve?

The latest developments come just over a month before the start of Donald Trump's second term as US president. Trump has vowed to put massive tariffs on Chinese imports, having begun a trade war with Beijing during his first term.

Though the possibility of future negotiations with Trump has probably fed into China's decision-making, Reade said,  "it definitely is a broader trend that goes beyond any given president."

Reade said the decision suggested that China is becoming more assertive in its efforts to shake off any dependence it has on the West.

"This will be another step along the road where China hopes that it will not harm China, and it will send messages to the rest of the world about China's unwillingness to sit by if its economic development and its national security — which is a very broad term in China — is somehow being compromised or threatened," she said.

Edited by: Ashutosh Pandey

In April 2024, hundreds of police officers raided homes and offices in 11 countries and arrested several individuals linked to JuicyFields, a company initially based in Berlin.

JuicyFields had promised huge returns to those willing to invest in medical cannabis through its website. Almost 200,000 people did so and became victims of a scam. Prosecutors estimate the damage to be around €645 million ($678 million).

DW's Cannabis Cowboys podcast was early to investigate the scam and has received numerous awards since the final episode was published in March 2023.

A network of investigative journalists in several European countries has now further investigated the case. Their findings were published by Danish public broadcaster DR, Swedish newspaper Svenska Dagbladed, Austrian newspaper Der Standard, and in Germany by the magazine Der Spiegel, online publication Correctiv.org, and public TV station ZDF.

New findings raise more questions in JuicyFields case

The new research appears to confirm the story as told by DW. It also adds new findings that make the JuicyFields saga even stranger than it already was.

Journalist Kevin Shakir from DR, for example, managed to get in touch with the man suspected to be the mastermind behind JuicyFields. Sergej B., a Russian national, was arrested in April 2024 in the Dominican Republic and is set to be tried later in Spain.

According to Shakir's research, a network surrounding Sergej B. had set up two other major fraud cases before JuicyFields. One involved waste recycling, the other a cryptocurrency. Each time, a lot of people lost a lot of money. Shakir tells the story of Sergej B. in "The Phantom from Russia", a five-part podcast series in Danish.

"When you're able to launch such big projects with that much marketing, when you're able to disappear again and again from alleged scams, when you're able to move cryptocurrency in big amounts and sophisticated ways," Shakir told DW. "The question remains: is this guy [Sergej B.] acting alone or is he part of something bigger than himself?

Was the Russian state involved?

Gabriela Keller from the investigative online publication correctiv.org was intrigued by the same question. Many experts on Russia say scams on the scale of JuicyFields require political protection.

Keller said the investigation did not provide 100% proof that the Russian state was involved. But some of her findings suggest there is at least a connection.

For example, a Russian member of JuicyFields' inner circle, Vitaly M., was registered in Berlin under the same address as the official cultural embassy of the Russian state, an institution called the Russian House of Science and Culture.

"The fact that he was registered at the Russian House could indicate that he had helpers there," Keller told DW. "Because you either need a rental contract or a confirmation by the landlord when you register your address at the registration office."

The Russian House denied they had anything to do with Vitaly M. and said he must have forged papers or given false information at the residency registration office.

Back in April, Vitaly M. escaped arrest. He now lives in Russia, where he seems to run a company that manufactures drones, Keller told DW. "The website currently displays the coat of arms of the Russian Ministry of Defense, along with the slogan: 'Victory will be ours'." Keller's full report can be found here (in German).

A Swedish lawyer and his claims

Two investigative reporters at Svenska Dagbladet focused their investigation on a man who was never a member of JuicyFields, but whose name is closely linked to the case: Lars Olofsson, a Swedish lawyer.

After JuicyFields folded in the summer of 2022 and thousands of investors were left stranded, Olofsson announced that he could help victims get their money back.

Instead of waiting for the scammers behind JuicyFields to be convicted, Olofsson announced he would file class action lawsuits against all those who made the scam possible, including Facebook, where the company advertised, and banks that passed on investors' money to JuicyFields.

To become part of the class action suits, defrauded investors had to pay a fee to Olofsson. Initially, it was €100, later 150. Several thousand people signed up.

Frida Svensson and Erik Wisterberg have put Lars Olofsson under the microscope — with surprising results. They tell his story in a four-part podcast called "The Savior". The podcast is in Swedish and an online article about their findings is available in English.

"[Olofsson] markets himself as a super lawyer with 15 years of experience investigating international fraud and scams. He claims he's a former Navy Seal and that he worked in the Swedish military intelligence service," Wisterberg told DW. "But nothing of this is true."

"His real background involves serving time in prison for economic crimes. It also involves this year being put on trial again — which his clients didn't know about at all," Wisterberg added.

When will prosecutors file charges?

The Swedish journalists said they could prove their allegations with documents and that they had confronted Olofsson with their findings.

DW also reached out to Olofsson and asked him for comment. He replied but did not address any of the topics he was asked about. Instead, he wrote that journalists could not be trusted and said he got many new clients after "The Savior" podcast launched in Sweden.

In the podcast, Olofsson is portrayed as a soldier of fortune hoping to profit from a scam. He raked in considerable sums in sign-up fees from defrauded investors, while the legal proceedings he initiated concerning JuicyFields were rejected by Swedish courts.

Public prosecutors in Berlin, Madrid and elsewhere are currently evaluating the material confiscated during the raids in April 2024. They are yet to file charges.

Edited by: Nik Martin

Germany's benchmark blue-chip stock index topped 20,000 points for the first time during trading on Tuesday morning, hitting the historic mark shortly after opening.

The DAX, which is made up of 40 large publicly traded German corporations, has been hovering around the 19,000 mark recently but has surged towards 20,000 over the past week despite a continuing raft of grim data about the German economy overall.

The trend is a rare piece of positive news out of Europe's biggest economy as of late. Germany narrowly avoided recession for the third quarter of the year, but the latest data suggests a winter recession is inevitable in the new year. Added to that is bad news on the jobs front, with a wave of industrial job cuts recently announced at iconic firms such as Thyssenkrupp and Bosch.

Then there's the serious struggles at carmaker Volkswagen, where job losses and plant closures have been in the offing for months.

Infighting in the country's three-party ruling coalition over how to deal with the country's severe economic malaise led to the collapse of the government recently, with snap elections slated for February.

DAX has little exposure to Germany

Like elsewhere, Germany has been plagued by high inflation in recent years, leaving consumers strapped for cash. Industrial orders and production in the export nation have also fallen, and surveys show German companies are increasingly pessimistic about the future.

"Looking ahead, there is very little reason to expect any imminent change for the economy," Carsten Brzeski at ING Bank said last week. "In fact, the expected economic policies of the incoming US administration as well as continued policy uncertainty as a result of the German government’s collapse are likely to weigh on sentiment in Germany." 

So why the investor optimism?

"Ironically, I think there's a strong argument to make for an inverse correlation between economic performance and stock market performance," Ben Ritchie, head of developed market equities at investment company abrdn, told DW earlier this year, when the DAX also broke new ground despite weak overall economic data.

"The revenues for these companies aren't in Germany," Ritchie said. "So the German economy doesn't matter."

SMEs don't share the optimism

Retail customers and production sites for these large, international companies are primarily located outside of Germany. Experts such as Ritchie say the health of those markets, along with structural developments within specific industries and companies, has a far greater influence on DAX performance than the domestic economy does.

However many argue that this is not the case for small and medium-sized enterprises (SMEs) in Germany, which employ over 50% of the country's workforce but aren't represented in the DAX index.

As a result, their fortunes are much more tied to the domestic economy and its problems with rising costs and other structural challenges. 

It's one of the reasons why business morale fell more than expected in Germany according to a survey released on November 25 by the country's Ifo Institute. "The reading confirms that the German economy remains in the doldrums," Franziska Palmas, senior Europe economist at Capital Economics, said about the business sentiment figure.

Weak economy could be a strength for equities

The strength of the US economy is probably more significant to the DAX's current streak than Germany's. High coronavirus relief spending and low energy costs there have helped boost consumer spending over the past 18 months.

However that has not been mirrored in Germany where consumer spending remains moribund, despite a significant cooling of inflation.

Yet some experts have suggested a sluggish domestic economy could ultimately be a good thing for stocks.

For Germany's largest companies, a weak German economy can lead to a cheaper euro as well as lower borrowing costs as the ECB tries to stimulate spending in Europe — which it is currently trying to do with a series of interest rate cuts. At the same time, stagnation would have little impact on revenues due to their large overseas markets.

Edited by: Arthur Sullivan

Editor's note: The article, originally published on February 29, 2024, was updated on December 3, 2024 to reflect that the German DAX has breached the 20,000 mark.

Why does BRICS want to challenge the US dollar?

The BRICS nations — named after original members Brazil, Russia, India, China and South Africa — are among the fast-growing economies in the 21st century. They are keen to reduce their dependence on the US dollar, the world's reserve currency, used for nearly 80% of global trade.

Most economists agree that the dollar-dominated financial system gives the United States major economic advantages, including lower borrowing costs, the ability to sustain larger fiscal deficits and exchange-rate stability, among others. 

The dollar is the main currency used to price commodities like oil and gold, and its stability means investors often flock to the dollar during uncertain times.

Washington also benefits from enormous geopolitical influence from so-called dollarization, including the ability to impose sanctions on other nations and restrict their access to trade and capital.

BRICS nations, which expanded recently to include Iran, Egypt, Ethiopia, and the United Arab Emirates, have accused Washington of "weaponizing" the dollar, leveraging the currency so that rivals must operate within a framework defined by US interests.

Discussions about a new joint currency gained traction after the US and European Union imposed sanctions on Russia over its 2022 full-scale invasion of Ukraine, amid concerns other BRICS nations could be targeted if they fell out with the West.

How has the BRICS currency plan developed?

The creation of a BRICS currency was first mooted shortly after the 2008/9 financial crisis, when a US real estate boom and poor regulations nearly collapsed the entire global banking system.

At last year's BRICS summit in South Africa, the bloc agreed to study the possibility of creating a common currency to minimize exposure to dollar-related risks, although BRICS leaders noted it would likely take many years to come to fruition.

Russian President Vladimir Putin went further during the most recent BRICS summit in Kasan in October, proposing a blockchain-based international payments system, designed to circumvent Western sanctions.

There was little enthusiasm for Putin's plan, but BRICS leaders did agree to facilitate more trade in local currencies, cutting their reliance on the dollar.

Putin and his Brazilian counterpart Luiz Inacio Lula da Silva are the strongest proponents of the new currency. While China has not explicitly expressed a view, Beijing has supported initiatives to reduce reliance on the dollar. India, meanwhile, is a lot more cautious about the idea.

How feasible is a common currency?

A new joint currency would be a huge undertaking for BRICS nations, fraught with many complexities due to the differing political and economic systems within the nine current members. The BRICS states are at varied stages of economic development and have vastly different growth rates.

China, for example, is an authoritarian state but is responsible for about 70% of the bloc's total gross domestic product (GDP) at $17.8 trillion (€17 trillion). China runs a trade surplus and maintains a large holding of dollars to support its competitiveness as a major exporter. India, on the other hand, runs a trade deficit, is the world's largest democracy and its economy is worth $3.7 trillion.

China's dominance in BRICS would create a huge imbalance that would make it tricky for New Dehli to agree on a framework for the new currency that wouldn't overshadow its national interests. Disparities between other BRICS members are also likely to spur resistance to a shared currency.

It is also unlikely that the BRICS members want to eventually move towards a fully-traded currency like the dollar or euro. The euro took more than 40 years from 1959, when it was first mooted, till 2002 when its notes and coins became legal currency in 12 EU countries, later 20 states.

The most likely option would be the creation of a joint currency used purely for trade, valued based on a basket of currencies and/or commodities like gold or oil.

The BRICS currency could work in a similar way to the International Monetary Fund's (IMF) Special Drawing Rights (SDR). The SDR is an international financial asset, valued on the daily exchange rates of the dollar, euro, yuan, yen and pound. Some proponents have suggested a BRICS alternative could be a digital currency.

Is Trump's 100% tariff threat too premature?

Trump wrote on Truth Social Saturday that when he returns to the White House in January, he would "require a commitment" from BRICS countries that they "neither create a new BRICS Currency nor back any other Currency to replace the mighty US Dollar."

The President-elect could, however, be jumping the gun somewhat because the currency proposal has made little progress, despite the rhetoric from BRICS leaders.

Indeed on Monday (December 2), the South African government insisted there were no plans to create a BRICS currency, blaming "recent misreporting" for spreading a false narrative. Chrispin Phiri, spokesman for the country's Department of International Relations and Cooperation (DIRCO), said in a statement posted on X (formerly Twitter) that discussions have until now focused on boosting trade within the bloc using national currencies.

Trump's threat could now strain ties with the world's fastest-growing economies, which are some of the US's key trading partners. It could also spark the threat of retaliatory measures.

Added to Trump's existing threats to levy additional tariffs on America's rivals, including China, any move by his administration could further spike inflation both globally and domestically, potentially slowing economic growth.

The decision to prioritize the dollar also marks a policy shift from Trump's first term, where he favored a weakening of the currency to boost US exports. His threat caused a strengthening in the dollar on Monday, and a weakening of gold along with the yuan, rupee and rand.

Russian government spokesman Dmitry Peskov said a trend was gathering pace against the dollar as a reserve currency, saying that "more and more countries are switching to the use of national currencies in their trade and foreign economic activities."

Edited by: Uwe Hessler

They were just a trickle first, but then hundreds of workers at VW's factory in Hanover, Germany, came walking out of Gate 3 in large swaths, waving signs reading "We are ready for strike!" and the red flags of Germany's powerful metalworkers' union, IG Metall.

The Hanover plant is where VW produces light commercial vehicles, including VW's electric minibus, ID.Buzz, which is the successor to the company's iconic "Bulli" — short for bus and delivery van in German —  which had been rolling off the assembly line for more than 65 years, but is now produced in Turkey.

VW workers in Hanover are joining in a strike that is hitting almost all VW plants in Germany.

"For me the most important thing is that they keep this production site," says Hassan Savas, who's been working for VW for 24 years and is now joining in a crowd of workers rallying at the local market square. "They should abolish bonus payments. Oliver Blume made 10.3 million euros and what do we get?," he told DW.

What Hassan Savas is so angry about is a decision by VW's management, including CEO Oliver Blume, to close several VW plants in Germany and lay off thousands of workers. The move is unprecedented in the carmaker's more than 87 years of history, and comes after it had scrapped a job security agreement with labor unions earlier this year that had ruled out dismissals until 2029.

Moritz, a second-year apprentice at the plant who doesn't want to see his full name published, says a lot of VW workers are "really angry."

"Apprentices should get more money and should receive contracts after their training, but that‘s both at stake," he told DW.

Why are VW workers going on strike?

While workers at VW's factory in Osnabrück, Germany, have secured a seperate bargaining agreement and don't participate in the strike, the rest of VW's workforce in Germany is still hoping for a new deal.

In a recent round of wage negotitions, VW workers have offered  to back €1.5 billion ($1.6 billion) in cost savings if management rules out closing plants in Germany, but warned the automaker would face an historic battle if it pressed ahead with swingeing cuts.

VW management is pushing for wage cuts of up to 10% to lower costs in the wake of dwindling revenues. Europe's biggest carmaker also wants to close three plants to reflect falling demand, especially for its electric vehicles (EVs). 

The IG Metall union announced over the weekend that industrial action would get underway Monday with a series of "warning strikes," which are short walkouts, after the company had last week rejected the union's proposals for protecting jobs.

VW Group, which owns 10 brands from Audi and Porsche to Skoda and Seat, said in a statement it "respects workers' rights" and believes in "constructive dialogue" in a bid to reach "a lasting solution that is collectively supported." It also said that it had taken "measures to guarantee urgent deliveries" during the strike action.

Collective bargaining negotiations are said to resume on December 9th, with the workers rallying in Hanover saying the are supporting the labor union's calls for the "most massive strike action VW has ever seen."

Why is Germany's car industry so important?

The walkouts at VW come as Germany's all-powerful auto industry is facing a crisis amid declining European demand and tough competition from China. With the Wolfsburg-based auto manufacturer being Germany's biggest industrial employer, a crisis at VW has nationwide repercussions.

In 2023, nearly 780,000 people were employed in the German automobile industry, according to the German Association of the Automotive Industry, with more than 465,000 jobs supplying parts and equipment to the biggest carmakers, including VW, BMW and Mercedes.

The share of the automobile industry to Germany's gross domestic product (GDP) is bigger than in any other European country.

The slowdown in German auto production, meanwhile, has reached manufacturers beyond VW. Premium carmaker Mercedes, for example, is planning to cut costs of several billion euros. Tire maker Continental will be laying off 7,150 workers worldwide, and electronic-parts supplier Bosch plans to cut up to 5,550 jobs.

US auto giant Ford  also announced it would reduce its workforce in Germany by 2,900 workers, while 14,000 jobs are at risk at supplier ZF, and 4,700 at Schaeffler Group, another important auto-industry supplier.

Edited by: Uwe Hessler

Rising gas prices in recent weeks have brought back some bad memories for European energy traders — and governments.

Recollections are fresh of the problems that hit energy markets following Russia's invasion of Ukraine in 2022. As the continent scrambled to end its dependence on Russian gas, prices soared.

Apart from fueling already rampant inflation, it led to concerns around possible blackouts. Persistently high prices also led to problems for energy-intensive industries, leading to closures and job losses.

Europe ultimately made it through the last two winters, largely thanks to milder-than-expected weather enabling it to keep energy usage low. However, a cold start to November has contributed to a fresh surge in natural gas prices.

Prices spiked in November, hitting almost €49 ($51.6) per megawatt-hour (MWh) on November 21, the highest price in over a year.

Are fears justified?

The cold weather has led to more heating being used, and combined with low wind speeds in northern Europe and the resulting fall in renewable supply, gas is in higher demand.

However, prices remain way below the highs seen during 2022, particularly as overall demand for gas has fallen since then. The shock can also be partly explained by the fact that throughout 2024, prices have been far lower than at any time since the war began.

"Prices have risen by approximately 40% since mid-September," Petras Katinas, an energy analyst at the Centre for Research on Energy and Clean Air (CREA) , told DW. "So it's a pretty huge jump all of a sudden."

The prospect of a colder winter has led to fears that inventories — fully stocked until recently — could be depleted and fuel a cyclical surge in prices.

However, Katinas says Russia's grip on the European market has weakened greatly since 2022 and that talk of a "crisis" is overblown. "I wouldn't call it crisis, especially if we compare what actually happened in 2022 and 2023," he said. "The majority of the EU member states do not have huge dependency on Russian gas anymore."

But what about Russian gas?

But questions around Russian gas continue to influence the overall picture.

Russia is far from the behemoth it once was in terms of EU gas supply. The share of Russian pipeline gas imported by member states fell from 40% of the total in 2021, to about 9% in 2023. However, according to recent CREA data, a rise in Russian liquefied natural gas (LNG) into the bloc means it still accounts for 18% of the EU's total gas imports, an increase of almost 5% from 2023.

Ultimately, Russian pipeline gas deliveries to the bloc appear to be coming to the end. Austria, one of the last European countries still receiving pipeline gas from Russia, finally stopped receiving the hydrocarbon after a legal dispute with Gazprom, the state-owned Russian gas company.

While Slovakia and Hungary still receive Russian pipeline gas, all indications suggest the arrangement will run out at the end of 2024. The five-year gas transit deal involving Gazprom and Ukrainian state company Naftogaz for the transit of Russian gas across Ukrainian territory expires at the end of the year and Kyiv says it will not renew it.

Although the TurkStream pipeline will still supply Hungary, the end of flows via Ukraine will put pressure on central European countries to find an alternative supply.

Borys Dodonov, head of the Center for Energy and Climate Studies at the Kyiv School of Economics, expects the gas transit deal to end because, "Ukraine has no economic rationale to renew this contract."

In an interview with DW, Dodonov pointed to the possibility of some kind of alternative deal being done instead. "We cannot exclude any hidden agreements, or corruption," he said, and added that the EU itself could lobby to keep the gas flowing in order to avoid potential shortages in countries such as Slovakia and Hungary.

Remarkably, despite everything that has happened in the last three years, the EU remains Russia's biggest customer for both pipeline gas and LNG. In October, the EU bought 49% of all Russia's LNG exports and 40% of all its pipeline gas exports.

Could LNG ultimately solve the problem?

Since Russian pipeline gas to Europe was largely cut off in 2022, LNG has become more important for both parties. Russian LNG volumes into the bloc have increased by close to 15%  so far this year.

Dodonov insists that Europe does not need any Russian gas to meet its energy needs, including LNG, due to new LNG capacity coming from the US. He expects incoming US President Donald Trump to increase LNG output and thinks Europe could be primed for a major gas trade deal with the country.

Ed Cox, head of global LNG at independent commodity data provider ICIS, notes that LNG now accounts for 34% of Europe's total gas share since the invasion in 2022, double what it was prior. The pivot to LNG means Europe is now more vulnerable to global price pressures. "Europe is more connected to fundamentals in a global market than ever before," he told DW, even though overall European demand for gas had fallen by around 20% from the pre-invasion period due to high prices, warmer-than-expected weather and increased renewable capacity.

Cox believes that in the event of a cold winter and an end to the Ukraine transit deal, Europe will still be able to meet its gas needs with LNG. However it will come at the risk of much higher prices as supply won't be dramatically increased in the short term. "Europe will get enough LNG if it needs it. But it might mean that European prices have to go higher to compete with Asian demand."

Higher prices for gas to replenish stocks after the winter, he added, would have a knock-on effect heading for the winter of 2025 and beyond. "It's not about whether we have enough LNG or gas, it's really about the price implications."

Edited by: Uwe Hessler

It emerged this week that the German railway company Deutsche Bahn is sending empty trains running around Berlin. Citing "insiders," the Berlin daily newspaper Der Tagesspiegel reports that about "five or six ICE trains are driven through and around the city at night with no passengers on board."

The reason for this is the lack of railway sidings. Berlin is located in the far northeast of Germany, and many long-distance rail lines end in the German capital. Consequently, a lot of train journeys terminate there in the evening, and depart from there in the morning. However, there are simply not enough tracks where stationary trains can be parked.

The tracks in and around the city are busy, and some passenger trains still run at night. So Deutsche Bahn's high-speed ICEs are forced to keep moving, to whichever tracks are not in use at any given time. A DB spokesperson described this to Der Tagespiegel as "a completely normal operational procedure."

The newspaper reports that Deutsche Bahn abandoned plans to lay new sidings just to the south of Berlin after protests from local residents. It now plans to construct a similar facility in the northern district of Pankow.

Not enough tracks — or drivers

This aimless running of trains doesn't only waste electricity. The drivers who work at night, moving the empty trains out of the way, are then unavailable for regular passenger services during the day.

This exacerbates a long-standing problem: the shortage of skilled workers. According to Wirtschaftswoche business magazine, the German train drivers' union GDL estimates that there are 1,200 unfilled train driver positions across the country. This despite the fact that, according to the rail transport advocacy group Allianz pro Schiene, another 1,000 skilled workers are added to the workforce every year. Given that there are plans to shift more traffic to rail, in future an additional 5,000 train drivers will be needed annually — at least.

Digital arrival timetables

While it is finding it hard to extend the rail network and recruit skilled workers, Deutsche Bahn is keen to push ahead with digitalization.

At the end of November, the company announced that, from December 15, printed timetables of arrivals would no longer be displayed on platforms. Every station currently displays yellow departure schedules listing the departure times of trains from that station, as well as white arrival schedules that show the times trains are due to arrive.

The company explained the change as an effort to save paper and administrative costs, and said that QR codes would be displayed instead of printed schedules. These can provide real-time arrival information, it said, adding: "Travelers need reliable information in real time."

People on social media were quick to mock the announcement. "Makes sense, when trains arrive randomly, or not at all :D," wrote one user on X (formerly Twitter). Deutsche Bahn claims that its trains have been more punctual recently; nonetheless, more than one in three long-distance services still arrives late. A train is officially considered late if it arrives six minutes or more after the scheduled time. Delays of several hours are now increasingly common.

Responding to criticism

Before comedians and satirists were able to turn this into material for their extensive repertoire of German train jokes, Deutsche Bahn backpedaled. On Friday, the state-owned company issued an announcement: "Deutsche Bahn responds to criticism: Printed arrival timetables at stations will remain."

Critics had argued that not everyone who comes to collect someone at the station has a smartphone, or knows how to scan a QR code. In fact, according to Deutsche Bahn, the white arrival timetables are currently only displayed at about one in ten stations — predominantly the larger ones, where trains sometimes stop for longer between arrival and departure.

Nonetheless, the company now says it will "thoroughly evaluate the use of printed media at stations in the upcoming phase of scheduling." The provision of analog timetables will be discussed, in consultation with relevant interest groups. In other words, they will assess whether the schedules really are worth the paper they're printed on.

People still want to travel by train

It seems paradoxical, but in spite of all the upheaval and difficulties, people in Germany still haven't turned their backs on the train. Quite the opposite, in fact: There is significantly higher demand for rail travel. The number of train passengers has increased by around 50% since the 1990s; freight traffic has almost doubled. Deutsche Bahn has also increased the number of its locomotives and carriages. At the same time, though, the rail network has shrunk by more than 10%.

During the Euro 2024 soccer championship this summer, tens of thousands of European football fans experienced the now customary train cancellations, delays, and malfunctions for themselves. Suddenly, the quasi-monopolist Deutsche Bahn found itself in the international spotlight. Since then, it has launched a reconstruction program, in an effort to restore the good reputation Germany's railways once enjoyed far beyond the country's borders.

This article has been translated from German.

 

Does the global community still have at least one common denominator? The good news is: yes.

At present, this seems to be the "Global Alliance Against Hunger and Poverty" initiative launched recently at the G20 summit where government representatives from the most important industrialized and emerging countries meet.

Brazil started the new initiative, which now includes 82 countries, the EU and the African Union.

In addition, 24 international bodies, including the World Bank and the UN Food and Agriculture Organization (FAO), as well as 31 non-governmental organizations, are involved.

Germany was among the first to lend support. Svenja Schulze, the German Development Minister, merged the Alliance for Global Food Security, which was founded two years ago as part of the German G7 presidency, with the new initiative.

There is no shortage of money. The Inter-American Development Bank, or IDB, committed to providing up to $25 billion (€23.8bn) in financing to support policies and country-led programs to end poverty and hunger.

The aim is to lift 500 million people out of poverty by 2030.

Hunger, the blight of humankind

The informal group of G20 countries is one of the few arenas in which government representatives from countries with conflicting interests still meet face-to-face.

Originally founded in 2008 as a response to the Asian financial crisis in the 1990s, the group has become a format in which the global North and South, the G7 and the BRICS countries all come together.

"The world produces more than enough food to eradicate hunger", the G20 states concluded in the summit's final declaration.

There was no lack of knowledge, but rather a lack of "political will to create the conditions for better access to food," they said.

Stil, Flavia Loss de Araujo, a Brazilian expert in international relations, considers Brazil's G20 presidency, which passes to South Africa on December 1, a success.

"Brazil received support on the most important issues it proposed: hunger and poverty, issues that have always been neglected by rich countries," she wrote in an article for the online platform The Conversation, a forum for exchange between academia and journalism.

'Big money for defense and energy transition'

However, Claudia Zilla, an expert on Latin America from the German Institute for International and Security Affairs (SWP), warns against high expectations.

"At the moment, a lot of money is flowing from the industrialized countries into defence and the energy transition," she told DW.

While energy transition and climate crisis were also mentioned in the G20 final declaration, this was only in the form of abstract declarations of intent.

The states "reaffirmed" their commitment to "limit global warming to 1.5 degrees" and announced that they would "increase climate finance from billions to trillions," she said.

From Rio to Belém

The sobering results of the most recent UN Climate Change Conference in Baku suggest that Brazil has a lot of work to do even after the end of its G20 presidency.

After all, the next climate conference, COP30, will take place in Belém, Brazil, in November 2025.

Brazil will also take over the presidency of the BRICS countries in 2025.

It is likely that Brazil's G20 successor, South Africa, will continue the topic of climate change during its presidency, albeit with a different emphasis.

Debt relief for climate protection?

According to Magalie Masamba, a debt expert from the University of Pretoria, the funding of climate protection measures could be linked to the growing debt overload of many countries in the region.

"Meaningful participation will require a concerted effort to define and champion issues that are critical for Africa, such as equitable debt restructuring, mobilising climate finance and inclusive economic growth," she wrote in a piece for the Africa Policy Research Institute, or APRI. 

"This leadership role offers the chance to address Africa's sovereign debt crisis in a way that promotes long-term economic stability and equity, while pushing for innovative financing solutions to meet both development and climate adaptation needs," she continued.

Tax on the super-rich

However, Brazil's idea of a global minimum tax for the super-rich, which it favored during its G20 presidency and which could be used to finance both climate protection measures and social programs to combat hunger and poverty, will probably only appear in final declarations for the time being.

G20 coordinator Gustavo Westmann, the Brazilian president's international relations officer, said he was satisfied with small steps for the time being.

He told DW that as of now "we have managed to establish taxing the super-rich as an issue, but nothing more."

This article was originally published in German.

Africa is back in the spotlight as a continent of opportunities, with German Economy Minister Robert Habeck traveling to Kenya to open next week's two-day German African Business Summit (GABS).

The gathering, which is held in a different African country every two years, is Germany's largest business event focused on the continent, bringing together business and government leaders from Germany and Africa. 

Perceptions of Africa's investment climate

"The perspective on Africa is one of exaggerated political, policy and economic risks: politically unstable, corrupt, weak infrastructure, bureaucratic hurdles and high-risk environment," said Serwah Prempeh, a senior fellow at the Africa Policy Research Institute's (APRI) economy and society program.

"This, of course, deters German investors, particularly those in small and medium-sized enterprises (SMEs), who are typically more risk-averse," Prempeh told DW. 

In her recently-published autobiography "Freedom. Memories 1954-2021" former German Chancellor Angela Merkel mentioned the difficulty of persuading senior executives from large German companies to accompany her on trips to African countries.

"Most of them saw few opportunities for themselves on the African markets," she wrote.

Attempts to foster investment

Previous German governments have made several attempts at persuading German SMEs to increase investments in Africa. Initiatives such as the Compact with Africa — established during Germany's 2017 presidency of the G20 — aims to generate additional private investment in African nations to boost their economies.

Overall, however, Germany has hardly been politically and economically active in Africa in recent decades, according to APRI.

Foreign direct investment data reflects this. Germany ranked ninth among the top 10 investor countries in Africa in 2022 with $13 billion (€12.3 billion) — only $2 billion more than 2018, according to the United Nations Conference on Trade and Development (UNCTAD).

Prempeh told DW that German investors generally have a low appetite for risk.

"Many are holding out for increased government support before they invest in Africa," Prempeh said.

"This support might not come considering the tight fiscal position of the German government and the increasing pressures from citizens to focus and spend more on internal development issues."

Challenges for German investments

In 2022, Habeck called for a "restart" and a new approach to relations between Germany, Europe and Africa ahead of his first trip to Africa, during which he visited South Africa and Namibia.

In Kenya, Germany is acting as a financing partner for the expansion of Africa's largest geothermal power plant in Olkaria.

In May 2023, Chancellor Olaf Scholz personally announced a new €45 million loan on-site in Olkaria.

Habeck also plans to visit the power complex, whose capacity is set to double to 2,000 megawatts by the end of the decade.

According to Kenyan economist James Shikwati, the German investment approach to Africa and Kenya is facing a double crisis. 

"When it comes to Africa the potential German investments are facing competition from China and other emerging economies that have become aggressive in their investment approach to Africa," Shikwati said.

Shikwati suggested that Germans often come with a "mindset of how things should work," and should rather step back from assuming that "they are the experts and creating possibilities where they can co-create with Kenyan and African counterparts."

Continent of opportunities

Africa offers significant opportunities for German companies looking to diversify and reduce dependencies, especially from China. The green energy, infrastructure and IT sectors are attractive for investment projects.

But since the COVID pandemic and new conflicts on the continent, many African economies have been hit hard, financial budgets have become volatile. 

Many experts warn that mitigating those risks will be important for future investments.

Christoph Kannengiesser, CEO of the German African Business Association, pointed out that while there is a lot of talk about risk, Africa can actually help safeguard business models against risks and make them more resilient.

 "The continent does not share many of the global risks and supply chains to the same extent and is objectively no more risky than other regions of the world," he told DW.

The false and defensive perception by rating agencies and listed risk classes by the Organisation for Economic Cooperation and Development (OECD) makes it more expensive for companies that want to become active in Africa to raise debt capital, Kannengiesser argued.

Companies increasingly recognize the need for diversification and for the incredible potential offered by the neigboring continent, noted Kannengiesser. But the recession, the need for transformation in local markets is absorbing a lot of resources.

Africa ready to do business

Before the current economic challenges and the consequences of Russia's war in Ukraine, Germany had a well-functioning business model with investments in China, Western Europe, and the USA.

"Many German companies had the impression that the markets on the African continent, which are perceived as complicated and unknown to the vast majority, were not needed for business success."

Prempeh said that African governments are open and ready to do business. Most have very vibrant investment promotions institutions and special economic zones working to bring investors with different incentive packages, she stressed.

"Prospective German businesses should be talking to these state institutions," Prempeh said, adding that the German banking sector, including the public banks, must urgently develop new funding models for African investments.

"The current approach is not working," she concluded.

Edited by: Keith Walker

The Russian ruble has plunged to its lowest level against the dollar since the immediate aftermath of the full-scale invasion of Ukraine in March 2022.

The ruble hit 113 against the US dollar on Thursday. On Wednesday, Russia's central bank announced it would stop foreign-currency purchases to try and strengthen the currency and ease pressures on financial markets.

What's behind the currency plunge?

The ruble has been sliding since late summer, falling by more than a third since August. Oil prices have fallen in the same period, hitting Russia's earning capacity from its most important commodity.

That has piled pressure onto a war economy already struggling under the weight of soaring inflation. President Vladimir Putin has dramatically ramped up military spending over the past 18 months, in an attempt to gain the upper hand in the war in Ukraine.

Defense spending has more than tripled since 2021 and is set to be a record 13.5 trillion ruble ($122 billion, €102 billion) in next year's budget, another huge 25% hike. The country's central bank estimates inflation hit 8.5% this year, double its target. Interest rates are also at record highs, hitting 21% in October.

However, the sharp ruble plunge of recent days is linked to sanctions placed by the US on Gazprombank on November 21. Gazprombank was one of the few major Russian banks not previously hit by sanctions and had become the key platform for Russian energy payments and its main gateway to the global finance system. Banning Gazprombank from the US-dominated global financial system limits the Kremlin's capacity to fund its military and also makes it harder to receive revenues for its commodities, including gas, from its remaining European customers such as Slovakia and Hungary.

The United States has also moved to discourage foreign banks from doing business with Russia, warning them that they could face secondary sanctions if they signed up to Russia's so-called System for Transfer of Financial Messages (SPFS), the Kremlin alternative to the Western-dominated SWIFT system.

Chris Weafer, an investment adviser who has worked in Russia for more than 25 years, thinks the sanctions on Gazprombank could have "severe consequences" for the budget, "if workarounds are not found or waivers are not granted by the US" to some countries. "The Russian central bank is scrambling to find a way to deal with it. The evidence suggests it is still looking for a solution," he told DW.

Oleg Buklemishev, a Moscow-based economist, told video podcast DW Novosti Show that the latest developments are a reflection of the various pressures the Russian economy has faced since the invasion.

"The country, suffering and shifting exports and imports from one direction to another, bears colossal costs in logistics and sales," he said. "It is all insanely expensive. And at the same time, I would say that it is naive to expect that you and your currency will strengthen." 

What does it say about the state of the Russian economy?

Since Russia dramatically began ramping up defense spending, experts have warned of the dangers of its war economy overheating. While the country has experienced strong GDP growth and record-low unemployment as a result of the spending splurge, inflationary pressures have mounted.

Russia published new data this week which underlined some of the problems. Amid serious labor shortages due to workers being sent to fight in Ukraine and the fact that over 1 million highly-skilled workers left Russia due to the war, real wages increased 8.4% year-on-year in September.

The rise in incomes and spending has seen prices of important consumer items such as butter increase so much that theft has become common. In many shops, butter is now being sold in padlocked boxes.

What has the government said?

The central bank said its decision to stop foreign currency purchases "was made to reduce the volatility of financial markets."

Economy Minister Maxim Reshetnikov said the ruble's volatility was due to the strength of the US dollar and market concerns following the sanctions against Gazprombank. They were not the result of "fundamental factors," he told Russian news agency Interfax, adding the situation would "soon stabilize."

There are suggestions that a weak ruble will suit Putin's massive spending plans. A weak ruble means the Kremlin may have more domestic currency to spend, as its oil and gas exports are typically purchased in foreign currencies. 

Russian Finance Minister Anton Siluanov hinted at as much earlier this week. "I'm not saying whether the rate is good or bad. I'm just saying that today the exchange rate is very, very conducive to exports," he was quoted by state news agencies.

Weafer said the government sees the slide of the ruble as a chance to convert foreign currency earnings into as many rubles as possible ahead of the huge budget increase in 2025.

"It wants to keep the budget deficit low," he said, adding that he also thinks they may see advantages in terms of making their exports, such as fertilizers, cheaper for prospective buyers.

How is it likely to go from here?

Russia's economy has defied dire predictions before. When the US, EU and UK leveled sanctions on Moscow in early 2022, leaders claimed it would cripple the country's economy.

However, its huge reserves of oil and gas provided it with massive revenues throughout 2022, while its ability to evade sanctions meant it was able to keep revenues healthy for much of 2023.

Although it took time to find ways to beat sanctions, it has consistently been able to do so and may be able to do the same despite the latest Gazprombank sanctions. It has also deepened trade relationships with China, India and othersas European countries have largely turned away from its oil and gas.

However, there are reasons for Moscow to be worried. The falling price of oil has hit its most important source of revenue. Meanwhile, experts say the latest data suggests the economy is overheating to a level that is dangerous for financial stability. That puts significant pressure on the Kremlin to get the situation under control as soon as possible.  

Weafer said the weak ruble will make the battle against inflation more difficult for authorities to manage. However, he cautions that every time the ruble has previously slid, the government has eventually stepped in to correct the rate. "We may see it again before year-end," he said.

Purple hair streaked with gray frames Mirjana Nesic's face. She is looking down at her hands and says that they are tired from work. She is an employee at the South Korea-owned automotive industry supplier Yura in Leskovac, Serbia. The 50-year-old says the painkillers she takes hardly help anymore.

Pressure at the Yura factory is intense, she adds and begins to talk about "psychological torture," unattainable targets and being forbidden to use the bathroom. Serbian media have even reported that workers are forced to wear diapers while on the job.

"I feel sick when I go in there," says Nesic. She needs medication to sleep.

For 13 years, Nesic has been producing automotive wiring for Yura in Leskovac — wiring that might eventually find its way into a sleek Mercedes or any other German carmaker the company supplies.

Yura is not the only parts supplier in Serbia where media and trade unions have uncovered violations of human rights and labor laws. Chinese company Linglong and the German supplier Leoni were also reported to be "exploiting" their workforces in the southeast European country. All these companies supply German automakers like Mercedes, Audi, Volkswagen and BMW.

Fear reigning at Serbian plants?

Since 2023 the German Supply Chain Act has been in effect with the aim of protecting workers like Nesic. The law holds companies responsible for ensuring compliance with human rights and environmental standards throughout their entire supply chains. This includes the right to workplace health and safety, fair wages, and the right to form unions.

Earlier this year, the Independent Union of Metalworkers of Serbia complained to carmakers Mercedes and Audi about working conditions at Yura. In their complaint, the union said workers are often exhausted, poorly paid and exposed to dangerous chemicals. Furthermore, the right to strike and hold union meetings had been violated.

Predrag Stojanovic, who is active in the union, told DW that he had experienced this firsthand during the COVID-19 pandemic when he advocated for protective measures at the workplace. He was eventually fired for it, but later took legal action and won the case.

Stojanovic and Nesic are among the few workers who dare to speak to the press. In June, Nesic joined about half the workforce at the Leskovac plant in a strike.

"Colleagues asked me how I had the courage to do it. Do they think that we are not afraid, too?" she says, adding that she felt things couldn't go on as they were.

Violations investigated by carmakers and authorities

Yura supplies premium German carmakers Mercedes and Audi. Audi, a subsidiary of Volkswagen Group, told DW in a statement that it is "reviewing" conditions at Yura, while Mercedes replied they are taking the matter "very seriously" and demanded an explanation from Yura after learning of the allegations.

Additionally, the company said it had hired an independent auditing firm to conduct an "internationally recognized sustainability assessment." Should any misconduct be found corrective actions would be taken, Mercedes stated. Yura had not responded to the allegations by our editorial deadline. 

The German Supply Chain Act allows affected individuals, unions and nonprofit organizations to take action against human rights violations or environmental breaches. Complaints can be filed with the Federal Office for Economic Affairs and Export Control (BAFA) in Germany. The office can also initiate investigations based on media reports and impose fines following an investigation.

The Serbian metalworkers union submitted a complaint to BAFA regarding exploitation at Yura in June 2024 but has yet to receive a response.

Annabell Brüggemann, a legal advisor at the European Center for Constitutional and Human Rights, says she's experienced BAFA's slow response to accusations from her own complaints, and criticizes that those affected are not involved in the procedure.

"Some cases have been ongoing for over a year, but we don't know what BAFA has demanded from the companies," Brüggemann told DW.

According to BAFA, they have received a total of 221 complaints since the new law was enacted, three of which are from Serbia. Out of the total, 161 cases were deemed unfounded, leaving 60 active complaints. BAFA says it has not imposed any penalties so far.

Public outcry across Serbia

The alleged violations have caused a public outcry in Serbia after several media, including cable news outlet N1, the weekly Vreme, news portal Juzne Vesti, as well as trade unions, reported that other automotive-industry suppliers in the country are also violating the rights of their workers.

Accusations were leveled, for example, against Germany-based company Leoni — majority-owned by the Chinese company Luxshare since 2024 — and the Chinese tire manufacturer Linglong.

Leoni is a key supplier for German carmaker BMW, while Linglong has ties to Volkswagen Group. Speaking with DW, two Leoni workers described working conditions as "exploitative," and another worker from Leoni's Prokuplje plant claimed her workday was marked by "psychological terror," citing "low wages, absurd targets and harassment."

In response to a DW request for comment, Leoni rejected the accusations, stating that "in any organization of this size, there will inevitably be a few individuals who act irresponsibly against internal rules and guidelines." Such behavior will lead to disciplinary action, up to and including dismissal, Leoni says.  

BMW told DW that it takes the accusations very seriously and has requested a statement from Leoni. Volkswagen responded by saying it does not comment on "individual potential" accusations against its suppliers, adding that it thoroughly and promptly investigates all reports.

The Supply Chain Act a law without teeth?

Brüggemann thinks that the problem with Germany's Supply Chain Act is that workers often do not know about it or even that their company is part of a supply chain to Germany.

Hendrik Simon, a political scientist at the Research Institute for Social Cohesion think tank, criticizes that the original draft was watered down in the political decision-making process so that "there is no clause on civil liability," for instance.

German advocates of stronger legislation are now pinning their hopes for improvement on the new EU Supply Chain Act, which was passed this year and must be adopted by Germany. It includes the possibility for claimants to sue companies for damages in civil courts in EU member states.

However, the worker at the Leoni factory in Prokuplje that DW spoke with feels nothing will change. "I will do everything I can to find another job," she says.

This article was originally published in German. It was compiled with the help of Journalismfund Europe, an independent nonprofit organization promoting investigative cross-border journalism.

The stylish new central library in El Salvador's capital San Salvador is buzzing with activity.

The futuristic-looking glass building, which is located opposite the city's cathedral and next to the presidential palace, has turned into a family meeting hub.

Children read or play, parents watch them, and the selection of books is impressive.

The entire project was financed by China and is part of a modernization project for the historical center in San Salvador.

However, El Salvador President Nayib Bukele wants to transform much more than just the capital's city center — he has a vision for the entire country.

"Our next step is to ensure that the world perceives El Salvador more for its economic miracle than for its security miracle," he stated, adding, "this will take a few more years, but we are on the right track."

Security situation stabilized

According to official data, El Salvador has transformed itself from one of the most dangerous countries in Latin America to the safest.

The number of murders fell from almost 4,000 in 2017 to less than 80 in the first few months of 2024.

The government arrested more than 80,000 suspected members of the dreaded "Mara" gangs as part of an ongoing state of emergency that began in 2022.            

The term "Mara" comprises numerous criminal gangs that operate throughout Central America.

Their main businesses are arms, drugs and human trafficking as well as prostitution.

However, human rights and non-governmental organizations (NGOs) criticize the crackdown, saying it has landed thousands of innocent people in prison.

Critics say basic democratic rights are being undermined and that state of emergency restrictions have negatively impacted normal citizens, not just armed gangsters.

Confident industry

And yet the majority of the Salvadoran population feels downright liberated.

The same is true for small and medium-sized businesses, which suddenly no longer have to pay protection money to the much-feared Mara gangs.

"Small businesses had to give up part of their income for security purposes and the money was then lacking for investments," Karla Klaus, the director of the German-Salvadoran Chamber of Commerce, told DW.

Also, many large German companies felt forced to leave the country due to the poor security situation, she added.

However, a current survey by the chamber amongst its around 150 members, shows that confidence is now significantly higher.

"Numerous companies are considering investments in renewable energy supplies, in upgrading machinery and in hiring new staff," Klaus told DW, observing a general 'spirit of optimism' among businesses.

In April 2024, for instance, Google also opened a new headquarters in San Salvador.

The American IT giant stated at the time that it wanted to help digitize and modernize the country.

Since then, its modern glass building has become a symbol for the hope that the economic miracle could actually be on its way.

Controversial megaproject

The government is banking on a ripple effect and is also pinning further hopes on tourism.

The "Surf City II" project, for example, aims to appeal to water sports enthusiasts from all over the world.

"We have one of the most spectacular beaches in the country," Bukele stated years ago.

"Surfers tell me it's one of the best surfing beaches in the world but there is not even a decent road to get there," he said.

Also other beaches in the area have not been made accessible, Bukele said.

He promotes the project and has promised to invest $100 million (€95m).

Furthermore, plans for a new, second Pacific airport are in the pipeline. The idea is to bring tourists from Western countries and the southern US directly to the beaches.

Investors also have plans to build new hotels for these target groups, including the global surfing scene.

Questioning the promises

"The ecological damage of this project is so substantial that a sustainable implementation is basically impossible," Ines Klissenbauer, Central America expert at the Latin American aid organization Adveniat, told DW.

In her view, it is simply another attempt by President Bukule to attract capital to the highly indebted country.

Claudia Ortiz from the oppositional Vamos party remains skeptical, too.

She compares the project to El Salvador's failed Bitcoin strategy.

"Bitcoin is part of an authoritarian project and a system in which public funds are used at discretion and without transparency," Ortiz criticizes.

Throughout El Salvador, there are signs in stores that Bitcoin is accepted as a means of payment.

However, the average person is far from being able to afford the virtual currency.

"El Salvador's economic problems and the economic needs of the people will not be solved by making Bitcoin a legal tender," Ortiz told DW.

This article was originally published in German.

In Brussels, European Parliament member Marie-Pierre Vedrenne explains her position on the bloc's raw materials policy, thus. 

"France, Germany and the whole European Union must act together to secure a sustainable and reliable supply," Vedrenne, of the pro-European liberal political group, Renew Europe, tells DW. 

"How the raw materials are extracted should live up to our vision of avoiding exploitation, and ensure children don't work under horrendous conditions."

7,000 kilometers (4,350 miles) south of Brussels, near the mining town of Kolwezi in the Democratic Republic of the Congo (DRC), Paul Zagabe Nbanze works in a copper and cobalt mine. His baseball cap is his only protection against the blazing sun. Here, miners work with their hands and carry 50-kilo (110-pound) sacks of rocks on their backs.

One hears the ceaseless, rhythmic beat of heavy hammers breaking the rock. Nbanze holds up two pieces, bashed from the ore.

"The white people buy this. We sell it, but we don't really know what exactly they do with it," he says.

No way around Congolese cobalt

The dusty red earth of Congolese mines and the air-conditioned halls of the Europe Union couldn't be farther apart. But surging demand for cobalt connects them. Cobalt is a vital component of batteries, which are key to Europe's energy transition and its aim of acheiving climate neutrality by 2050.

Two-thirds of the world's cobalt comes from the Democratic Republic of Congo. After producing just 800 metric tons in 1994, yearly output was up to 98,000 metric tons by 2020. Meanwhile, cobalt production in the rest of the world has also doubled but growth remains comparatively small.

Dependencies reversed

Europe needs what Congo has but the equation is not straightforward. "75% of cobalt processing happens in China. So if you want to actually use the cobalt, you must do business with China," says Cecilia Trasi, climate and energy analyst for the European think tank Bruegel.

MEP Vedrenne is aware of this imbalance and explains that China currently controls most of the value-adding industries related to raw materials, from extraction to recycling. She says China's methods in the DRC are exploitative, "with no intention of building capacity for adding value in Africa, even if that should be the goal."

Few European players are visible in DRC's mining areas, and, after refinement in China, the cobalt comes to Europe after making at least 5 to 6 more stops, Trasi estimates.

Businessman Simon Tuma Waku says it is only logical that the DRC would shun European countries as partners. Tuma Waku was the DRC's minister of mines and hydrocarbons and sponsored the country's first mining code in 2002, in the wake of the Second Congo War.

"African nations are saying you must also consider our wishes and feelings," he says.

"Don't force us to do something that you think is best for us. Rather, ask us what we want to do. And we'll tell you how you can invest your money."

Congolese confidence

Over 100 years ago, slaves in the Congo Free State, effectively a private colony of Belgian King Leopold II, produced rubber for the European market under inhumane conditions and suffered unimaginable cruelties.

After the Congo gained independence in 1960, Mobutu Sese Seko took power in 1965. A system of nationalization, lack of investment and exploitative cronyism meant that hardly any profits remained in the DRC and production eventually collapsed. Only under Joseph Kabila, the predecessor of current president Félix Tshisekedi, did attempts to regulate the mining industry begin. Kabila also sought to woo important companies and even collaborate with neighboring Zambia with the aim of entering the battery manufacturing industry.

"We opened the mining sector to private investors to save it from decay because the state was unable to attain large profits," Tuma Waku says on the sidelines of a mining trade fair in Lubumbashi.

He praises his own mining code from 2002 for resuscitating the industry. Against the backdrop of gleaming new machinery and a host of international guests, Tuma Waku seems to have a point. The law was updated in 2018 to focus more on mining's environmental sustainability.

European ideals

If one looks closer, there are signs of European projects in the DRC. For instance, the much-hyped Lobito Corridor infrastructure project, which aims to link Kolwezi with the Angolan coastal town of Lobito. New power lines, roads and railways would give mineral rich areas in southern DRC improved and direct access to the Atlantic Ocean and Western-oriented markets in Europe.

In Brussels, outgoing EU Commissioner for International Partnerships, Jutta Urpilainen, points out successes. She says the EU and its member states have found new self-confidence under the slogan "Team Europe," launching the Global Gateway Initiative in response to China's Belt and Road infrastructure drive. 

"It's important to invest in development cooperation, and that Europe remains a champion of climate financing, human development and global investment," Urpilainen says, which is something that African partners expect. 

But despite these efforts, Europe is unlikely to become the DRC's number one trading partner anytime soon. China still receives the lion's share of Congolese exports, and responding to the whims of former colonial powers is far from a priority for regional and industry power brokers. Even the so-called advances made possible by Congo's updated mining law remain so many words on paper — with local NGOs complaining that the government is making no effort at all to enforce the law.

Additional reporting: Jan Philipp Scholz, Johannes Meier, Kahozi Kosha. Editing by Sarah Hucal.

Confronting Temu with the EU's allegations is like doing business with the popular Chinese shopping app. You'll get the information you want in many bits and pieces, just as Temu customers get their goods in lots of small packages.

It would take the length of this article just to line up the many pieces of information DW has received from Temu, one of which was Temu's standard phrase about "cooperating fully with [EU] regulatory authorities."

Temu appears to be used to responding to allegations, most probably because the company is constantly confronted with them.

In early 2024, the European Toy Association found safety risks in 95% of children's toys sold on Temu. The German Consumer Protection Association has repeatedly issued warnings, with the last such formal notice to stop its unlawful behavior or face a lawsuit sent this spring.

In October, the pressure on Temu increased again after the European Commission launched a formal investigation into the shopping platform's business model. Prominent on the EU executive arm's long list of complaints is the claim that Temu is exporting products to the EU that do not comply with the bloc's standards. Moreover, the Commission accuses the online retailer of offering fake discounts to customers, publishing fake reviews, insufficient vendor information, and having an addictive app design.

What's Temu's business model?

Outside of China, Temu first emerged in the United States in September 2022 with the claim it wants to give Americans greater access to Chinese products. Since then, the marketplace has experienced rapid growth not only in the US but at a global level.

From teeth-whitening powder to garden shears, Temu offers thousands of items at unbeatable prices. The products it sells usually arrive in various separate shipments directly from China. It is estimated that in Germany alone, 400,000 packages from Temu and the Chinese fashion marketplace Shein arrive every day.

Temu is in a position to offer its products at unbeatable bargain prices because it operates solely as a marketplace, meaning Temu customers usually receive their package directly from a manufacturer's or seller's warehouse in China. Temu only handles the financial transactions and, in some cases, the shipping. In any case, Temu acts only as an intermediary, earning a commission for its services.

This setup allows Temu to forgo stocking inventory almost entirely, thus reducing its costs. In turn, the practice also means longer delivery times for customers.

Alexander Graf, a German platform-economy expert, says longer delivery times are key to Temu's low-price business model.

"The Western e-commerce industry has evidently focused too long on shorter delivery times," said Graf, who is co-founder and co-CEO of Spryker, a software firm for e-commerce based in Berlin and New York. Apart from that, Temu's app "encourages consumers to shop more frequently," he told DW. 

Temu's strategy seems to be working nicely, given that it was the most downloaded iPhone app in the US in 2023, according to Apple.

So, within only two years, Temu has grown at a pace that it's become a rival to online retail behemoth Amazon, still the dominant player in the market, according to Graf. But Amazon is "struggling to compete with Temu on its main platform," he added. 

Under efforts to curb the rise of Temu in the US, Amazon, meanwhile, has launched its Amazon Haul advertising platform also featuring a colorful range of inexpensive items, but with noticeably longer delivery times compared to Amazon's core service.

Who owns Temu?

The owner of the shopping app that has alarmed consumer advocates is PDD Holdings. Listed on the US tech exchange Nasdaq, the firm noted the Irish capital of Dublin as its "principal executive office" in a 2023 filing with the US Securities and Exchange Commission (SEC). It had previously listed Shanghai as its main office.

PDD's key brand is the e-commerce platform Pinduoduo, owned by Chinese billionaire Colin Huang. Specific revenue and profit figures for Temu do not appear in PDD Holdings' financial statements, and the company remains tight-lipped. "As part of the Nasdaq-listed PDD Holdings, Temu does not disclose separate financial or operational metrics," a company spokesperson told DW.

Since April 2023, Temu has also been operating in Germany, though it has not disclosed how many people it employs here.

Temu unfazed by EU investigation

The EU investigation against Temu, launched on October 31, is the second probe against a Chinese e-commerce platform following action against the online retailer Aliexpress. The bloc's so-called Digital Services Act allows the EU Commission to scrutinize any online retailer classified as a "large platform" with more than 45 million users.

The EU Commission investigation has given Temu until early December to offer so-called remedies and make adjustments to its business model. If it fails to comply, the platform will face hefty fines.

EU taxation policy helps Temu advance

A major issue not addressed by the EU probe, however, is Temu's practice of exporting its goods to Europe largely duty-free. Under EU rules, shipments valued at under €150 can be imported without paying any tariff, says taxation expert Roger Gothmann, who believes that Temu's success relies hugely on exploiting the loophole.

"A large portion of shopping baskets on Temu stays under €150. Without this [duty-free] threshold, Temu couldn't offer such low prices," he told DW.

The CEO of Taxdoo, a Hamburg, Germany-based company offering accounting and VAT software for online merchants, believes closing the loophole could potentially slow down Temu's growth in Europe. He suspects that Temu deliberately splits larger orders to stay under the duty-free threshold. Spot checks by customs officials have confirmed Temu is using this strategy, he said.

Despite the duty-free status of many of Temu's imports, the shopping app still has to pay so-called import value-added tax (VAT) to the tax authorities in Ireland, where it's based, Gothmann added. Theoretically, the Irish state would then have to distribute Temu's tax payments to other EU states like Germany, where it is conducting its business. Yet, data-sharing remains cumbersome and is rarely carried out, Gothmann criticizes, and advocates for stricter oversight of marketplaces like Temu and the enforcement of existing laws. Equipping authorities with modern analytical tools could also be helpful, he said.

Unsurprisingly, Temu denies claims it violates EU taxation rules, asserting that its growth "does not depend on duty-free imports" and that it "does not split packages" to evade customs checks.

While the EU has proposed eliminating the duty-free limit by 2028, and wants to establish an EU-wide data hub for customs data, Alexander Graf believes Temu's rise cannot be stopped. Pointing to the dominance of Temu's parent company, Pinduoduo, which "outpaced existing platforms in Asia within five years," he said: "In any case, the industry must adapt to Temu's new business model. The number of packages arriving from China is unlikely to decrease."

This article was originally written in German.