A bulldozer transports residents in Zhengzhou, China, after record rainfall displaced one million people in the are

Welcome to Tuesday, where the first person charged under Hong Kong's national security law is found guilty, the final victim of the Miami building collapse is identified, and Tesla reports skyrocketing profits. Meanwhile, The Conversation offers a deep dive into the Australia vs. UNESCO spat over the decision to list the Great Barrier Reef as "in danger."

• First person charged under national security law: The first person charged and tried under Hong Kong's national security law, 24-year old Tong Ying-kit, has been found guilty of terrorism and inciting secession. This landmark case came out a year after the law, imposed by Beijing, was implemented.

• Tunisian president accused of staging coup: After suspending parliament and sacking Prime Minister Hichem Mechichi, President Kaid Saied has also removed the defense minister and acting justice minister from their posts. He imposed a month-long curfew and banned public gatherings, moves that critics describe as a coup.

• South and North Korea restore hotline: South and North Korea have restored hotlines, a year after Pyongyang severed them. South Korean President Moon Jae-in and North Korean leader Kim Jong-un have exchanged multiple letters since April and agreed to restore relations.

• COVID-19 update: Australia's Victoria state may lift its current lockdown but neighboring New South Wales, which includes Sydney, faces an extension as daily cases are spiking. The U.S. has said it will not lift any travel restrictions, in place since early 2020, due to concerns over the Delta variant and the rising number of cases within the the country/ Meanwhile, India has reported 29,689 new cases, its lowest since March.

• Final victim of the Miami building collapse identified: Authorities have identified the final victim of the Miami Surfside collapse, thereby ending a month-long search and recovery operation. A total of 242 people are accounted for, according to Miami Dade Mayor Daniella Levine Cava.

• Naomi Osaka surprise Olympics exit: The 23-year-old Japanese tennis player Naomi Osaka suffered an unforeseen exit in the Olympics after Marketa Vondrousova of the Czech Republic earned a straight-set victory in Tokyo. Osaka, born in Japan, lit the Olympic cauldron to officially open the games and was considered one of the event's biggest local stars.

• Britney Spears asking for new conservator: An attorney for Britney Spears has asked that a new conservator be named to oversee the singer's finances, following allegations that her father, her current conservator, had used the arrangement to mistreat her. Her lawyer requested that accountant Jason Rubin be named conservator of Spears' estate instead.


Tunisian daily Assabah reports on the decision by President Kaid Saied to fire Prime Minister Hichem Mechichi and suspend parliament. The leader argued his actions were not a suspension of the constitution.


$1.1 billion

Tesla has reported a record $1.1 billion as its second quarter net income — more than twice what the company earned in the first quarter. But there's also concern that the company's current success could be derailed in the future due to an ongoing chip and battery shortage.


What is the true risk level for the Great Barrier Reef?

The World Heritage Centre of UNESCO recently revealed its draft decision to list the Great Barrier Reef as "in danger" — a decision that appeared to shock the Australian government.

Environment Minister Sussan Ley suggested UNESCO's decision was a surprise and was politically motivated. In an analysis for The Conversation, Terry Hughes, Jon C. Day and Ove Hoegh-Guldberg look at Australia's reaction so far, and why criticisms of UNESCO's draft decision don't stack up.

Ley worries that the the proposed in-danger listing will have a negative effect on reef tourism. However, there's no evidence from the Galapagos Islands, the Belize Barrier Reef or the Everglades National Park — all World Heritage sites and tourism hotspots — that an in-danger listing led to any discernible impacts on tourist numbers. Most tourists, international or domestic, are already well aware of the pressures facing the Great Barrier Reef, but they are still keen to see it. From 2015–2018, more than 2 million visitors each year used a tourism operator to visit the reef.

Ley also claimed that Australia, and the reef, didn't deserve to be the poster child for climate change perils. But why can't they be? The Great Barrier Reef is one of the most obvious examples of the costs of inaction on anthropogenic climate change. The Great Barrier Reef was inscribed as a World Heritage Area in 1981, and for the past two decades Australia has meticulously documented its ongoing deterioration.

The environment minister also suggests that Australia is doing everything it can to protect the reef — but is it really? UNESCO certainty doesn't think so. The UN agency's draft decision noted that interventions to reduce inshore pollution over the past five years have been "largely deficient." UNESCO also cites Australia's poor progress on reducing emissions as an additional area requiring considerable improvement, to meet the objectives of the Paris Agreement.

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Nobody is going to declare ‘mission accomplished".

— A senior administration official told reporters, as U.S. President Joe Biden and Iraqi Prime Minister Mustafa al-Kadhimi formally sealed an agreement to end the U.S. combat mission in Iraq by the end of 2021. "The goal is the enduring defeat of ISIS," he added.

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Economy

Merkel's Legacy: The Rise And Stall Of The German Economy

How have 16 years of Chancellor Angela Merkel changed Germany? The Chancellor accompanied the country's rise to near economic superpower status — and then progress stalled. On technology and beyond, Germany needs real reforms under Merkel's successor.

Chancellor Angela Merkel looks at the presentation of the current 2 Euro commemorative coin ''Brandenburg''

Daniel Eckert

BERLIN — Germans are doing better than ever. By many standards, the economy broke records during the reign of outgoing Chancellor Angela Merkel: private households' financial assets have climbed to a peak; the number of jobs recorded a historic high before the pandemic hit at the beginning of 2020; the GDP — the sum of all goods and services produced in a period — also reached an all-time high.

And still, while the economic balance sheet of Merkel's 16 years is outstanding if taken at face value, on closer inspection one thing catches the eye: against the backdrop of globalization, Europe's largest economy no longer has the clout it had at the beginning of the century. Germany has fallen behind in key sectors that will shape the future of the world, and even the competitiveness of its manufacturing industries shows unmistakable signs of fatigue.

In 2004, a year before Merkel was first elected Chancellor, the British magazine The Economist branded Germany the "sick man of Europe." Ironically, the previous government, a coalition of center-left and green parties, had already laid the foundations for recovery with some reforms. Facing the threat of high unemployment, unions had held back on wage demands.

"Up until the Covid-19 crisis, Germany had achieved strong economic growth with both high and low unemployment," says Michael Holstein, chief economist at DZ Bank. However, it never made important decisions for its future.

Another economist, Jens Südekum of Heinrich Heine University in Düsseldorf, offers a different perspective: "Angela Merkel profited greatly from the preparatory work of her predecessor. This is particularly true regarding the extreme wage restraint practiced in Germany in the early 2000s."

Above all, Germany was helped in the first half of the Merkel era by global economic upheaval. Between the turn of the millennium and the 2011-2012 debt crisis, emerging countries, led by China, experienced unprecedented growth. With many German companies specializing in manufacturing industrial machines and systems, the rise of rapidly industrializing countries was a boon for the country's economy.

Germany dismissed Google as an over-hyped tech company.

Digital competitiveness, on the other hand, was not a big problem in 2005 when Merkel became chancellor. Google went public the year before, but was dismissed as an over-hyped tech company in Germany. Apple's iPhone was not due to hit the market until 2007, then quickly achieved cult status and ushered in a new phase of the global economy.

Germany struggled with the digital economy, partly because of the slow expansion of internet infrastructure in the country. Regulation, lengthy start-up processes and in some cases high taxation contributed to how the former economic wonderland became marginalized in some of the most innovative sectors of the 21st century.

Volkswagen's press plant in Zwickau, Germany — Photo: Jan Woitas/dpa/ZUMA

"When it comes to digitization today, Germany has a lot of catching up to do with the relevant infrastructure, such as the expansion of fiber optics, but also with digital administration," says Stefan Kooths, Director of the Economic and Growth Research Center at the Kiel Institute for the World Economy (IfW Kiel).

For a long time now, the country has made no adjustments to its pension system to ward off the imminent demographic problems caused by an increasingly aging population. "The social security system is not future-proof," says Kooths. The most recent changes have come at the expense of future generations and taxpayers, the economist says.

Low euro exchange rates favored German exports

Nevertheless, things seemed to go well for the German economy at the start of the Merkel era. In part, this can be explained by the economic downturn caused by the euro debt crisis of 2011-2012. Unlike in the previous decade, the low euro exchange rate favored German exports and made money flow into German coffers. And since then-European Central Bank president Mario Draghi's decision to save the euro "whatever it takes" in 2012, this money has become cheaper and cheaper.

In the long run, these factors inflated the prices of real estate and other sectors but failed to contribute to the future viability of the country. "With the financial crisis and the national debt crisis that followed, economic policy got into crisis mode, and it never emerged from it again," says DZ chief economist Holstein. Policy, he explains, was geared towards countering crises and maintaining the status quo. "The goal of remaining competitive fell to the background, as did issues concerning the future."

In the traditional field of manufacturing, the situation deteriorated significantly. The Institut der Deutschen Wirtschaft (IW), which regularly measures and compares the competitiveness of industries in different countries, recently concluded that German companies have lost many of the advantages they had gained. The high level of productivity, which used to be one of the country's strengths, faltered in the years before the pandemic.

Kooths, of IfW Kiel, points out that private investment in the German economy has declined in recent years, while the "government quota" in the economy, which describes the amount of government expenditure against the GDP, grew significantly during Merkel's tenure, from 43.5% in 2005 to 46.5% in 2019. Kooths concludes that: "Overall, the state's influence on economic activity has increased significantly."

Another very crucial aspect of competitiveness, at least from the point of view of skilled workers and companies, has been neglected by German politics for years: taxes and social contributions. The country has among the highest taxes on income in Europe, and corporate taxes are also hardly as high as in Germany anywhere in the industrialized world. "In the long run, high tax rates always come at the expense of economic dynamism and can even prevent new companies from being set up," warns Kooths.

Startups can renew an economy and lay the foundation for future prosperity. Between the year 2000 and the Covid-19 crisis, fewer and fewer new companies were created every year. Economists from left to right are unanimous: Angela Merkel is leaving behind a country with considerable need for reform.

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