Photo : Sarah Meyssonnier via AP
27 November 2024, Wednesday | NIAS Europe Daily Brief #995
FRANCE
Prime Minister Barnier warns of fiscal deficit if the government collapses
On 26 November, Politico reported on the statements of French Prime Minister Michel Barnier on the uncertainty of the French government and economy. He said: “There’s likely to be a serious storm and serious turbulence on the financial markets if the government collapses.” The proposed budget by Barnier has been debated for weeks. The budget includes EUR 40 billion in spending cuts and EUR 20 billion in tax hikes. This was intended to reduce France’s deficit which is estimated to come in at 6.1 per cent of GDP in 2024. However, upon the budget, the left lawmakers of the coalition were planning to pass a no-confidence motion. National Rally’s leader Marine Le Pen also threatened to withdraw her support if the higher taxes on electricity were not removed from the budget. Barnier reminded that France would face a fiscal deficit amidst a worsening German economy and a possible trade- war with the US. (Joshua Berlinger, “French PM Barnier: A ‘serious storm’ is on the horizon if the French government falls,” Politico, 26 November 2024)
Marine Le Pen awaits the date of her judgment day
On 27 November, Politico reported that National Rally leader and upcoming Presidential candidate Marine Le Pen was set to be revealed. She along with 26 of her party members are the convicted of an ongoing trial over the embezzlement of EU Parliament funds. The Prosecutors have asked for five years of imprisonment, fines and a political ban for at least five years for Le Pen which could destroy her political career. (Victor Goury-Laffont, “Marine Le Pen to learn verdict date in trial that could destroy her political career,” Politico, 27 November 2024)
GERMANY
Expected to face a 10 per cent contraction in workforce, says a study
On 26 November, Deutsche Welle reported on a study conducted by the Bertelsmann Foundation on the shrinking workforce in Germany. The study said that Germany’s workforce would reduce by 10 per cent by 2040 without “substantial immigration.” It would drop from 46.4 million to 41.9 million in 2040 without at least 288000 skilled foreign workers per year. According to Germany’s migration experts, the demographic shift needed immigration. For this, they suggested better reforms and removal of restrictions for immigrants. Some of the migrants reported to have faced discrimination and rejection in their work environments. This reduction in workforce was expected to affect North Rhine-Westphalia, Thuringia and Saxony-Anhalt and the small state of Saarland on the French border. (“Germany: 288,000 foreign workers needed annually until 2040,” Deutsche Welle, 26 November 2024)
Plans to convert buildings into bunkers amid international threat
On 26 November, Euronews reported that Germany was planning to convert a number of public and private buildings including car parks and underground train stations into bunkers. An app to locate the bunkers and emergency shelters was also planned for the citizens. According to a spokesperson from the Interior Ministry, citizens were also encouraged to turn their own basements and garages into shelters in case of an emergency. Germany's tabloid BILD said that this plan was to counter any incoming threat to Germany. It came amidst increasing international threat in the wake of Russia’s war against Ukraine. On this, German authorities said that the project will be time-consuming with the involvement of several authorities. Civil protection organisations have also called for the expansion of shelters and bunkers. Germany has currently 579 bunkers. (Tamsin Paternoster, “Germany plans to turn buildings into bomb shelters,” Euronews, 26 November 2024)
Government faces difficulty as Volkswagen warns of shutting down outlets
On 27 November, Politico reported on the struggle faced by Germany’s politicians amidst the economic downturn and labour protests. Volkswagen, Germany’s biggest carmaker warns of shutting down outlets for the first time in its 87-year history. With this, “labour frustration and massive strikes” is expected to happen in the future. However, the German government is facing this challenge amidst the collapse of the government and a worsening economy. With the upcoming US President Donald Trump, Germany is set to face new tariffs which will turn downgrade the economy. Since the automotive sector is responsible for 11 per cent of manufacturing jobs in Germany, its decrease would affect the economy harder. (Nette Nöstlinger, “Germany’s industrial bloodbath leaves politicians fumbling for answers,” Politico, 27 November 2024)