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Merkel Nuclear-Tax Blunder Returns to Haunt Her in Election Year
by Rainer Buergin and Brian Parkin

--Court verdict hands Social Democrats election-year ammunition

--6.3 billion-euro budget hole ‘embarrassing,’ Kemfert says

Angela Merkel was forced to revisit a low point of her chancellorship after Germany’s top court threw out a 2011 levy on nuclear operators, handing her opponents a stick to beat her with in an election year.

The ruling on Wednesday exposed a policy blunder by Merkel’s previous government, raised questions about the impact on Germany’s balanced budget and returned attention to the chancellor’s abrupt shift to renewables after the Fukushima nuclear disaster. Critics say she exploited the accident to scrap her unpopular pursuit of atomic power.

Germany’s Social Democrats seized on the verdict as the latest poll showed them trailing Merkel’s party bloc by 15 percentage points ahead of a national election on Sept. 24.

It’s “a resounding slap in the face” for Merkel’s second-term coalition with the Free Democrats, Environment Minister Barbara Hendricks, a Social Democrat, said in a statement. “The fact that this bungle still pays off for the nuclear operators years later makes the verdict of the Federal Constitutional Court a colossal irritation.”

As the court ordered the government to reimburse utilities, Merkel and Finance Minister Wolfgang Schaeuble were left to fill a hole of 6.3 billion euros ($7.1 billion) plus interest in an election-year budget they promised to balance for the fourth time in a row.

Pent-Up Problem

“This was a problem waiting to bounce back on Merkel,” Claudia Kemfert, an economist at the German Institute for Economic Research in Berlin, said by phone. It’s a “costly, embarrassing error” that’s “a blemish on her fiscal and energy legacy,” Kemfert said.

Asked about the fiscal impact, Merkel told reporters in Berlin on Wednesday that “the big goals are not in danger.” The balanced-budget goal remains valid and new borrowing or a supplementary budget won’t be needed, Finance Ministry spokesman Juerg Weissgerber said.

Merkel introduced the nuclear-fuel tax in January 2011 with the blunt reasoning -- stated in the bill’s preamble -- that the government needed the money after boosting spending during the financial crisis of 2008-2009. Some of the revenue was earmarked for repairing a leaking underground nuclear-waste site.

‘Poorly Advised’

Two months later, the Fukushima disaster prompted Merkel’s U-turn. Her Christian Democrat-led bloc and the Free Democrats legislated the shutdown of all German nuclear power plants by 2022, shifting the focus to getting utilities to pay for decommissioning costs. Some 6.28 billion euros in levies were paid by the companies from 2011 to 2016, according to Finance Ministry data.

“If Merkel had told consumers back then, ‘We’re using this money to cut your electricity costs and to help to dispose of nuclear waste safely then it’s hard to take issue with that,” Kemfert said. “But using the money to resuscitate the budget and even saying so shows how poorly advised she was.”

https://www.bloomberg.com/view/articles/2017-06-08/republicans-weren-t-smiling-about-comey-or-trump


NATO Cracks: Germany Withdraws Troops From Turkey's Incirlik Airbase
by Tyler Durden

Two days after Germany's foreign minister Sigmar Gabriel - standing next to his Turkish colleague Mevlut Cavusoglu in Ankara - said his "country has no choice but to begin the process of pulling its forces out of Turkey's Incirlik air force base" as the Turkish government will not allow all German lawmakers to visit troops there, Germany followed through on its threat and on Wednesday, the German Cabinet backed the withdrawal of the country's troops from Incirlik air base in Southern Turkey.

The decision was announced on Wednesday by Defense Minister Ursula von der Leyen after a lengthy and often bitter diplomatic impasse over the visits, raising friction between the NATO allies and according to some, putting the fate of the alliance in jeopardy.

Germany now plans to redeploy the 280 military personnel stationed at Incirlik, along with surveillance planes and refueling jets to an air base in Jordan. However, it stressed it wants to minimize any disruption to the US-led coalition operation against ISIS. In light of the complete failure in diplomatic relations between the two member nations, that may be problematic.

Since foreign deployments in Germany require parliamentary approval, German lawmakers are still discussing whether the proposed withdrawal should be put to a parliamentary vote.

Von der Leyen said she would hold immediate talks with the US army and the US-led coalition fighting ISIL to minimise the impact of the move, and also brief the cabinet and parliament next week. However, to avoid giving an impression that NATO is crumbling, German Chancellor Angela Merkel said talks would continue with Turkey even after troops leave the air base.

"We have a huge range of common interests with Turkey, and also close economic relations," she told reporters after the decision.

"Discussions are very necessary". Yes they are, the only problem is that as today's announcement revealed, they lead nowehere.

The withdrawal process of refueling aircrafts would take about two to three weeks and the relocation of reconnaissance jets, two to three months.

German Foreign Minister Sigmar Gabriel visited Turkey on Monday, in a last attempt to convince Ankara to avert a pullout, however Turkey had once again refused the visits for "domestic political reasons". He said he wanted to avoid further hurting ties with Turkey and pushing it towards Russia.

As discussed on Monday, Turkey was infuriated over German authorities' decision to grant asylum to soldiers and other individuals that Turkey accuses of participating in a failed coup attempt last July. Relations were further tested when Germany, citing security concerns, banned some Turkish politicians from campaigning on its soil as well as Turkey's jailing of two German journalists.

Taking a word from Hillary Clinton's dictionary, earlier this month, Merkel called Turkey’s stance on visits to Incirlik “deplorable” and warned Germany may move the warplanes based there to a location outside Turkey, possibly Jordan. Which is precisely what it has now done.

It was not clear if other NATO members would join Germany and pull their forces from the strategic airbase in sympathy.

http://www.zerohedge.com/news/2017-06-07/nato-cracks-germany-withdraws-troops-turkeys-incirlik-airbase
 

Deutsche Bank fails to provide Trump-Russia details, Democratic aide says
The Guardian

Germany’s largest bank offers no ‘substantive’ reply to House Democrats’ letter seeking information on loans for Trump’s real estate business

Germany’s largest bank has failed to respond to a request from Democrats on a House of Representatives panel for details about Donald Trump’s possible ties to Russia, a Democratic staffer said on Sunday.

Several Democrats on the House financial services committee sent a letter last month to John Cryan, chief executive officer of Deutsche Bank, seeking details that might show if loans for Trump’s real estate business were backed by the Russian government.

The letter asked for details of internal reviews of Trump’s transactions and gave the prominent German bank until Friday to respond. The bank’s response did not address any of the questions posed in the letter and its Frankfurt headquarters declined to comment, as it has in the past.

“Deutsche Bank’s outside counsel has confirmed receipt of our 23 May 2017 letter but did not provide substantive responses to our requests,” a Democratic member of the staff told Reuters in an email on condition of anonymity.

The congressional inquiry is also seeking information about a Russian “mirror trading” scheme that allowed $10bn to flow out of Russia.

“Congress remains in the dark on whether loans Deutsche Bank made to President Trump were guaranteed by the Russian government or were in any way connected to Russia,” the Democrats wrote in their request to Deutsche Bank.

“It is critical that you provide this committee with the information necessary to assess the scope, findings and conclusions of your internal reviews.”

The Democrats cannot compel Deutsche Bank to hand over the information. The House committee has the power to subpoena the documents but Republican committee members – who make up the majority of the panel – would have to cooperate. No Republicans signed the document request.

Citing media reports, the Democrats called for the bank to hand over any documents tied to internal reviews of Trump’s personal accounts at the bank. They also said the bank should state publicly that it had reviewed both the “mirror trading” scheme and Trump’s accounts.

Mirror trading involved buying stocks, for example, in Moscow in rubles, with related parties selling the same stocks shortly thereafter through a bank’s London branch.

Trump is mired in controversy over FBI and congressional investigations into alleged Russian meddling in the 2016 presidential election and potential collusion between Moscow and the Trump campaign. Moscow has denied the allegations, and Trump has denied any collusion.

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