Wednesday, January 29, 2014

So here's why Germany is struggling to ban neo-Nazis

A series of hate crimes has prompted the authorities’ bid to disband the far-right National Democratic Party. But it won’t be easy.
By Jason Overdorf
GlobalPost - January 29, 2014

BERLIN, Germany — Reeling from revelations that a neo-Nazi cell allegedly robbed banks and murdered immigrants with impunity for more than a decade, the authorities have been at pains to show they’re acting against extremism.

Leading the effort is a drive to ban the far-right National Democratic Party, which is alleged to have neo-Nazi links.

All 16 German states filed a motion in the federal constitutional court to ban the NPD in December, arguing that it propagates racism and aims to overthrow the democratic government. But the court's dismissal of a similar case in 2003 suggests the going won't be easy, especially when neither Angela Merkel's government in Berlin nor parliament has joined the fight.

More than that, critics say, the move will do little to stop hardcore neo-Nazi street fighters even as it galvanizes support for a political organization that was already about to self-destruct.

Germany has tough laws to prevent the resurgence of Nazism, such as a ban on displaying the swastika and an edict that makes it illegal to deny the Holocaust.

However, constitutional protections for free speech have made it difficult to ban the NPD just because its ideology bears some similarity to Adolph Hitler's. To do that, the plaintiffs must show the party is actually working to overthrow the state through violence.

Experts say that may be very difficult to prove.

“There are some similarities between today's neo-Nazis and the Nazi Party of the 1920s and '30s,” says Bernd Wagner, a longtime veteran of the anti-extremist unit of the German police. However, he adds, the party lacks a formal structure with a leader at the top. “There are countless cells and networks with separate activities and projects and horizontal, vertical and diagonal connections.”

The danger those informal networks pose hit home in 2011, when police allegedly connected a string of bank robberies and murders to a terrorist cell that called itself the National Socialist Underground (NSU).

Among the group's alleged crimes are the murders of nine immigrants between 2000 and 2006, the bombing of an immigrant-owned barbershop in Cologne in 2004 and the murder of a policewoman and attempted murder of her partner in 2007.

Police initially failed to link the crimes to an ideological motive and insisted at first that the Cologne bombing couldn’t have been a terrorist attack.

It soon surfaced that the earlier effort to ban the NPD may have aided the terrorist group.

In 2012, the Interior Ministry announced it was investigating suspicions that an NPD official named Ralf Wohlleben — who had acted as a confidential informant for the authorities seeking to ban the party — had during the same period supplied the terror cell with the gun allegedly used in the murders of the nine immigrants.

The development gave ominous new meaning to the constitutional court's 2003 dismissal of the case against the NPD.

Back then, the court ruled that the authorities had flooded the party with so many undercover agents and informants that it was impossible to ascertain whether its alleged plotting to overthrow the government had actually been hatched in the minds of the police.

Now it looked as if they had also indirectly supplied the weapons.

“Wohlleben and other functionaries of the NPD were also active in this terror network,” says Wagner, who now heads a group that helps neo-Nazis who want to leave the movement.

“Even though in public they presented themselves as a non-violent democratic party, at the same time they were providing support and logisitics for violent activities.”

Prompted toward new vigilance by the revelations, the Interior Ministry reopened investigations into some 3,300 unsolved murders and attempted murders committed between 1990 and 2011. As a result, nearly 750 cases were added to the 60 killings previously attributed to right-wing extremists.

The 16 state governments now seeking to ban the NPD argue that the party gives the network real political power. They allege that as many as 1 out of 3 party members is a convicted criminal or faces police investigation, according to a copy of the complaint leaked to a German newspaper.

By providing the NPD with the state funding afforded to all German political parties, German taxpayers are essentially paying for the neo-Nazi groups' propaganda, the interior minister for the state of North Rhine-Westphalia argued.

“We can't be the shoemaker who continually resoles their combat boots with this party financing,” Ralf Jäger told German media after the case was lodged.

However, police say it will be difficult to establish the existence of a command structure or a money trail from allegations that the membership rosters of the NPD and informal Kameradschaften, or “fellowships” of neo-Nazis, share some common names.

There's little or no direct proof to suggest that the NPD operates like the political wing of a broader, militant neo-Nazi movement — as Sinn Fein acted for the IRA in Ireland, says Oliver Stepien of the Berlin police.

“The inland intelligence service and our own information suggests that the neo-Nazi action groups try to use the NPD structure to advance their own goals,” he says.

“But there's no general rule that the NPD pays for the lawyers when a right-wing activist is accused of a crime. In fact, the party distances itself from the action groups when they break the law.”

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Some worry that the renewed effort to ban the NPD will galvanize its supporters and bolster its credibility with the hard-core street fighters just as it's about to fade away on its own.

The NPD has seats in only two state parliaments and no presence whatsoever in the Bundestag. In recent elections, it won a paltry 1.3 percent of the popular vote, although that total is much higher than the support it earned between 1990 and 2005.

The party is also practically broke. Its 300,000 euro ($410,000) annual government subsidy has already been frozen due to an outstanding fine of 1.27 million euros ($1.7 million) for accounting irregularities.

And it was thrown into disarray in December when former party chairman Holger Apfel was drummed out following allegations of a “homosexual assault.”

Bringing the full might of the German court system to bear now could grant the party new legitimacy in the minds of potential supporters as well as stoke long-held resentment toward the liberal state's supposed persecution of “patriotic” Germans.

And it would do nothing to eliminate the neo-Nazi “fellowships” and other informal networks that keep the underground movement alive, Wagner says.

“Some might say,” he says, “that the federal government is just trying to silence its critics.”

Thursday, January 23, 2014

Russia muscles into European nuclear industry

A new deal with Hungary is set to boost Moscow's influence as its grip on oil and gas wanes.
By Jason Overdorf
GlobalPost - January 23, 2014

BERLIN, Germany — A leading Hungarian official has said an agreement last week to give Russia a foothold in his country's nuclear future is Budapest's best deal in 40 years.

Hungary granted Russia's state energy company Rosatom a $14-billion contractto double the capacity of the country's sole nuclear power plant, a 2000-megawatt reactor in the Danube River city of Paks.

The funds would be offered as a 30-year loan package to be extended at below-market rates.

“These new reactors will surely enhance Hungary's energy independence and security,” Russian President VladimirPutin told reporters.

But one person's bargain is another's Faustian deal — in this case at least. Critics say the sweetheart deal may as well have been written by Mephistopheles, the demon of German folklore.

They say the project was never tendered for competitive bids despite an earlier expression of interest from the French energy company Areva. Skeptics worry it represents an effort by Putin to add nuclear energy to the oil and gas monopoly he's used so effectively to cement Russia's influence in Central and Eastern Europe.

“What are Hungarians to make of the fact that Prime Minister Viktor Orban has committed them to invest [billions] building two new nuclear reactors without consulting his own cabinet let alone parliament, industry experts, or the Hungarian people?” asked a pointed editorial in the English-language Budapest Beacon.

Orban maintains that the deal meets European Union regulations. But the opposition has demanded an extraordinary session of parliament be convened to discuss its terms and implications.

The prime minister has already been forced to retract an earlier statement he made claiming that the European Commission had approved the deal, amending it to say that the regulatory body has made no objections to the pact.

“It is too early to say [whether the agreement meets EU regulations],” a spokeswoman for the commission told GlobalPost in an email. “We are looking at the issue now and will let you know when the legal analysis has been completed.”

The EU's 2004 “Public Sector Directive” mandates that public works projects in the energy sector must be open to competitive bids, and Hungary's own laws on government procurement require open tenders unless there are reasons why the project can only be carried out by a specific contractor.

However, Orban has suggested that as the expansion of an existing facility, rather than a new project, the Paks contract isn't subject to the regulation. Moreover, Rosatom was said to be the only company to offer financing in discussions with companies ahead of the decision not to open a bid, Hungarian media reported.

The European Commission's decision about the agreement's compliance could have far-reaching implications.

In 2012, allegations of corruption surrounded the Russian bid to expand the Czech Republic's Temelin nuclear reactor due to the involvement of a Czech firm under investigation for insider trading and breach of trust in connection with previous deals. Now it looks doubtful that project will go forward at all, according to Czech media.

Similarly, a Russian project to build a 2000-MW nuclear plant in Belene, Bulgaria, was excoriated as “a corrupt and completely illegitimate business project, aimed at producing abundant and expensive electricity in a country with excess capacity in a region of declining electricity demand,” in the words of Ognyan Minchev, a research fellow with the German Marshall Fund of the United States’ Balkan Trust for Democracy. The Bulgarian parliament voted to scrap plans for the reactor in February last year following a protracted debate over its environmental impact and a new investigation into the projected costs.

Specific allegations of corruption have yet to be leveled at the Rosatom deal, and a spokesman for anti-corruption watchdog Transparency International's office in Hungary said his organization lacks sufficient information to make a judgment. However, corruption is a generalized concern in both countries: Hungary already ranks a mediocre 47 out of 176 countries on the watchdog's Corruption Perception Index and Russia an abysmal 130.

Russia already enjoys a near-monopoly over Central European gas supplies, providing three-quarters of the gas used by Hungary and the Czech Republic and two-thirds of Ukraine's.

Putin has made no bones about using that dominance for commercial leverage or as a weapon of foreign policy. In 2006 and 2009, for instance, Russia cut off gas supplies to the Ukraine in the middle of winter during disputes over prices, leaving customers across Europe to freezeuntil their countries coughed up more cash.

In March last year, critics argued that Russia purposefully drove up energy prices in Bulgariato engineer the fall of Prime Minister Boyko Borisov's government after he terminated the controversial Russian-run nuclear power plant in Belene.

And any possibility that Ukrainian President Viktor Yanukovych may cave to the ongoing protests in his country for greater integration with Europe has been all but eliminated by Russia's energy monopoly, says Jonathan Stern, an oil and gas expert at the Oxford Institute for Energy Studies.

“What Putin said, as far as I can see, was not 'we'll turn off the gas,' but 'if you want to align yourself to the EU, then you will be paying the price that the EU pays,'”he said.

“The reason Russia is able to do this is that these countries have not made sufficient efforts to diversify their imports.”

If history is any guide, Russia will make sure that nuclear power doesn't change that.

Saturday, January 18, 2014

Obama's NSA promises fail to quell European fears

NSA critics see little substance and few practical measures in Obama's pledge to restrict spying abroad.
By Jason Overdorf
GlobalPost - January 18, 2014

BERLIN, Germany — Germany's foreign minister welcomed President Obama's official pledge to curb the powers of the National Security Agency (NSA) on Friday. But a quiet unease lingers across Berlin and many other European capitals.

“President Obama outlined a process for restricting the agency that will include both Congress and the public,” German foreign minister Frank-Walter Steinmeiersaid.

Now the balance between America's security needs and the protection of civil liberties must be adjusted in the right way, the foreign minister added.

Ah, there's the rub.

As Obama himself phrased it, “It is not enough for leaders to say: Trust us, we won’t abuse the data we collect.” In Europe, questions remain regarding whether the measures Obama announced Friday go far enough in including America's allies in the oversight and restriction of the NSA.

More from GlobalPost: 16 disturbing things we've learned from Snowden (so far)

“He's a very good speaker, but the substance of his message was not very ambitious,” said Peter Schaar, Germany's former commissioner for data protection and freedom of information.

“He said that US secret services will respect privacy, but there are very few additional guarantees and safeguards and most of them are limited to US persons,” Schaar told GlobalPost.

As a result, the pledges are unlikely to silence the president's critics across the Atlantic.

"Only when we have signed a legally binding treaty that protects all [European] citizens will the lost trust be won back," said German Justice Minister Heiko Maas.

“Almost all the NSA's integral freedom of action was preserved, and only a handful of the 46 proposals submitted by a committee of experts in December were endorsed,” concluded France's Le Monde newspaper.

“Obama did not announce any new protections for non-Americans abroad, instead punting the issue to his top officials for further consideration. Nor did he address the NSA’s secret weakening of encryption standards,” wrote the UK's Guardian newspaper, referring to its own report that American and British intelligence agencies are able to bypass codes that supposedly allow internet users to protect their personal data, online transactions and emails.

“For me, limiting the use of metadata [from phone contacts] to only two steps is the only real news,” said Schaar, the former German data protection commissioner. But those rules for collecting and analyzing phone call information would still be illegal under German law, which limits the examination of a suspect's phone contacts to only one step, he said.

From Europe's perspective, Obama's speech focused on reassuring American citizens that new measures will protect their privacy. But beginning with a nod to “totalitarian states like East Germany,” the US president repeatedly offered concessions to NSA critics abroad.

He promised to make public more of the decisions of the Foreign Intelligence Surveillance Court, which provides judicial review of America's intelligence activities, including the Section 702 program targeting foreign individuals overseas, and the Section 215 telephone metadata program.

He announced new, but as yet unspecified, limitations on the government's right to retain, search, and use that information in criminal cases.

He revealed that he has directed the US attorney general to limit the scope of the so-called “national security letters” that the FBI uses to order companies to provide information about their customers so that they are only valid for a fixed period, instead of remaining in force indefinitely.

And he announced that effective immediately the NSA would limit its efforts to collect data to telephone calls that are two steps removed from a number associated with a terrorist organization instead of the previous three.

“The president for the first time ... acknowledged that non-US persons have privacy rights in the context of our overseas collection. It is very hard to overstate the sort of spiritual importance of that statement,” said Benjamin Wittes, a senior fellow at the Brookings Institute.

But Europe is looking for practical measures, not spiritual ones. And that means critics like Jan Philipp Albrecht, a German member of the European Parliament's committee on civil liberties, justice and home affairs, will continue to fight for a tough anti-surveillance law in Europe — which could make companies like Google and Facebook subject to a 100 million euro fine if they turn over EU citizens' data to US spies.

Albrecht continues to believe European countries should stop the transfer of banking information and details about airline passengers until the US agrees to legally enforceable measures to prevent the NSA from spying on European citizens.

“Each day that passes with no agreement leads to the further erosion of European citizens' data protection rights,” Albrecht said.

Thursday, January 16, 2014

Gays face backlash in Germany

Conservatives campaign to stop gay sex education amid celebrations for a gay soccer player's coming out.
By Jason Overdorf
GlobalPost - January 16, 2014

BERLIN, Germany — German athletes will sport rainbow-colored uniforms at the Winter Olympics in Sochi next month in a move widely interpreted as a protest against Russia’s crackdown against gay rights.

Although some see it as part of the country’s redoubled efforts to be perceived as a leader in gay rights following Moscow’s recent enactment of an anti-gay law, the recent coming-out of a gay German soccer player has drawn new attention to problems that still face gays and lesbians at home, which suggest the real picture is more complex.

When former professional player Thomas Hitzelsperger announced that he was gay last week, he was almost universally celebrated in the German press.

But rumors persisted that his coach dissuaded him from making the announcement until he retired — while the European championships were underway — suggesting that German soccer fans, at least, haven’t fully accepted the idea of gay players.

“The rejoicing sounded suspiciously self-serving and smug,” Der Spiegel observed. “'We are so amazingly liberal that we can even get excited about a gay professional football player,' the message seemed to be.”

James Gardner, a gay American living in Berlin with his German husband, sees cynical politics in the new enthusiasm for gay rights.

“The whole issue of homosexuality is so politicized right now,” he says. "We have this Cold War happening on the gay front," he says, referring to the unspoken divides in Germany on homosexuality, "this Cold Gay War.”

Moves by the Catholic Church in the state of Baden-Würtenburg to ban sex-education classes from teaching students about homosexuality — even though there’s no sign the public school system will be teaching anything of the kind — suggest that in Germany, as in the US, ordinary people remain deeply divided over the issue, says Carolyn Gammon, a Canadianlesbian married to a German woman.

“I'd like to say that it's two steps forward, one step back,” she says. “But it's more like 1.1 steps forward, one step back.”

Recent polls suggest 65 percent of Germans favor full equality for homosexuals, according to Renate Rampf, spokeswoman for the Lesbian and Gay Federation of Germany, the country's largest non-profit gay rights organization.

That means one in every three Germans believes gays and lesbians aren’t entitled to equal treatment, which leaves fertile ground for evangelical Christians and Catholics who vehemently oppose certain rights for homosexuals.

“Even Chancellor [Merkel] has said that she has a bad feeling when it comes to the issue of gays adopting children,” Rampf said in an email.

Germany recognized domestic partnerships for gays and lesbians in 2001. Three years later, gay and lesbian couples in legal partnerships were allowed to adopt children.

But some less contentious rights — such as tax equality for same-sex partnerships and heterosexual marriages — have been slow in coming. And numerous attempts to legalize gay marriage have failed to pass in successive parliaments led by Chancellor Angela Merkel's conservative Christian Democratic Union.

Gays and lesbians confront similar contradictions in daily life.

When Gardner was an openly gay student at an elite private school, he says, his peers accepted his sexuality.

But Gammon says even in her liberal Berlin neighborhood of Kreuzberg, “schwule” or “gay” is the most common insult in her son's schoolyard.

“Our child is now going through this system,” she says, “and he's never had a single thing that's gay-positive.”

Wednesday, January 15, 2014

Germany: America lied to us about ‘no spy’ pact

Washington’s reluctance to rein in the NSA continues to harm relations.

By Jason Overdorf
GlobalPost - January 15, 2014

BERLIN, Germany — On Facebook, lying is an unfriending offense. Geopolitics may be slightly more complicated.

So after the news that the United States is backtracking on a promise not to spy on its ally by the National Security Agency (NSA), will Germany just suck it up?

Not if peer pressure has anything to do with it.

“America lied to us,” the German-language Süddeutsche Zeitung quoted a high-ranking official as saying in a report claiming that a “no spy” pact between the two countries is dying a slow death in negotiation committees. “We've got nothing.”

The process began late last year, when Washington made four promises to Berlin in an effort to quash resentment over revelations that the NSA and President Barack Obama had listened in on Chancellor Angela Merkel's private phone conversations on top of perusing the personal data of millions of ordinary Germans.

The US vowed that the NSA wouldn’t violate Germany's national interests. It agreed it would not spy on German government officials. It promised not to engage in industrial espionage involving German companies. And it said it would never again violate German laws to collect private data.

But as their US counterparts fight tooth and nail to avoid measures that would make any of those promises legally binding, German negotiators say crossing your fingers doesn't count in international relations.

The result may prompt new calls from the German media and opposition politicians for Berlin to play hardball on other issues, such as a proposed free-trade agreement between the US and European Union, Germany's former data protection commissioner suggests.

“The US will act only if we give them real arguments that it is in their own interest,” says Peter Schaar, former Federal Commissioner for Data Protection and Freedom of Information.

“We have to combine different issues like the free-trade agreement, the safe-harbor regime on the protection of personal data, the question of financial data related to SWIFT bank transfers [with the issue of spying]. Then perhaps these arguments would be heard by the US officials.”

It's not clear whether Germany’s new coalition government, which formally took power only at the beginning of the year, will be prepared to undertake tougher actions than the previous one, Schaar added.

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Acting government officials have so far declined to comment on the record about the ongoing “no spy” pact negotiations.

But pressure appears to be mounting despite Merkel's repeated attempts to downplay the issue in order to protect US-German trade relations.

The US “will not honor its verbal agreement,” Die Welt reported Wednesday. “America remains at the listening post.”

“I think the US needs to see the damage all this activity has done, and how much trust has been lost in Germany,” Deutsche Welle quoted Philipp Missfelder, Germany's new coordinator for Transatlantic cooperation, as saying.

“Let's not deceive ourselves: even if a no-spy agreement were to be signed, there would still be many unanswered questions.”

“If Germany goes on endlessly without a deal or accepts a completely meaningless agreement,” a columnist for Tagespiegel added, “it will have disgraced itself thoroughly.”

Although he US and Germany will almost certainly remain “frenemies,” their spat may nevertheless have broad implications.

Public pressure could spur action in the European Union parliament, where an effort to rewrite privacy laws and empower regulators to fine companies such as Google and Facebook as much as 100 million euros for handing over private information to the NSA risks running out of time before new elections in May.

Friday, January 10, 2014

Early divisions augur hard going for Germany’s grand coalition

Disagreements over migration are already exposing rifts between Merkel's allies.
By Jason Overdorf
GlobalPost - January 10, 2014

BERLIN, Germany — Angela Merkel's fractured hip may be the least of her worries.

The German chancellor’s holiday skiing accident has stuck her with as much as three weeks of bed rest.

But a spat between her conservative and liberal allies that’s threatening to derail her “grand coalition” before it even gets rolling is surely more troubling.

Immigration has been the first flash point.

Bulgarians and Romanians gained the right to settle freely in Germany from Jan. 1, when they finally received the full rights of mobility granted by their countries’ accession to the European Union in 2007.

Even before the new laws came into effect, however, some of Merkel's conservative allies were already stealing a march on their left-leaning coalition partners.

Stoking fears about a wave of “welfare tourists,” the Bavarian leader Horst Seehofer called for new laws that would limit migrants' rights to social benefits, which aren’t guaranteed under EU rules.

Seehofer's Christian Socialist Union (CSU), the sister party of Merkel’s Christian Democratic Union (CDU), wants to ban migrants who defraud the welfare system from re-entering Germany and bar new arrivals from receiving benefits during the first three months of their stays.

The proposal strikes at one of the EU’s founding principles: equality for its citizens.

Experts believe it may be the opening salvo in a battle over the coalition’s future direction.

“This is a political game and a reaction to feelings in the parts of the population,” says Klaus Zimmerman, director of the Institute for the Study of Labor at the University of Bonn. “And also a game between the parties of the new government, who seek to find their roles and positions.”

In fact, Germany needs more immigrants, having achieved record levels of employment in 2013, when the economy created some 232,000 jobs despite the euro crisis.

With one of the EU's lowest birth rates, the population is aging and shrinking.

There's already a shortage of skilled laborers. While the rest of Europe suffers lingering record unemployment, some German cities are seeing jobless rates dip below 5 percent.

Earlier this year, Merkel warned that the working population could fall by as many as 6 million people by 2030, with the result that Britain could surpass Germany as Europe's largest economy.

Immigration would help address the problem, not only by providing skilled labor but also helping maintain the low wage levels that have provided the foundation for Germany's economic revival since the 1990s.

That may help explain why Merkel held out for a coalition with her social democratic rivals after the country’s elections in September, instead of cobbling together a minority government with the CSU, says James W. Davis of Switzerland's University of St. Gallen.

If she'd opted for a minority government, she'd have been hostage to Seehofer's demands even though the CSU holds merely 45 seats in the 631-member parliament. By forming a “grand coalition” with the center-left Social Democratic Party, or SPD, however, she can play its members against the conservatives in order to advance her more moderate agenda.

That's where Seehofer's loose-cannon status comes in handy, Davis says.

“Having a 'crazy man' rocking the boat gives Merkel the cover she needs to resist further compromises,” he says.

But Seehofer’s calls for a clampdown on “welfare tourists,” a toll on foreigners who drive on the autobahn, and other such measures may cause broader problems.

As right-wing extremism grows across the EU, the CSU's populism may help advance the cause of extremists inside Germany, too, says Andreas Pott, director of the Institute for Migration Research and Intercultural Studies at Osnabrueck University.

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To stop the new anti-euro Alternative for Germany Party from stealing its conservative voters, for example, the CSU recently adopted slogans such as “Fraudsters will be chucked out” that normalize xenophobic stances previously held only by the extremist National Democratic Party, he says.

In Britain, such anti-immigrant sentiment is fueling the popularity of right-wing parties that are widely believed to have prompted Prime Minister David Cameron to announce a referendum on leaving the EU and restrict migrants' access to social benefits.

“Germany is neither anti-migrant nor racist,” Zimmerman says. “But the public is misused by political strategists who use the topic for political games, as we’ve seen in the United Kingdom.”

Can US carmakers compete with the Germans?

With the European auto market in decline, American companies can expect to be squeezed from all sides.
By Jason Overdorf
GlobalPost - January 10, 2014

BERLIN, Germany — Opening with a gala this weekend in bankrupt Detroit, the North American International Auto show will be all glitz and glamour as ultra-expensive luxury sedans and high-performance sports cars compete against fashion models for media attention.

But the real news will be in the boring old bread-and-butter “value segment,” where the competition promises to be stiffer than ever thanks to developments across the Atlantic in Munich, Stuttgart and Wolfsburg.

American automakers have never sold many cars in Europe. But the steep decline of the car market here nevertheless spells trouble for them partly because the ongoing euro crisis is accelerating German auto companies’ expansion drive in the US, industry analysts say.

“They're not just being squeezed by the huge advances that companies like Kia, Skoda and those kind of brands have made,” says Tim Urquhart of the global research firm IHS, “but also all the big premium players are moving down market into their traditional territory.”

A spike in December sales in France, Italy, Belgium and Spain has raised hope of a modest recovery.

But overall European sales last year were down 25 percent compared with the pre-crisis level in 2007, and many remain skeptical that buyers will ever come back in those numbers, Urquhart says.

“There are all kinds of debates about changing demographics — older populations, young people who are less interested in buying cars — because the car isn't the great status symbol it once was,” he says.

“Whatever recovery there will be will be very weak and fragile. That's the general consensus.”

Matters look better elsewhere.

New car sales in the US last year were a whopping 50 percent higher than during the depths of the recession.

And the consultancy firm McKinsey & Co. forecasts that carmakers’ global profits will rise another 50 percent over the next five years.

As the world market continues to change, will US companies be able to keep up?

More from GlobalPost: Early divisions augur hard going for Germany’s grand coalition

In December, GM announced it would stop selling Chevrolets in Europe in order to marshal its resources around its Opel brand — sold only in Europe and virtually unknown in the US — in a move that would be comparable to Coca-Cola scrapping Coke to focus on Fanta.

The same month, both Ford and GM announced they would shut their plants in Australia — where the strength of the Aussie dollar made paying workers too costly — even though GM's Holden is the country's second-most popular brand.

In China and India, meanwhile, Ford and GM continue to lag far behind Volkswagen, Hyundai and Suzuki, even as the threat from upstart Chinese brands grows.

And in the resurgent US market, Americans can expect more and more competition not only from Volkswagen — which aims to surpass Toyota as the world's largest carmaker — but also from Audi, BMW, Mercedes and Porsche.

The downturn in Europe has prompted German companies to push sales of luxury cars more aggressively, making it increasingly difficult for Cadillac, Lincoln and other American brands to claw their way back into the game.

At the same time, the Germans are threatening to carve a big slice from the middle of the American market — the most profitable segment — by introducing lower-priced cars that can compete head to head with successful American models such as the Chrysler 300.

Last year, Daimler launched the four-door, sub-$30,000 Mercedes CLA with a 60-second advertisement during the Superbowl, starting an assault that helped Daimler beat out BMW and Lexus in the US for the first time in a decade, Bloomberg reported.

Volkswagen, whose drive to become the world's largest carmaker was set back by flagging US sales last year, is expected to fight back by announcing plans to open an SUV plant in America in Detroit next week.

“Volkswagen doesn't really have the right models for the US market,” German automotive journalist Dietmar Stanka says. “They need a different product policy for the US.”

And while Lamborghinis and fashion models will be grabbing all the attention in Detroit this weekend, Audi, BMW and Mercedes will all be showcasing sedans and so-called “crossover” SUVs in the $30,000-range.

All that could add up to a bigger headache for US companies.

Monday, January 06, 2014

Germany: It's good to be the king

Meet the former video store owner who claims to be a monarch.
By Jason Overdorf
GlobalPost - January 6, 2014

LUTHERSTADT-WITTENBERG, Germany — The leader of the Fourth Reich is in trouble with the law. Again.

Meet Peter Fitzek, the 48-year-old self-proclaimed monarch of the so-called Königsreich Deutschland, or kingdom of Germany.

Dressed in tight-fitting black pants and a black fitted shirt with the Königsreich coat of arms on its breast pocket, with his shoulder-length hair combed straight back in a pony tail, Fitzek looks more like a nightclub impresario than polo-playing royalty.

He has no hereditary claim to royalty and little hope of getting his kingdom to secede from the federal republic.

But with his own currency, “state-run” health care scheme, some 3,500 subjects and even a driving license issued by the Königsreich, he's become a notorious nuisance for the authorities.

That's just the way he likes it.

More hippie than Nazi, Fitzek's ideology is hard to pin down.

He chose to use “reich” not out of any enthusiasm for Fascism, he says, but to inspire Germans to question why they can never be allowed to forget the past.

His kingdom — a 22 acre plot where his purported 3,500 subjects reside rent-free — in the former East Germany is more like a commune.

“I've purposefully driven over the speed limit — radically over the speed limit — so someone will finally take me to court,” he says.

“The court must decide whether I have this authority or not.”

Fitzek has been nabbed for moving violations as many as 24 times and written up for driving without a license eight times before a judge in Lower Saxony sentenced him to three monthsin prison in October.

“You have built a fantasy world with a fanciful political worldview,” Judge Thorsten Steufert told the self-proclaimed monarch.

Germany's Federal Financial Supervisory Authority (BaFin) has ruled that his Reichsbank and health fund violate the law and repeatedly ordered him to repay all depositors.

“BaFin has prohibited Peter Fitzek several activities in insurance business as well as his unauthorized banking business,” BaFin spokesman Ben Fischer said in an email.

It would also be very surprising if the king avoids a run in with the Federal Central Tax Office, given his attitude toward that institution.

“I don't pay taxes just like I don't pay speeding tickets,” he says.

Fitzek has vowed to fight his legal cases all the way to the Supreme Court in a bid to force the nation to recognize his sovereignty.

Although he may be just having a lark, he says he’s starting an alternative to the financial system that plunged Europe into its ongoing economic crisis.

“Collapses of the monetary system have always been accompanied by conflict," he says. "Then they start building the same system all over again."

“It's important there be an alternative.”

Citing Germany's Basic Law and the 1933 Montevideo Convention on the Rights and Duties of States, Fitzek carved out a territory outside the medieval city of Wittenberg and declared it a sovereign state last year.

Previously, the commune operated under the name “Neudeutschland,” or “New Germany.”

The king argues that under Montevideo, the only requirements for his claim are a permanent population, a defined territory, a government and the capacity to enter into relations with the other states. But he's gone further than that.

Working with a company Fitzek says also supplies paper to the mint, the Königsreich launched its own currency, the “Engel,” or Angel, complete with invisible fluorescent markings that appear only under a black light. On the downside, it's not freely convertible to euros and can be used only for goods and services sold by other Königsreich subjects.

More recently, the kingdom launched inflation-proof silver coins named Neue Deutsch Marks.

“How many wish for the good old Deutschmark back?” reads an announcement on the kingdom's website.

In September, Fitzek launched the Königsliche Reichbank, a central bank that also offers free customer accounts. Promising refuge from a possible collapse of the euro and investment returns of 2 to 9 percent, it's purportedly “safer than any other bank” because it’s not required to conform to any European Union or German law.

But its claim to legal status — to which German regulators continue to object — depends on aclause that says it's not obligated to give depositors’ money back when they want it.

Fitzek says a similar clause means the kingdom's alternative health scheme, which was launched in 2009 and took in more than $40,000 per month in premiums in 2012, is also immune to regulatory interference from BaFin.

Called the Health Checkout, it's a “holistic alternative to the health insurance system” that doesn’t actually guarantee its members the right to any benefits.

It does offer seminars on healthy lifestyles to help members beat ailments that are “90 percent psychosomatic.”

“The authorities don't appreciate that we've been able to heal a lot of people,” Fitzek says. “We haven't had a single incident of cancer since the health system was set up among more than 200 members.”

Whether Fitzek is a visionary, fantasist or conman, it’s hard not to enjoy the show.

In the tomb-silent lobby of the Reichsbank — an ordinary-looking bank branch on one of Wittenberg's cobblestone streets — the fast-talking Fitzek reels off his grievances with the authorities.

Citing legal cases he claims to have memorized with the aid of a photographic memory, he says Hitler’s Third Reich was never officially dissolved after World War II. Therefore, Germany has no constitution and no legitimate authority over its citizens.

At least two post-war elections have violated the government's own regulations, he says.

“This indicates it's only criminals who are in power, and they are not obeying their own laws,” Fitzek says.

Born in the former East Germany before the fall of the Iron Curtain, he belongs to the “lost” generation of Germans whose upbringing in the communist east left them ill-prepared for life after reunification.

Many of his peers never adjusted. A 2010 poll conducted by Stern magazine, for instance, found that two-thirds of Germans from the former East felt they were still isolated from the “unified” country.

More than two decades after the Berlin Wall came down, unemployment remains about a third higher in the east than in the west despite a mass exodus following reunification.

Fitzek, who wanted to be a teacher, never got the education he wanted. Trained as a cook, he worked in various restaurants and hotels before opening a video store then a bar — without finding a way to fit in.

With the Königsreich, he's finally found an answer of sorts. As long as he has the energy to keep all the balls he's juggling in the air, apparently so have his followers.