Managed Returns and €500bn "New Deal", Industrial Energy Reform, AI-Hub Kenya, The Paradox of Export Growth
Dear Readers, welcome to the Diplomacy Berlin Newsletter.
As the winter chill begins to lift from the Spree, the atmosphere in Berlin’s government district remains anything but quiet. This week, we find Germany at a definitive crossroads, pivoting from a posture of cautious crisis management to a bold, long-term strategic offensive. The launch of the historic €500 billion Special Fund marks the beginning of a „New Deal“ for the republic, signaling that the era of austerity is being replaced by a calculated investment in our digital and physical sovereignty.
This shift is mirrored on the global stage, where „Values-Based Realism“ is no longer just a tagline but a blueprint for action. From the progressive truce talks in the EU-China EV tariff dispute to the assertive new „Managed Return“ strategy for regional stability in the Middle East, Berlin is leveraging its economic weight to carve out a leadership role in a multipolar world.
In this issue, we also pull back the curtain on the challenges of these rapid transitions. Our featured investigation examines the regulatory gaps in migration diplomacy, while our „Business“ deep-dive explores how industrial energy reforms and a reshuffling of the DAX leaderboard are redefining German competitiveness for the AI age.
Whether you are joining us from a ministry office in Mitte or a diplomatic mission abroad, we hope this briefing provides the clarity and data-driven insights needed to navigate the week ahead.
As always, if you would like to contribute analysis, commentary, or press insights for upcoming editions, please reach out at editorial@diplomacy.berlin
With best regards,
Sigrid Arteaga
Berlin in the Global Race for Skilled Professionals
Talent Berlin is Berlin’s official welcome and information hub for international professionals who want to work, live, and build a future in the city.
What this really means is simple: Talent Berlin helps people turn the idea of moving to Berlin into something practical and doable. Through its online portal and social channels, Talent Berlin provides clear, reliable information about Berlin’s job market, key industries, and employers, along with concrete career guidance and job opportunities. The Meta Job Portal alone brings together around 90 percent of all published vacancies across sectors in the Berlin-Brandenburg capital region.
Beyond jobs, Talent Berlin supports the full arrival journey. This includes guidance on visas and residence permits, relocating to Berlin, finding accommodation, navigating public authorities, and settling into everyday life in the city. The platform also offers up-to-date news and practical tips to help newcomers find their footing faster.
A key part of Talent Berlin’s work is its community. Newcomers can ask questions, share concerns, and receive tailored answers that reflect real-life challenges of starting over in a new city. At its core, Talent Berlin connects people, opportunities, and information, making Berlin more accessible as a place to work, live, and belong. Made with love in Berlin.
How does Berlin Talent strengthen Berlin’s international visibility as an attractive location for skilled professionals?
Berlin Talent promotes the German capital digitally and online, as well as at numerous national and international events, trade fairs, and conferences around the world, positioning Berlin as an attractive place to start a career, take the next professional step, or found a company.
Which international organisations, cities, or networks does Berlin Talent work with?
The Talent Service at Berlin Partner has a broad network of international partners through which we inform Berlin-based companies. This ranges from the many international projects run by employment agencies and Chambers of Commerce Abroad (such as Hand in Hand for International Talents or African Skills 4 Germany) to educational institutions worldwide. These include RV College in Bengaluru (India), the AHK Vietnam in Ho Chi Minh City, the Gyeonggido Job Foundation in South Korea, the German Jordanian University in Amman (Jordan), the Egyptian-German Center for Jobs, Migration and Remigration, Ain Shams University in Cairo (Egypt), Universidade Anhembi Morumbi in São Paulo (Brazil), and many others.
Talent.berlin also works very closely with the Goethe-Institut network worldwide, both with individual institutes abroad and within Germany, particularly when it comes to integration-related support services for companies and their international skilled workers.
How does Berlin Talent support the internationalisation of the Berlin labour market?
It is important to us to recommend partners from our network to Berlin’s economy and companies who stand for values such as fair migration. We aim to provide employers with a realistic picture of country-specific pathways for labour migration. From a German perspective, and given the physical distance alone, it is often difficult to assess which recruitment organisations in countries of origin operate in a reliable and fair manner. For this reason, we maintain a strong network of AHKs, Goethe-Institutes, TELC, and other educational institutions that are active in countries such as India, Vietnam, or Tunisia and share their country-specific expertise with us.
What role does intercultural competence play in working with international talent?
In short: a very significant one. Language skills are one aspect, but put simply, the ability, sensitivity, and empathy to engage with people shaped by different cultures, and to approach them with openness and an understanding of difference, is half the battle. We are not talking about cultural standards or stereotypes, but about recognising that integration does not end with the issuance of a visa or upon arrival at the airport.
If integration is to succeed, workplace-related structures are needed, such as mentorship programmes, support with administrative procedures, and, very importantly, ensuring that companies actively involve their existing workforce in the internationalisation of the team. Integration also does not end after working hours. The particularly German tendency to strictly separate private and professional life is something people first need to become aware of, and then take into account during integration and onboarding processes in order to sensitise both sides, the receiving workforce and the arriving talent. And not to forget: a sense of humour often helps too, because nothing breaks down mental barriers faster than sharing a laugh.
Resilient EU Trade Surpluses Amid Transatlantic Turbulence
Despite the onset of significant U.S. tariff hikes in 2025, the European Union’s overall trade surplus remained remarkably stable through the end of the year. While exports to the United States became increasingly volatile—dropping by approximately 10% in November 2025 compared to the previous year—European exporters successfully mitigated these losses by diversifying into alternative markets. Increased trade volumes with the United Kingdom, Norway, Switzerland, and Turkey provided a critical buffer, allowing EU goods export volumes to reach record highs in the third quarter of 2025, growing 3.6% in real terms.
For the diplomatic community in Berlin, this shift underscores a pivot from transatlantic reliance toward strategic market diversification. While the U.S. trade deficit narrowed toward the end of 2025, analysts suggest this was driven more by a spike in non-monetary gold exports and pharmaceutical import declines rather than a sustained reshoring of manufacturing. As global supply chains reorganize to circumvent new trade barriers, the EU’s ability to maintain its trade balance highlights a „fragmenting but not deglobalizing“ international order where resilience is found through broader geographical engagement.
Read the full study on Bruegel for detailed data on trade-reporting discrepancies and product-specific tariff impacts.
Strategic Sovereignty: Germany’s Response to a Collapsing World Order
A new memo from the German Council on Foreign Relations (DGAP), released on February 9, 2026, offers a stark warning: the liberal international order is no longer merely under strain – it is „broken.“ The analysis describes a shift toward a world of „imperial collusion“ where the United States, China, and Russia prioritize spheres of influence over universal norms. For Berlin, this is crystallized by a transatlantic crisis where even NATO allies have faced U.S. threats to territorial integrity (such as the 2025 Greenland dispute), signaling that Germany can no longer take „American benevolence“ for granted.
For the diplomatic community, the DGAP’s „values-based realism“ framework provides a roadmap for navigating this post-Western era. The memo urges Germany to build a „stronger outer ring“ of partnerships with other middle powers to hedge against superpower coercion. By accelerating strategic independence in defense, energy, and supply chains – while keeping the door open for „strategic reconnection“ with a future U.S. administration – Berlin aims to avoid subordination. The message is clear: the time for „nostalgia“ is over; Germany must now lead through resilience and proactive alliance-building.
Read the full DGAP Memo: Global Reordering, German Responses.
Beyond the Big Powers: Germany Aims to Diversify
In this episode of the DW Berlin Briefing, host Nina Haase and a panel of experts analyze Germany’s rapid strategic pivot toward a multipolar world. As the transatlantic alliance faces unprecedented strain from U.S. policy shifts, Berlin is scrambling to reduce its reliance on traditional superpowers. The episode features rare first-hand insights from correspondents traveling with German delegations to the Indo-Pacific and the Gulf, where securing new energy sources and building fresh, „values-based“ alliances have become a matter of national economic survival.
For the diplomatic community, the podcast provides a critical look at the „Merz Doctrine“ in practice. It explores the tension between Germany’s commitment to liberal values and the hard Realpolitik required to secure critical minerals and liquefied natural gas (LNG) from non-traditional partners. As the global order fragments into competing spheres of influence, the discussion highlights how Berlin is attempting to carve out a role as a „middle power leader“—leveraging trade and technology to ensure that European interests are not sidelined by the escalating rivalry between Washington and Beijing.
Listen to the full episode on Apple Podcasts.
The Credibility Gap: Why Migration Diplomacy Requires Domestic Guardrails
A new investigation by DW Business Beyond exposes a widening rift between Germany’s high-level migration ambitions and its ground-level regulatory reality. While Berlin successfully negotiated the 2022 Migration and Mobility Partnership with India to attract global talent, the film reveals how a „middleman economy“ has weaponized the German visa system. Highly skilled Master’s graduates are being funneled into exploitative, cash-in-hand delivery networks managed via anonymous WhatsApp numbers, effectively bypassing the Finanzamt and social security systems through a cycle of „pop-up“ bankruptcies.
For the diplomatic and policy community, this report serves as a stark warning: migration diplomacy cannot exist in a vacuum. If Germany’s strategic goal is to become the premier destination for the world’s „brightest minds,“ the persistent failure to regulate subcontractors and provide affordable housing risks permanent damage to the national „brand.“ As policymakers debate the next phase of labor integration, this case study underscores that without robust domestic enforcement, high-level diplomatic pacts may inadvertently subsidize a shadow economy rather than solve the country’s demographic and industrial needs.
Watch the full investigation on DW News.
The "African Centre for Applied AI": A German-Kenyan Joint Venture
On February 4, 2026, a high-level German delegation in Nairobi finalized plans to establish the Centre of African Excellence for Applied Artificial Intelligence. This joint initiative between Germany and the Kenya Advanced Institute of Science and Technology (Kenya-AIST) is designed to position Kenya as a regional hub for ethical, locally relevant AI solutions. The collaboration focuses on building robust data ecosystems and training the next generation of African tech talent, aligning directly with Germany’s broader foreign policy goal of fostering „technological sovereignty“ among its strategic partners.
This partnership is particularly noteworthy for the diplomatic community as it represents a shift toward „Value-Based Realism.“ By investing in AI governance and talent development rather than just infrastructure, Berlin is differentiating its engagement from the „resource-only“ models of other global powers. For diplomats, the Centre serves as a blueprint for how scientific cooperation can be used as a tool for long-term stabilization and economic integration in the digital age.
Read more about the AI initiative on TechAfrica News.
The Export-Industry Paradox: Contrasting Signals at the Year-End
Fresh data from Destatis, released on February 6, 2026, presents a striking duality in Germany’s economic closure for 2025. On the trade front, December outperformed all expectations with a 4.0% surge in exports, reaching €133.3 billion and helping the country achieve 1.0% annual growth after two years of stagnation. This rebound was fueled by a significant 10.7% jump in exports to China and a resilient 8.9% increase in shipments to the United States, despite the 15% baseline tariffs implemented during the second half of the year. For the full year, the foreign trade surplus reached €202.8 billion, underscoring the enduring global demand for the „Made in Germany“ brand.
However, the industrial production data for the same period offers a sharp corrective to this export optimism. Real output in manufacturing declined by 1.9% in December, far exceeding analyst forecasts of a minor dip. This contraction was driven primarily by a steep 8.9% drop in automotive production and a 6.8% fall in machinery, highlighting the structural „friction“ between high global demand and domestic manufacturing constraints. For the diplomatic community, this paradox is the defining challenge of 2026: while Germany remains a global export powerhouse, its industrial heart is grappling with high energy costs and a difficult transition in the automotive sector, making fiscal stimulus and infrastructure investment—such as the new €500 billion Special Fund—more critical than ever for domestic stabilization.
Read the detailed data regarding Germany’s economy on Destatis and QNA.
The German Eastern Business Association (Ost-Ausschuss):
The Ost-Ausschuss is a critical player in Berlin’s „values-based realism“ strategy, acting as the primary mediator for German businesses across 29 countries in Central and Eastern Europe, Central Asia, and the South Caucasus. At a time when supply chain sovereignty and energy de-risking are paramount, this association provides essential insights into how German industry is navigating the complexities of the „Middle Power“ ring. For the diplomatic community, their country-specific working groups and regular briefing papers offer a rare, inside-track view of the projects and partnerships that are redrawing the map of German economic influence.
The Berlin Economic Forum returns to the capital and Potsdam from March 2-6, 2026, focusing on „International Business, Sustainable Investments, and Tourism Development.“ Held parallel to the ITB, this year’s forum emphasizes „Driving Innovation in Finance for Economic and Social Progress,“ bringing together a diverse circle of government officials, corporate leaders, and academic experts. For those navigating the new „Middle Power“ landscape, the forum provides a vital platform for discussing how values-based realism can be operationalized through sustainable infrastructure and strategic financial partnerships between the EU and global emerging markets.
Learn more via the Academy for Cultural Diplomacy.
Marking six decades as the world’s leading travel trade show, ITB Berlin 2026 convenes under the guiding theme „Leading Tourism into Balance.“ From March 3–5, the Messe Berlin will host over 5,500 exhibitors and 400 top speakers to address the industry’s most pressing transitions—from the integration of AI and „agentic commerce“ to the resilience of destinations facing climate change. For the diplomatic community, ITB remains a primary arena for soft-power diplomacy and bilateral mobility agreements, offering unique insights into how technological sovereignty and sustainable development are reshaping global travel and economic integration.
Explore the full program at the ITB Berlin website.
For those navigating the high-stakes agenda of late February, the eat! Berlin 2026 festival (Feb 19 – March 1) offers a masterclass in culinary diplomacy. A standout highlight is the „Butt bei die Fische“ evening on February 26 at Fischer & Lustig in the Nikolaiviertel. The event pairs the technical precision of Michelin-starred guest chef Marcel Kube with the regional expertise of Holger Mootz, creating a five-course „Sea-to-Table“ menu that elevates traditional North German fare into a sophisticated international format. Interspersed with the dry, sharp-witted punchlines of comedian Manuel Butt, the evening serves as a quintessential Berlin experience: where technical excellence meets unpretentious ground-level realism – proving that the city’s most impactful dialogues often occur over a perfectly executed plate.
More jobs at politjobs.com