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Germany’s dismal election

Complacent elite rejects all change even as Germany’s problems mount

Alexander Mercouris

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On Sunday Germany votes in an election from which Chancellor Merkel’s CDU party is universally expected to remain the largest but which none of the underlying problems which affect Germany have been addressed.

One of the problems involved in discussing Germany is that the image of the country as a runaway economic success story is so powerful that it makes objective analysis of its problems difficult.

The reality is that Germany is indeed a very rich and economically successful country.  However there are growing problems that put its long term prospects in doubt, and these are being ignored rather than addressed.

Briefly, the German system as it evolved after the Second World War involved a political and financial system heavily geared towards high business investment.

The secret of German economic success was the close collaboration of decentralised regional governments and banks with a partially cartelised business community, with the whole system underpinned by high savings and a well trained and well organised workforce.

Key to the success of the system was a monetary policy geared towards creating low inflation and high savings, and a fiscal policy that avoided deficit.

The result was indeed high business investment drawing on high savings in conditions of extreme price stability within a strictly controlled competitive environment, enabling German business to remain continuously competitive even as German wages and living standards steadily rose.

Over the last decades this system has slowly unravelled as German banks have become less focused on Germany’s domestic economy and more involved in the international financial system, and as Germany has integrated itself ever more deeply into the EU’s institutions and has replaced the Deutschmark with the euro.

The result is that savings and investment in the German economy have fallen from their historic post war highs, so that the total rate of investment in the German economy has fallen from around 30% of GDP in the early 1980s to around 19% now, with the two biggest falls taking place in 1990 (at the time of unification) and in 2000 (at the time of the introduction of the euro), with the rate of investment unchanged since then.

Moreover recently pressure on savings has been increasing further because of the zero interest rate/quantitative easing policy of the European Central Bank, whose lax monetary policy is also causing Germany to experience for the first time in its post Second World War history on a sustained basis a property price boom, something which the Bundesbank, Germany’s own central bank, always anxious to direct investment towards businesses rather than fixed assets, had previously always acted to choke off.

The Germans have responded to the fall in investment in their classic way, striving to keep their economy internationally competitive by compensating for the fall in investment with downward pressure on wages.

In addition Germany has sought to continue to run a budget surplus – operating its economy ‘within its means’ as it is called – a policy whose intended and actual effect is to choke off imports.

Taken together with the relative weakness of the euro (as compared to the strength of any currency Germany might have had if it still had the Deutschmark) these policies have kept the German economy internationally competitive, causing it to run a massive surplus.

However the continued downward pressure on wages, the action taken to make the German workforce more ‘flexible’ (the so-called Hartz IV reforms), the refusal to run a budget deficit (causing public investment to collapse), and the property price boom, are making German society more unequal, and are increasing pressure on living standards.

Needless to say that feeds resentment and It is anyway debatable how sustainable a system, which compensates lower wages for lower investment, in the end is.

At this point it is important to make some qualifiers.  The German economy remains exceptionally strong and the standard of living in Germany remains by international standards extremely high.  The problems, though real, are still in their infancy, and there is time and space to turn things round.

Germany’s real problem is not that its problems are intractable.  It is that under Angela Merkel, who became the CDU’s leader in 2000 – just as the second big fall in the economy’s rate of investment took place – and who has been Germany’s Chancellor since 2005, no serious attempt to address these problems has been taking place.

At a time when Germany needs purposeful policies to turn things round, Merkel’s complacent “keep calm and carry on” approach is leaving them as they are.

The result is that behind the facade of contentment there is growing unease.  Some of the consequences have been well described in a recent article by Andrew Spannaus

A …. major factor is the system of labor market and welfare reforms introduced in Germany in the 2000s. The most famous is the “Hartz IV” law, which provides unemployment subsidies of just 280 euros ($330) a month, and forces people to accept whatever jobs they are offered, even at only 1-2 euros an hour.

German companies have done very well with this system, that allows them to exploit extremely cheap and flexible labor. Critics points to this as one – although certainly not the only – factor contributing to the great success of German industry in Europe.

For the six million citizens trapped in the system though, things aren’t so great. There are entire areas called “Hartz IV neighborhoods,” indicating widespread socio-economic difficulties among the local population. If we add the high level of “working poor,” a category that has reached 9 percent of the population in Germany, it becomes clear where the populist movements can look for votes on economic issues.

This situation explains the strong reaction of many Germans when Merkel, without much consultation, suddenly threw open Germany’s and Europe’s doors to the mass refugee flow in 2015.  Inevitably many poorer working class Germans, who have been under growing economic pressure for some time, resented the fact that Merkel and the political establishment appeared to care more about the refugees than it cared about them.  In my opinion this was a far more important factor in the widespread protests in Germany against Merkel’s policy in 2015 than the supposed xenophobic or racist attitudes of lower class German voters, whose grandparents had accepted mass immigration from Turkey and southern Europe in the boom times of the 1950s and 1960s without protest.

Unfortunately the problem is not just Merkel.  The entire German political establishment is locked into the same complacency, so that she has fought the election without coming under any serious challenge.

That a thirst for such a challenge is there is shown by the brief surge of support for Martin Schultz after the SPD nominated as its Chancellor designate at the start of the year.  In the event – as I and many others predicted – Schulz has however proved to have been a truly dreadful choice, with offering no credible alternative to Merkel, so that after his brief surge the SPD’s polling figures have spiralled down.

The result is a dismal election, with a sense of Germany treading water.  Even neoliberal admirers of Merkel such as the Guardian’s Natalie Nougayrède are dismayed

Having spent this week in Germany, I am struck by another inward-looking syndrome. The German campaign has paid very little attention to Europe, not to mention the world beyond it. It has practically dispensed with the question of how the country should relate to realities beyond its borders: the global shifts at work, how to define its role in a changing environment, how to strategically prepare for the future, and the external impacts that may lie in store…..

The Germans simply don’t want to hear much about the troubles of our times and how to face them: they just want to hunker down and keep on living the good life – which is one of Merkel’s CDU party slogans…..

…..I’ve just spent days in Berlin, Leipzig and Munich, meeting officials, members of the Bundestag, municipal and regional elected representatives, and civil society activists, on a study tour of the German elections with the Robert Bosch Academy. Here are some of the comments I heard. On Germany’s potential leadership role in the Trump era: “The expectations other countries have towards Germany are sometimes exaggerated. We are self-confident, but we don’t have any missionary zeal. We are intensely aware of our history”; “Trump is disturbing, but to take up a leadership role is just too much for us.”

On Europe: “It’s not a topic in this campaign because all the parties, apart from the AfD [the far-right Alternative for Germany], are convinced by the European project. Germans need Europe to forget they are Germans. It’s how we break away from our national historical burden.” On eurozone reform (said with a touch of irony): “Macron wants progress, but it might be expensive for us.” And on Brexit (when asked about it): “It’s like a satire show.”

One of the most fascinating developments in Germany is that, contrary to many predictions, the 2015 refugee crisis has not upended the nation’s politics entirely. How come? In Britain, it contributed to producing Brexit. In France, it helped Le Pen collect 10m votes. In 2015 the world’s huddled, desperate masses came to Germany – and yet, two years on, the country hardly seems to worry about the state of the world, or wants to even discuss it. “We are proud of what we did, the welcome culture, but it mustn’t happen again,” is the main answer you get when raising the question.

Into the gap opened up by the German elite’s complacency has moved the AfD, the new political movement originally created by a group of professors to challenge the twin orthodoxies of Germany’s Atlanticist foreign policy and the euro, but which has gained popular traction as it has redefined itself as an anti-immigrant party and has veered towards the right.

How well the AfD will do in Sunday’s election remains to be seen.  Here however I will restate a view which I previously made in connection with the role in French politics of Marine Le Pen.  Since in Germany as in France there will alway be a majority against a challenge to the status quo from the right, the eventual effect in Germany of the AfD, as of Marine Le Pen in France, will be to reinforce the status quo, not to change it.

On the subject of Angela Merkel herself, though she retains many of her political skills and a large reservoir of support amongst Germany’s large centre right Christian electorate, she has increasingly come across in this election (at least to me) as tired and stale, something which incidentally was never true of her CDU predecessor Helmut Kohl.

Almost everyone expects this to be Merkel’s last election, and I have no doubt this is right.  Not only is Merkel’s time as Chancellor drawing to a close, but I doubt she will be around for much longer, and I think it is unlikely she will see out her full term.  Had the SPD picked a more charismatic and popular candidate than Martin Schulz, I have no doubt she would have been in serious trouble during the election, though the nature of the German political and electoral system always gives the incumbent Chancellor a big advantage.

Germany’s and Europe’s problem – and potentially their crisis – is that in the desert which is what Germany’s current politics have become, it is difficult to see any change coming after Merkel is finally gone.

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Tom Luongo
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Tom Luongo

I think Schultz was picked BECAUSE he was a dismal candidate. And his collapse would ensure Merkel would have no credible opposition and possibly win outright. It was done to stave off AfD. It would allow her and her foreign minister Gabriel to make noises about normalizing relations with Russia while remaining strong against Brexit and the Visigrad 4 who refuse to make the same ‘sacrifice’ the Germans made by admitting all these refugees.

BobValdez
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BobValdez

Absolutely!

Le Ruse
Guest
Le Ruse

What about that one ??comment image

RaisingMac
Guest
RaisingMac

You are right about Martin Schulz. I still can’t get over the fact that the SPD actually managed to find a candidate even more pointless than Sigmar Gabriel. In all likelihood, the SPD will lose yet more seats this time around. Pathetic.

Le Ruse
Guest
Le Ruse

This Martin ??comment image?w=620

RaisingMac
Guest
RaisingMac

Yup. That’s him.

DenLilleAbe
Guest
DenLilleAbe

The usual tribe: The EU will fail, the euro will fail, Germany will fail, neo liberalism, fascism ect, ect.
Living in northern Europe I consider my self blessed, especially compared to the mess that is the US, we might not make it to millionaire in dollars, but we have a good life.
Germany will prevail as ever, and the European project moves forward, the EU is already the largest economy in the world, capable of bringing the multinationals to their knees, not even the US can do that…

XRGRSF
Guest
XRGRSF

Is this anything like the Thousand Year Reich ?

Tim Webb
Guest
Tim Webb

“Etc, Etc” I think is what you meant to write.
From the Latin “et cetera”, ie “and the rest”.

observerBG
Guest
observerBG

Germans do not have children, they will be replaced and will not exist in the future. Native german (non-immigrant) birth rate is 1,4, way below 2,1 – the replacement rate. So there will be no blond or white people in Germany, there will be mostly low IQ brown and muslim people. You will be replaced. Second – even with immigration, the german population is old and declinig, so it will dissappear at some point in the future. Third – Germany is a declining country – it will matter less and less in the future. China gdp growth rate – 7… Read more »

margarida
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margarida

HOW MANY MORE RAPES AND UNEMPLOYMENT DOES GERMANY NEED TO WAKE THE GERMANS UP?

JNDillard
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JNDillard

As usual, excellent analysis by Mr Mercouris. Some seventy years ago Germany hitched its wagon to the Atlanticist wagon. Until recently, that has proven an exceptionally wise choice. Now it is proving to be a disastrous one, but like an addict comfortable in their addiction, Germany will go down with the Atlanticists. There is a dim possibility that the economic opportunities being offered by the Russian and Chinese markets will allow it to transition, but at this point Germany is a strong supporter of Atlanticist polices that can only be called disastrous.

samo war
Guest
samo war

merkell want worldd satan mafia matrix ???

tjoes
Guest
tjoes

Merkel looks like an old Notzie that has been used hard and put away wet. But she is good for the deep state so they will prop her up. And nuttyahoo likes her, since she puts Israel interests ahead of Germany.

Dow Jones
Guest
Dow Jones

Like all occupied nations, Japan, Germany, Palestine etc. the toll of mental and spiritual subjugation to an alien and brutal culture has destroyed the will to procreate and continue living. The Japanese aristocracy can control their livestock with techie BS while the Germans are simply dying off and being replaced on the sheep farm with imported tribes from USSA’S ongoing and unending judaic wars. The Merkel slash “Soros” conspiracy to destroy the last sovereign states of Europe as they continue erecting the hated globalist EUSSR project in Natostan capital, Brussels. “In his book «Praktischer Idealismus», (1920) Austrian Count Richard Von… Read more »

Tim Webb
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Tim Webb

“Who is this elite however?”
The answer is obvious; mankind’s intractable and incorrigible eternal enemy, the chosen people of satan, THE JEW.
Look at the loathesome Schultz’s comment if you don’t believe this.

pogohere
Guest

European Prize for the Chancellor 1-13-11 The European Society Coudenhove-Kalerg has awarded Chancellor Angela Merkel the European Prize 2010. The prize is awarded every two years for exceptional contributions to the European unification process. . . . Angela Merkel is the second German head of government (after Helmut Kohl who received the prize in 1990) to be awarded this prize. The last time the European Prize was awarded in 2008, it went to the former Polish Foreign Minister and current Secretary of State in the Polish Government, Władysław Bartoszewski. The European Prize is based on the vision of the diplomat,… Read more »

Dow Jones
Guest
Dow Jones

Link below to the daily toll of Merkill’s invading hordes as they rape, pillage and plunder their way across a subdued and resentful population that may very well surprise the presstitutes and politburo in Brussels on Sunday 23rd.

Rape, pillage and plunder; Merkill’s generous gift to the German populace.

https://www.google.com/maps/d/viewer?mid=1_rNT3k2ZXB-f9z-2nSFMIBQKXCs&ll=50.18890452243554%2C10.293085891308692&z=8

disqus_1Op5S8jvui
Guest
disqus_1Op5S8jvui

Yes, the Germans have worked hard and efficiently to create the well being of their country. However, Ms Merkel has committed an unforgivable, political and historic crime by throwing open the borders of the EU nations thus destroying the national borders and quality of life of qualified nations for Germany’s and its corporations own benefit. The damage to Europe is huge. She and Germany will understand in time that they cannot own Europe or the world. There has always been a mentality and arrogance gap there. Minding that Deutsche Bank has been in default for long or that Greece is… Read more »

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Some Russian monarchists want Tsar Vladimir Putin

Latest news from Russian monarchists highlight the debate over bringing the Russian Empire back to life in modern times.

Seraphim Hanisch

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A December 13 report in The Wall Street Journal shone light on a notion that has been afoot in the Russian Federation since the fall of Communism in 1991 – the restoration of the Monarchy as the form of government, complete with a new Tsar of all the Russias.

Of course, some of these monarchists have a top contender in mind for that post, none other than President Vladimir Putin himself.

This idea has long been used in a pejorative light in the West, as various shadowy and not-so-shadowy elements in the American media speculated over the years that Mr. Putin was actually aspiring to become Tsar. This was thrown around until probably the time that the Russian president spoke, lamenting the fall of Communism, and since then the prime accusation has been that President Putin wants to bring back the Soviet Union.

This is not true. It also does not appear to be the case that the Russian president wants to be Tsar. But the monarchists are not fazed in the slightest. Here is excerpted material from the WSJ piece, with emphases added:

The last time term limits forced Russian leader Vladimir Putin to step down from the presidency, he became prime minister for a few years.

This time around, a group of pro-Kremlin activists have a different idea: Proclaim him Czar Vladimir.

“We will do everything possible to make sure Putin stays in power as long as possible,” Konstantin Malofeyev, a politically active businessman, said recently to thunderous applause from hundreds of Russian Orthodox priests and members of the country’s top political parties gathered at a conference outside Moscow. They were united by one cause—to return the monarchy to Russia…

Even among those who want a monarchy, however, there are splits over what kind it should be. Is an absolute monarchy better than a constitutional monarchy? Should a blood line be established or should the czar be elected? For those who favor male succession, would it be a problem that Mr. Putin reportedly only has two daughters? Some have even suggested others besides Mr. Putin should accede to the throne.

There is a very keen interest indeed among some in Russia that propose various options as to who might best become Tsar in the event that the Monarchy is restored.

Grand Duke George Mikhailovich Romanov and his mother, Grand Duchess Maria Vladimirovna of Russia, together with Metropolitan Hilarion Alfeyev, head of the Russian Orthodox Church Department of External Relations

One candidate that has received significant attention is a man by the name of George Mikhailovich Romanov. He is an actual member of the Royal family, the heir apparent to Maria Vladimirovna Romanova, Grand Duchess of Russia. There are other heir apparents as well, and the issue as to who it should be has not been settled among the surviving members of the Romanov family.

The restoration of the Russian monarchy is unique because to carries strong religious significance. As far back as the 8th and 9th centuries, A.D., a host of saints and prophets appear to have foreseen the advent of the Soviet times and the restoration of the Tsar after their conclusion.

Some such prophecies are attributed to anonymous sources, but some are named. Here are two with rather extensive editing, so please go to the site linked for the fullest description of the prophecies.

Monk Abel the Prophet (+1831).

In a conversation with Tsar Paul I (+1801), after prophesying the destinies of all the Tsars from Paul I to Nicholas II:

“What is impossible for man is possible for God. God delays with His help, but it is said that He will give it soon and will raise the horn of Russian salvation. And there will arise a great prince from your race in exile, who stands for the sons of his people. He will be a chosen one of God, and on his head will be blessing. He will be the only one comprehensible to all, the very heart of Russia will sense him. His appearance will be sovereign and radiant, and nobody will say: ‘The Tsar is here or there’, but all will say: ‘That is him’. The will of the people will submit to the mercy of God, and he himself will confirm his calling. His name has occurred three times in Russian history. Two of the same name have already been on the throne, but not on the Tsar’s throne. But he will sit on the Tsar’s throne as the third. In him will be the salvation and happiness of the Russian realm.”

“Russian hopes will be realized upon [the cathedral of Hagia] Sophia in Tsargrad [Constantinople]; the Orthodox Cross will gleam again; Holy Rus will be filled with the smoke of incense and prayer, and will blossom like a heavenly lily.”

And from one of the most famous saints in Russian history:

St. John of Kronstadt (+1908):

“I foresee the restoration of a powerful Russia, still stronger and mightier than before. On the bones of these martyrs, remember, as on a strong foundation, will the new Russia we built – according to the old model; strong in her faith in Christ God and in the Holy Trinity! And there will be, in accordance with the covenant of the holy Prince Vladimir, a single Church! Russian people have ceased to understand what Rus is: it is the footstool of the Lord’s Throne! The Russian person must understand this and thank God that he is Russian.”

“The Church will remain unshaken to the end of the age, and a Monarch of Russia, if he remains faithful to the Orthodox Church, will be established on the Throne of Russia until the end of the age.”

What may surprise those in the West is that there are a great many people in Russia and in Orthodox Christian countries in general who take these prophecies quite seriously.

Interestingly enough, when the idea of restoring the monarchy was brought to President Putin’s attention, he regarded the idea as “beautiful” according to Lt. General Leonid Reshetnikov, but also expressed concern that it would lead to stagnation within the country.

A second statement, this one by Kremlin spokesman Dmitry Peskov, noted that President Putin does not like the idea of bringing back the monarchy, but offered no comment on the conversation with Mr. Reshetnikov.

The idea of restoring the monarchy is not completely absurd. Britain overthrew its own monarchy in 1649 during that country’s Civil War, but it was restored shortly afterwards under King Charles II. Spain cast aside its monarchy in 1931, with its king, Alfonso XIII going into exile, but after sixteen years this monarchy, too, was restored.

Both of these monarchies have become largely ceremonial, with most governing functions carried out through some kind of Parliament and Prime Minister. It is therefore not clear what a ruling monarchy in Russia would look like.

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US confirms pullout from INF treaty, Moscow will respond if missiles placed in Europe – deputy FM

Moscow will respond to possible attempts to place short and intermediate range nuclear-capable missiles in Europe if the US decides to go on with this plan.

RT

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Via RT…


Washington has confirmed its decision to withdraw from the INF treaty is final, Russia’s deputy foreign minister said, adding that Moscow will ‘take measures’ if American missiles that threaten its security are placed in Europe.

“Washington publicly announced its plans to withdraw from the treaty (the Intermediate-Range Nuclear Forces) already in October. Through the high-level bilateral channels it was confirmed to us that this decision was final and wasn’t an attempt to initiate dialogue,” Sergey Ryabkov told the Kommersant newspaper.

The Deputy FM said that Moscow will respond to possible attempts to place short and intermediate range nuclear-capable missiles in Europe if the US decides to go on with this plan.

“We’ll be forced to come up with effective compensating measures. I’d like to warn against pushing the situation towards the eruption of new ‘missile crises.’ I am convinced that no sane country could be interested in something like this,” he said.

Russia isn’t threatening anybody, but have the necessary strength and means to counter any aggressor.
Back in October, President Donald Trump warned that Washington was planning unilateral withdrawal from the Intermediate-Range Nuclear Forces (INF) treaty because “Russia has not adhered to the agreement.” The US leader also promised that the country would keep boosting its nuclear arsenal until Russia and China “come to their senses.”

Earlier this month, US Secretary of State Mike Pompeo announced that Washington will suspend its obligations under the treaty within 60 days if Russia does not “return to compliance.”

Signed in late 1988, the INF agreement was considered a milestone in ending the arms race between the US and the USSR.

In recent years, Moscow and Washington have repeatedly accused each other of violating the INF deal. While the US has alleged that Russia has developed missiles prohibited by the treaty, Russia insists that the American anti-missile systems deployed in Eastern Europe can actually be used to launch intermediate-range cruise missiles.

The deputy FM said that Washington “never made a secret” of the fact that its INF treaty pullout “wasn’t so much about problems between the US and Russia, but about the desire of the Americans to get rid of all restrictions that were inconvenient for them.”

The US side expressed belief that the INF deal “significantly limits the US military’s capabilities to counter states with arsenals of medium-range and shorter-range ground-based missiles,” which threaten American interests, he said. “China, Iran and North Korea” were specifically mentioned by Washington, Ryabkov added.

“I don’t think that we’re talking about a new missile crisis, but the US plans are so far absolutely unclear,” Mikhail Khodarenok, retired colonel and military expert, told RT, reminding that the Americans have avoided any type of “meaningful discussion” with Moscow in regards to its INF deal pullout.

While “there’ll be no deployment of [US missiles] in Europe any time soon,” Moscow should expect that Washington would try to void other agreements with Russia as well, Khodarenok warned.

The INF deal “just stopped being beneficial for the US. Next up are all the other arms control treaties. There’ll be no resistance from the NATO allies [to US actions],” he said.

“The neocons who run Trump’s foreign policy never have liked arms reduction treaties,” former Pentagon official Michael Maloof told RT. “The new START treaty which comes up for renewal also could be in jeopardy.”

“The risk of a new nuclear buildup is really quite obvious” if the US withdrawals from the INF treaty, Dan Smith, the director of the Stockholm International Peace Research Institute, told RT.

“I think the relations between the great powers – the US and Russia as well as the US and China – are more difficult than they’ve been for a long time,” he added.

However, with Washington having indicated that it wants China to be part of the new deal, “there are still possibilities for negotiations and agreement,” according to Smith. Nonetheless, he warned that following this path will demand strong political will and tactical thinking from the leadership of all three countries.

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US Pressures Germany To Ditch Huawei Over ‘Security Concerns’

This news will likely not go over well in Beijing, which is still struggling with the US and Canada over the arrest of Huawei CFO Meng Wanzhou in Vancouver.

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Via Zerohedge


First it was Australia, New Zealand and Japan, now the US is pressing the German government to refuse to use equipment manufactured by Chinese telecom giant Huawei as Europe’s largest economy seeks to build out its 5G infrastructure.

According to Bloomberg, a US delegation met on Friday with German Foreign Ministry officials in Berlin to talk about the security risks presented by Huawei’s equipment, which the US says is vulnerable to spying. The meeting in Germany follows a report from late last month claiming the US had launched an “extraordinary outreach campaign” to warn its allies against using Huawei equipment (while its vulnerability to Chinese spying has been cited as the reason to avoid Huawei, it’s also worth noting that the US and China are locked in a battle for who will dominate the global 5G space…a battle that Huawei is currently winning).

Germany is set to hold an auction early next year to find a supplier to help expand its 5G network. The Berlin meeting took place one day after Deutsche Telekom said it would reexamine its decision to use Huawei equipment.

US officials are optimistic that their warnings are getting a hearing, though any detailed talks are in early stages and no concrete commitments have been made, according to one of the people.

The US pressure on Germany underscores increased scrutiny of Huawei as governments grapple with fears that the telecom-equipment maker’s gear is an enabler for Chinese espionage. The Berlin meeting took place a day after German carrier Deutsche Telekom AG said it will re-evaluate its purchasing strategy on Huawei, an indication that it may drop the Chinese company from its list of network suppliers.

France is also reportedly considering further restrictions after adding Huawei products to its “high alert” list. The US has already passed a ban preventing government agencies from using anything made by Huawei. But the telecoms equipment provider isn’t taking these threats to its business lying down.

U.S. warnings over espionage are a delicate matter in Germany. Revelations over the scale of the National Security Agency’s signals intelligence, including reports of tapping Merkel’s mobile phone, are still fresh in Berlin five years after they came to light.

Huawei is pushing back against the accusations. The company’s rotating chairman warned this week that blacklisting the Chinese company without proof will hurt the industry and disrupt the emergence of new wireless technology globally. Ken Hu, speaking at a Huawei manufacturing base in Dongguan, cited “groundless speculation,” in some of the first public comments since the shock arrest of the company’s chief financial officer.

This news will likely not go over well in Beijing, which is still struggling with the US and Canada over the arrest of Huawei CFO Meng Wanzhou in Vancouver. In an editorial published Sunday, the Global Times, an English-language mouthpiece for the Communist Party, warned that China should retaliate against any country that – like Australia – takes a hard line against Huawei. So, if you’re a German citizen in Beijing, you might want to consider getting the hell out of Dodge.

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