During the 35th-anniversary celebration of German Unity on October 3rd, Chancellor Friedrich Merz called for national unity but delivered a stark warning: Germans must prepare for austerity to secure the country’s future.

Merz argued that Germany is „under attack“ from external and internal threats, requiring a major increase in defense capacity. To finance this, he warned that social promises would be „more difficult to uphold than they have been in the past,“ effectively signaling cuts to the social welfare system. He stressed citizens must „make a little more effort,“ tying economic sacrifice directly to national defense and stability, while also citing „irregular, uncontrolled migration“ as a source of domestic polarization.

To know more about it, visit the European Conservative official website.

President Trump’s decision to impose a $100,000 fee on employers applying for new H-1B visas has rattled Silicon Valley, where companies warn of an exodus of international talent. Forbes reports that European AI startups could be unexpected winners, suddenly in a stronger position to attract engineers, researchers, and founders discouraged by U.S. barriers. The development highlights how shifting immigration policy in Washington can reconfigure the global tech race. Germany, with its deep-tech ecosystem and demand for skilled talent, stands to benefit if it can streamline its own visa pathways and innovation incentives.

Read the full story on Forbes.

Germany’s parliament has passed the 2025 budget, allowing €116 billion in investments supported by a €500 billion infrastructure fund and special exemptions for defence spending. Finance Minister Lars Klingbeil called it a “huge paradigm shift,” aimed at boosting the economy and strengthening military support commitments to NATO and Ukraine. Defence spending will rise to 2.4% of GDP, though still below NATO’s new 3.5% target.

The total budget reaches €591 billion, combining core spending and special funds, with total borrowing projected at €143.2 billion. Chancellor Friedrich Merz’s coalition now faces challenging discussions for future budgets, including a €30 billion gap projected for 2027. Parliament will debate the 2026 draft next week. Read more on Reuters.

Between August 31 and September 1, 2025, the Shanghai Cooperation Organization (SCO) summit in Tianjin, China, and the subsequent WWII commemorative parade in Beijing showcased China’s rising diplomatic and strategic influence. Chinese President Xi Jinping, and Russian President Vladimir Putin projected unprecedented warmth, while Pakistan leveraged the summit to advance security concerns and bilateral ties with China, Iran, and Russia. The summit saw agreements on the SCO Development Bank, four new security centers, and cooperation in energy, capacity building, and the green and digital economies. Although the tangible outcomes remain limited, this week allowed China to assert global leadership, manage its partnership with Russia, and signal a multipolar world beyond traditional US-led frameworks. For a more in-depth analysis, read the full analysis by Stimson Center.

Recent data reveals that Europe’s trade landscape in 2025 is marked by robust exports ($2.18 trillion) and imports ($2.11 trillion) in Q1, with the EU holding over a third of global trade share. Agricultural exports grew by 3%, while imports soared 20%, signaling strong demand amid fluctuating commodity prices. The EU’s goods trade surplus has jumped to $191 billion, bolstered by resilient sectors like chemicals and manufacturing, while increased rail freight volume suggests diversified trade routes. Despite ongoing risks from US tariffs, climate regulations, and geopolitical tensions, Europe is positioned to leverage policy reforms, sustainable practices, and technology advancements to maintain its strategic autonomy and emerge as a leader in clean, smart global trade. Explore more detailed insights on TradeImeX.

The 17th BRICS Summit in Rio de Janeiro (July 2025) underscored the bloc’s push for multilateralism, international law, and a fairer global order. With 11 members including newcomers Indonesia, Egypt, Ethiopia, Iran, and the UAE—plus nine partners, leaders adopted a Joint Declaration with 126 commitments on hunger eradication, climate action, technology, peace, and security. Key economic outcomes included calls to reform IMF quotas and expand emerging economies’ role in global finance. The summit also condemned U.S. and Israeli military actions in Iran and Gaza, while backing peace efforts in Syria and Sudan. Read the takeaways and projections on the Stimson Center website.

Germany and Kenya’s migration agreement, signed in September 2024, sets up new legal pathways for skilled Kenyan workers, trainers, and students to move to Germany, while Kenya agrees to facilitate the repatriation of Kenyan nationals, including those with expired documents. Lauded as a win-win initiative, the pact reflects Germany’s pressing need to address its labor shortages amid demographic changes, and Kenya’s efforts to create opportunities for its youthful population, much of which faces unemployment. The deal exemplifies a blend of humanitarian rhetoric and realpolitik, offering coordinated, regulated migration and return procedures. Read more on Diplomacy Berlin’s website.

Windfall effects amounting to €2.8 billion annually—that’s the estimate from the Cologne Institute for Economic Research (IW Köln) on the Active Pension, one of the Union’s central pension policy proposals during the federal election campaign. However, during the campaign, it was always argued that the Active Pension would motivate people to work more. But is that really realistic? The available data suggest that work motives are primarily not financial in nature. The Active Pension is part of the current pension package. Its implementation is essentially a done deal. I’m curious to see whether the debate will gain momentum again. The analysis was written for IW Köln by Martin Beznoska, Ruth Schüler, and Stefanie Seele. You can read it on the institute’s website.

The European Commission’s proposal for the EU budget from 2028 to 2034 is now on the table. The Jacques Delors Centre (Hertie School) has analyzed the document and outlined the aspects that will shape the debate. The key issues are more flexibility for the Commission and the Member States in how funds are used, and the introduction of additional EU taxes. I find the latter particularly interesting, because this is where real fundamental questions arise. Is the Carbon Border Adjustment Mechanism (CBAM) a good idea, or is it harmful to the economy? If it turns out to be harmful, it would be disastrous to cement it in place just because of its importance for the EU budget. A similar issue exists with the planned tobacco tax. Higher tobacco taxes strengthen organized crime, since they make it more attractive for consumers to buy untaxed products. You can find the policy brief on the Hertie School’s website.

The 2025 US-EU trade deal, announced by President Donald Trump and European Commission President Ursula von der Leyen, sets a 15% tariff on nearly all EU exports to the US, including automobiles and manufactured goods, significantly lower than the previously threatened 30%. Key sectors like pharmaceuticals, semiconductors, timber, and copper will see phased tariff reductions, while tariffs on steel and aluminium remain at 50%, with plans to transition to a quota system. The EU commits to purchasing $750 billion in US energy products over three years and investing $600 billion in the US by 2029. The deal aims to reduce trade tensions and provide stability, but has faced criticism in Europe for its asymmetric terms that may impact EU competitiveness, particularly affecting German industries. For more details, see the full Reuters coverage here.

Rüdiger Bachmann has once again delivered. In a powerful report for the Kiel Institute for the World Economy (IfW Kiel), he dissects Trumpism into its components, traces the economic development of the USA since Donald Trump took office, and urges Europeans and Germans to say goodbye to transatlanticism. The report was published before the announcement of the tariff deal. It very clearly shows that the only reliable element of the American government is its unreliability. I especially liked the chapter “Internet egdelordism, machismo, and incelism.” You can find the report on the Institute’s website.

The 25th EU-China summit, held on 24 July 2025 in Beijing to mark 50 years of diplomatic relations, brought together EU leaders António Costa, Ursula von der Leyen, and Kaja Kallas with Chinese President Xi Jinping and Premier Li Qiang. The discussions covered bilateral relations, global challenges like climate change, and geopolitical issues. Although both sides committed to deepening cooperation on climate and multilateralism, the EU stressed the need for concrete progress on trade imbalances, market access, and fair economic relations built on reciprocity. The EU urged China to refrain from supporting Russia’s war in Ukraine and to promote peace based on international law. Human rights concerns and regional security issues, including tensions in the Taiwan Strait, were also reiterated by EU leaders. For full details, see the EU press release on the 25th EU-China summit.

Staffbase, a company that offers digital solutions for employee communication, conducted a worldwide survey on this topic together with YouGov. What I find interesting is that non-desk employees are much harder to reach, which is basically common sense. We should think much more about how our information/messages are received by different target groups. Another notable point is that crisis communication from their own company is rated better than everyday internal communication. The message is simple: it is always worth communicating actively—even in politics. In the survey—linked above is the summary by Philipp Scherber as well as the full study—you can learn which communication channels work best.

Transatlantic economic ties now pivot as much on services as on goods, with digitally delivered sectors like intellectual property, business, and IT growing rapidly sometimes outpacing traditional goods trade, yet remaining undervalued in public debate and policy negotiations. The U.S. consistently runs a services trade surplus with the EU (€109 billion in 2023, according to Eurostat), driven by American strengths in finance, tech, and IP, while Europe’s goods trade surplus (€157 billion in 2023) reflects its industrial base. Despite some data discrepancies, the overall transatlantic trade relationship is remarkably balanced, with the difference between EU and U.S. exports standing at just 3% of total trade in 2023. The Kiel Institute Policy Brief No. 193 argues for reducing intra-EU services barriers, using services as a diplomatic tool in EU-U.S. talks, and, if necessary, deploying strategic measures like digital taxes or privacy rules emphasizing that services are now central to competitiveness, innovation, and the resilience of the transatlantic alliance. For the full analysis, see the Kiel Institute’s policy brief (PDF).

Negotiations between the EU and the US on tariffs are intensifying. The trade imbalance disadvantaging Europe regarding services trade is repeatedly mentioned in the debate. This accounts for about three-quarters of the US deficit in goods trade. However, whether the EU will quickly agree on implementing a digital tax / digital tariff is questionable, as unanimity is required. Since most digital services are routed through Ireland, Ireland’s approval would be surprising. It is worthwhile to read the current study by Frank Bickenbach, Holger Görg, and Wan-Hsin Liu for the Kiel Institute for the World Economy.

A team from the IAB Institute, using the Greenness of Jobs Index (GOJI), found that companies with sustainable business models (“green skills”) have an advantage in the competition for skilled workers. For this, companies were divided into sustainable, non-sustainable, and those without any immediate connection to sustainability (such as social services, etc.). I find the research idea interesting. The hypothesis seems plausible, but I am not fully convinced, because in opinion research, sustainability is a topic, but usually other factors are more important. A more detailed analysis would be better in order to be able to understand each research step and the data basis. You can find the analysis on the IAB website.

Martin Biewen, together with a team from the University of Tübingen and on behalf of the Federal Association of Personnel Service Providers (GVP), examined wage differentials between temporary agency workers and other employees in comparable positions. Using regression models, it is quite possible to calculate which employee characteristics influence pay—such as company tenure, age, nationality, etc. The analysis concludes that the pay gap between temporary agency workers and other employees, often cited in public debate, narrows significantly when taking into account the characteristics that explain differences in compensation. This may sound familiar; a similar question arises in the debate about the gender pay gap. You can find the analysis on the GVP website.

For anyone interested in the topic of lifestyle-based voter segmentation, the latest study by Jochen Roose for the Konrad Adenauer Foundation is a must-read. Based on Gunnar Otte’s sociological methodology, the study uses data collected in 2023 to create a typology of how different social groups engage with politics — across work, leisure, and everyday life. The findings are especially relevant for campaign planning. The study sheds light on how large specific target groups are, what political positions they tend to hold, and how they live day to day. It’s a valuable resource for developing targeted political messaging and strategy.

Given recent shifts in public opinion, one might expect even greater support for the AfD today — something to consider when interpreting the data. You can find the full study on the Konrad Adenauer Foundation’s website.

Anselm Küsters and Matthias Störring have authored a paper for the Ludwig Erhard Forum exploring the role of private media in Germany from a regulatory policy perspective. Notably, public broadcasters are intentionally left out of the analysis — and for good reason. The authors argue that private media play a central role in holding democratic institutions accountable.

As the paper rightly points out, major digital and social media platforms are both competitors and collaborators for traditional media outlets. This dual relationship opens up meaningful avenues for regulation — particularly in shaping advertising markets and ensuring fair competition. (MB)

The D21 initiative has released its Digital Index for 2024/2025. The key message remains consistent with previous years: there is a clear connection between a person’s willingness to embrace digitalization and their personal prosperity. However, it’s important to note that this is not necessarily a direct cause-and-effect relationship, as many examples challenge this assumption.

The index highlights specific areas where Germany still needs to catch up in digital development. Ultimately, it’s up to each individual to take advantage of new digital opportunities. For the next government, the political challenge will be to create better incentives that encourage a more digitally engaged society.

You can find the full report and details here: D21 Digital Index 2024/2025.

A recent comprehensive study by the IAB, BAMF, and DIW takes a close look at the living conditions and participation of Ukrainian refugees in Germany, using data collected up to January 2024. The findings show that over half of the respondents feel confident in their German language skills, and about 70 percent are actively taking part in integration courses. Employment rates are currently at 26 percent for men and 21 percent for women. For those interested in a deep dive into the details, the full report is available here: Living Conditions and Participation of Ukrainian Refugees in Germany (IAB Report).

The London-based Reuters Institute regularly publishes insightful analyses of media coverage. This analysis on the perception of climate protection reporting in eight countries (including Germany) highlights that interest in climate protection topics remains strong in the surveyed countries. The best advocates for climate protection are scientists, and reporting on natural disasters plays a key role in shaping public opinion. You can read the full report here.

A recent study conducted by the Friedrich Naumann Foundation and Demoskopie Allensbach sheds light on how Germans — especially young people — consume political information and how vulnerable they are to misinformation. The findings, although collected in December 2024, remain highly relevant.

The survey shows that public broadcasting continues to be the main news source for 64 percent of respondents, but half also express distrust in the media overall. Among those aged 16 to 35, social media plays a far greater role — with YouTube emerging as a particularly important platform.

Equally notable are the opinions on key political topics. Only 30 percent of respondents expressed support for continued aid to Ukraine, and climate protection met with increasing skepticism. These insights highlight the growing challenge of political communication in a fragmented media environment.

You can explore the full survey results and download the data here: Friedrich Naumann Foundation – Survey on Disinformation

A research team from the Potsdam Institute for Climate Impact Research (PIK) analyzed how rising climate protection costs affect food prices in both richer and poorer countries. In poorer countries, these measures tend to have a stronger impact on consumer prices because agricultural raw materials make up a larger share of food costs. Most climate protection efforts put pressure on farmers. In wealthier countries, the cost of food processing and marketing plays a much bigger role. The study highlights the concrete effects of climate policies and offers important considerations for governments when designing these measures. You can read the full study here, It features detailed calculations for individual foods.