Economy

Europe's Superpower: Germany Is The New Indispensable (And Resented) Nation

Op-Ed: The euro zone can't survive intact without Germany. And yet the more Europeans count on Germany, the quicker they are to criticize. Germany may now be to Europe what the United States has long been to the rest of the world: the powerhouse

Clemens Wergin

BERLIN -- The Germans are becoming the favorite scapegoat for the euro crisis. Damned if they do, damned if they don't. For years, op-eds in Germany and around the world called for Germany to step up and take a leadership role in the currency crisis. Now that Chancellor Angela Merkel has done just that, it turns out that's not right either.

In the United Kingdom, some commentators wax delirious about the "Fourth Reich" that Berlin has supposedly established in Europe. The basic gist of this argument is that what the Germans didn't achieve in two world wars they are now achieving with the help of the euro crisis: dominance at the heart of Europe.

The Junkers and Barrosos of the world are ticked off because Merkel isn't up for paying all of the euro zone's unpaid bills, and has also voiced a certain amount of skepticism about European institutions that failed to prevent the crisis and are not proving to be particularly creative in solving it.

Germanophobia is also spreading in France due to the supposed dim-witted Germans' insistence on sticking to a couple of principles about the stability of the currency. If the situation weren't so deadly serious, this might cause a wry smile or two about the irony of history. The irony is that the Germans, who have been fairly obvious about their anti-Americanism over the last decade or so, are now finding out what it feels like to be the lead – and unloved -- player.

Germany is becoming the America of Europe

In Europe, Germany is in the process of becoming what the United States is to the world: the leading power whose every move is examined microscopically. Others are increasingly expecting more problem-solving skill (and will) than Berlin is prepared to give; yet at the same time, Germany awakens much resentment.

And it serves the Germans right. Because looking into the mirror of Europe they find themselves confronted by their own ambivalent expectations of the United States. The patterns are exactly the same.

For decades, the Germans have been skateboarding around on the safety net that the United States spread across Europe and the world. Like many other Europeans, for decades they have not been contributing their fair share to the maintenance of that net.

And yet Germany wants to be a part of the conversation, play an influential role -- and then whatever the Americans finally do isn't exactly what they had in mind. Which doesn't stop them from grandly overlooking their own failures: the training of police officers in Afghanistan springs to mind.

One thing's for sure: the Americans could always have done better. This assumption comes as naturally as the inclination not to get one's own hands dirty. In security matters, the Europeans are like cranky old critics from the Muppets. They sit on the sidelines and provide commentary about what's going on, while the Americans and their hard power are out there doing, with more or less success.

This pathological relationship to the West's leading nation is now being stood on its head. Suddenly it's the Germans everybody wants a solution from. And when Germany does offer up ideas, they are criticized as inadequate.

What European countries would like best, regardless of whether or not they are in the euro zone, is for Germany to cough up the cash – but without the right to establish any conditions, which would be seen as Germany bullying the rest of Europe.

The picture earlier looked like this: American taxpayers were supposed to bear the brunt of paying for NATO, but everybody wanted a say in how NATO would actually be used. Within Europe today, the attitude is: the Germans should pay without setting any demands, because if they did that they would be playing an ugly "dominance" card.

Europe is currently developing a love-hate relationship with Germany that is very similar to the one Germans feel for the United States. Germany is the "indispensable nation" at the heart of the euro zone, the one without which nothing works. Without Germany, there's no way to even contemplate a euro zone rescue. It's in realizing this that the rest of Europe reacts with denial and rejection.

Germans always resented that the Americans not only rescued them from the Nazis but then built German democracy. Something similar can be expected out of the present euro saga, as regards Germany.

Even if the Germans should succeed in stemming the crisis, the rest of Europe won't forgive them because that would mean recognizing just how dependent they are on Germany. So let's not expect any thanks. All the more reason to make sure that the interests of the German taxpayer don't get subsumed by all the crisis management.

Read the original story in German

Photo - hmboo

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Future

How China Flipped From Tech Copycat To Tech Leader

Long perceived as a country chasing Western tech, China's business and technological innovations are now influencing the rest of the world. Still lagging on some fronts, the future is now up for grabs.

At the World Semiconductor Conference in Nanjing, China, on June 9

SIPA Asia/ZUMA
Emmanuel Grasland

BEIJING — China's tech tycoons have fallen out of favor: Jack Ma (Alibaba), Colin Huang (Pinduoduo), Richard Liu (Tencent) and Zhang Yiming (ByteDance) have all been pressured by Beijing to leave their jobs or step back from a public role. Their time may be coming to an end, but the legacy remains exceptional. Under their reign, China has become a veritable window to the global future of technology.

TikTok is the perfect example. Launched in 2016, the video messaging app has been downloaded over two billion times worldwide. It has passed the 100-million active user mark in the United States. Thanks to TikTok's success, ByteDance, its parent company, has reached an exceptional level of influence on the internet.


For a long time, the West viewed China's digital ecosystem as a cheap imitation of Silicon Valley. The European and American media described the giants of the Asian superpower as the "Chinese Google" or "Chinese Amazon." But the tables have turned.

No Western equivalent to WeChat

The Asian superpower has forged cutting-edge business models that do not exist elsewhere. It is impossible to find a Western equivalent to the WeChat super-app (1.2 billion users), which is used for shopping as much as for making a medical appointment or obtaining credit.

The flow of innovation is now changing direction.

The roles have actually reversed: In a recent article, Les Echos describes the California-based social network IRL, as a "WeChat of the Western world."

Grégory Boutté, digital and customer relations director at the multinational luxury group Kering, explains, "The Chinese digital ecosystem is incredibly different, and its speed of evolution is impressive. Above all, the flow of innovation is now changing direction."

This is illustrated by the recent creation of "live shopping" events in France, which are hosted by celebrities and taken from a concept already popular in China.

10,000 new startups per day

There is an explosion of this phenomenon in the digital sphere. Rachel Daydou, Partner & China General Manager of the consulting firm Fabernovel in Shanghai, says, "With Libra, Facebook is trying to create a financial entity based on social media, just as WeChat did with WeChat Pay. Facebook Shop looks suspiciously like WeChat's mini-programs. Amazon Live is inspired by Taobao Live and YouTube Shopping by Douyin, the Chinese equivalent of TikTok."

In China, it is possible to go to fully robotized restaurants or to give a panhandler some change via mobile payment. Your wallet is destined to be obsolete because your phone can read restaurant menus and pay for your meal via a QR Code.

The country uses shared mobile chargers the way Europeans use bicycles, and is already testing electric car battery swap stations to avoid 30 minutes of recharging time.

Michael David, chief omnichannel director at LVMH, says, "The Chinese ecosystem is permanently bubbling with innovation. About 10,000 start-ups are created every day in the country."

China is also the most advanced country in the electric car market. With 370 models at the end of 2020, it had an offering that was almost twice as large as Europe's, according to the International Energy Agency.

Photo of a phone's screen displaying the logo of \u200bChina's super-app WeChat

China's super-app WeChat

Omar Marques/SOPA Images/ZUMA

The whole market runs on tech

Luca de Meo, CEO of French automaker Renault, said in June that China is "ahead of Europe in many areas, whether it's electric cars, connectivity or autonomous driving. You have to be there to know what's going on."

As a market, China is also a source of technological inspiration for Western companies, a world leader in e-commerce, solar, mobile payments, digital currency and facial recognition. It has the largest 5G network, with more than one million antennas up and running, compared to 400,000 in Europe.

Self-driving cars offer an interesting point of divergence between China and the West.

Just take the number of connected devices (1.1 billion), the time spent on mobile (six hours per day) and, above all, the magnitude of data collected to deploy and improve artificial intelligence algorithms faster than in Europe or the United States.

The groundbreaking field of self-driving cars offers an interesting point of divergence between China and the West. Artificial intelligence guru Kai-Fu Lee explains that China believes that we should teach the highway to speak to the car, imagining new services and rethinking cities to avoid cars crossing pedestrians, while the West does not intend to go that far.

Still lagging in some key sectors

There are areas where China is still struggling, such as semiconductors. Despite a production increase of nearly 50% per year, the country produces less than 40% of the chips it consumes, according to official data. This dependence threatens its ambitions in artificial intelligence, telecoms and autonomous vehicles. Chinese manufacturers work with an engraving fineness of 28 nm or more, far from those of Intel, Samsung or TSMC. They are unable to produce processors for high-performance PCs.

China's aerospace industry is also lagging behind the West. There are also no Chinese players among the top 20 life science companies on the stock market and there are doubts surrounding the efficacy of Sinovac and Sinopharm's COVID-19 vaccines. As of 2019, the country files more patents per year than the U.S., but far fewer are converted into marketable products.

Beijing knows its weaknesses and is working to eliminate them. Adopted in March, the nation's 14th five-year plan calls for a 7% annual increase in R&D spending between now and 2025, compared with 12% under the previous plan. Big data aside, that is basic math anyone can understand.

https://www.lesechos.fr/idees-debats/editos-analyses/la-chine-est-desormais-une-fenetre-sur-notre-futur-1347064
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