Germany on Tuesday completed construction of its first floating terminal for liquefied natural gas (LNG) at the North Sea port of Wilhelmshaven as it scrambles to secure more LNG and move away from Russian pipeline gas.

“The new LNG landing place is a big step towards a secure energy supply,” said Lower Saxony economy minister Olaf Lies in a statement.

A floating storage and regasification (FSRU) unit will be moored at a now expanded pier before the end of this year and enabled to regasify LNG arriving on special tankers, it said.

Environment minister Christian Meyer said he was pursuing a dual strategy with LNG used to meet short-term energy demand but the long-term focus would be expanding renewables in the wind-swept state, which will also employ an FSRU at the Stade river port.

The new port infrastructure will be equipped to switch to future imports of low-carbon energy sources such as hydrogen.

“Fossil gases must be replaced by climate-neutral gases as quickly as possible,” Meyer said.

Germany relied on Russia for nearly a third of its gas last year but Berlin, which aims to halt any remaining Russian flows by the summer of 2024, in May started fast-tracking FSRU applications and related ones for more permanent, onshore LNG reception terminals at some sites.

The designated Wilhelmshaven FSRU, the vessel Hoegh Esperanza, is still located at a shipyard in Brest, France, Eikon Refinitiv ship tracking data showed.

A spokesperson for the ministry led by Lies said the Esperanza was expected to arrive fully laden in mid-December and would be unloaded. From January onwards, more LNG tankers would arrive and the Esperanza will be moored to process their volumes.

The U.S has “no right” to interfere in Chinese cooperation with Germany, China’s foreign ministry said Thursday, after Washington cautioned against Beijing getting a controlling stake in Hamburg’s port terminal.

U.S. interference is symptomatic of its practice of coercive diplomacy, foreign ministry spokesman Zhao Lijian told reporters at a daily briefing in Beijing.

“Pragmatic cooperation between China and Germany is a matter for the two sovereign countries, the United States should not attack it without reason and has no right to meddle and interfere,” Zhao said Thursday, a day before German Chancellor Olaf Scholz was due in Beijing for a one day visit where he is expected to meet President Xi Jinping.

Chinese shipping giant Cosco made a bid last year to take a 35% stake in one of logistics firm HHLA’s three terminals in Germany’s largest port, but Germany’s coalition was divided over the deal.

Last week the German cabinet approved a 24.9% stake investment by Cosco in what an economy ministry source described as an “emergency solution” to approve the deal but mitigate the impact.

The approved investment does not give Cosco any say in management or strategic decisions.

Germany may allow China’s Cosco to take a smaller stake than originally planned in a Hamburg port terminal, in what an economy ministry source on Tuesday described as an “emergency solution” to approve the deal but mitigate the impact.

Shipping giant Cosco made a bid last year to take a 35% stake in one of logistics firm HHLA’s three terminals in Germany’s largest port, but the German coalition has been divided over whether to let the deal go ahead.

The compromise would see Berlin approving a sale of 24.9% of the terminal to Cosco, several government sources said. It will be discussed by the cabinet tomorrow.

The sources said Germany’s economy and foreign ministries still wanted to block the deal entirely but were unlikely to succeed, with Chancellor Olaf Scholz expected to prevail over the objections from other ministers.

HHLA declined comment and a Cosco representative was not immediately available for comment

How the government handles the matter is seen as a gauge of how far Germany is willing to toughen its stance on China, its top trading partner, due to concerns about being overly dependent on the increasingly assertive authoritarian country.

The news comes a week before Scholz is due to travel to China.

Supporters of the deal say it will allow Hamburg, where Scholz was mayor before becoming chancellor, to keep pace with rival ports that are also vying for Chinese trade and some of whom are partly owned by Cosco.

“The federal government departments involved see a limit to 24.9 percent as an ’emergency solution’ to prevent worse things from happening,” the economy ministry source said, adding a smaller stake would give Cosco less say in running the terminal.

“Of course, this does not solve the actual risk issues, so the departments continue to believe that a complete ban is the right way to go,” the source said, speaking on condition of anonymity because the matter is confidential.

A second source said the government could try to attach additional guarantees to the deal to further mitigate Cosco’s influence on the running of the port terminal.

“Of course it’s now up to Cosco to say we’re also happy with 24.9 percent,” a third source said.

Beijing has previously said it hoped Germany would view the deal in an “objective and rational light” without politicising economic relations.

Andreas Audretsch, a senior lawmaker from Scholz’s coalition partner the Greens, said his party wanted to ban the deal.

“The fact that Cosco should now take over less than 25 percent of the terminal is not a compromise, but an emergency solution to prevent worse things from happening,” he said.

“Germany can no longer afford to be naïve when dealing with autocracies.”

The European Commission warned the German government last spring not to approve an investment by China’s Cosco into Hamburg’s port, German daily Handelsblatt reported on Friday, citing sources.

Shipping giant Cosco last year made a bid to take a 35% stake in one of three terminals in Germany’s largest port in the northern city of Hamburg.

Germany’s ruling coalition is divided over whether to approve the investment, government sources say, even as Beijing urges Berlin not to politicize the bid and the port authority warns this could hurt the economy.

According to Handelsblatt, the EU warned that sensitive information about the business could make it into Chinese hands if Germany allowed the investment.

The German government, which is still weighing whether to approve the deal, declined to comment on the report. A spokesperson for Olaf Scholz said the German chancellor had not yet agreed with the relevant ministers how to proceed.

The Commission has said it does comment on individual cases.

European Union leaders are due to discuss on Friday reducing their economic dependency on China, among other topics, when they meet for a second day of talks in Brussels.

Water depths on the river Rhine in Germany have fallen after dry weather this week but remain well above the crisis lows of this summer, vessel brokers and commodity traders said on Friday.

Rain is expected in south German river catchment areas over the weekend and next week, which is expected to raise water levels again, they said.

Weeks of high temperatures and scant rainfall in August had reduced the commercial artery’s water levels, causing delays to shipping and pushing up freight costs. There were fears disruption could even hit overall German economic growth. read more

The reference water level at the chokepoint of Kaub near Koblenz was at 1.13 meters on Friday, down from 1.39 meters on Monday. But that is a huge improvement from only 32 centimeters in August, which caused significant shipping disruption.

Vessels need a Kaub reference waterline of about 1.5 meters to sail fully loaded.

Shallow water after this summer’s heatwave and drought compelled some freight vessels to sail about 25% full in August, increasing costs for cargo owners who needed more ships to deliver their goods.

Vessels are now able to sail with larger loads and prices for river transport have fallen from their peaks, brokers said.

Spot prices for a liquid tanker barge from Rotterdam to Karlsruhe south of Kaub were about 68 euros a tonne on Friday, down from about 69 euros a tonne late last week. Prices hit peaks of about 118 a tonne in August, against roughly 20 euros a tonne in June before water levels fell, brokers said.

The Rhine is an important shipping route for commodities including grains, minerals, coal and oil products including heating oil.

Rhine River is one of the world’s busiest waterways and major transport artery for the Western European countries located on the banks thereof. However, due to the hot and dry summer, water level in Rhine River has fallen dramatically, therefore, transportation of goods and raw materials has become difficult. This is another blow to the economics during the time of booming energy prices. Climate changes may lead to critical situation also in the years to come.

 

More than 1,300 km long Rhine River begins in the Swiss Alps and flows through the territory of Switzerland, Liechtenstein, Austria, Germany, France and the Netherlands where it eventually empties into the North Sea. It connects industrial regions in Switzerland, Germany and the Netherlands with the Europe’s largest ports in Rotterdam and Antwerp. Every year, hundreds of millions of tons of various goods are shipped along the Rhine River.

 

This summer, water levels have fallen to the lowest point of the last decade in several locations of the river, therefore vessels are forced to transport significantly lighter cargoes to avoid running aground.

 

Water in the Rhine River is provided by the melting Alpine glaciers and precipitation, but, during the recent years, contribution of glaciers has decreased, because, due to the climate changes, more glaciers melt in the summer than are created in the winter. Last winter, amount of the precipitation registered in the Swiss Alps was lower than usual, therefore, the glaciers keep shrinking. Whereas, this summer, Western Europe has experienced several heat waves and sustained draught, therefore water Rhine River rapidly runs out of water.

 

The Federal Ministry for Digital and Transport (Germany) warned on Wednesday that, in the following days, water level in the Rhine River may reach critically low points. According to the estimates of the ministry, today, water level will drop to 40 at one of the narrowest points of the Rhine River by the city of Kaub in the Western Germany, and it will keep falling during the weekend. Although the water level will exceed here the critical level of record-low 27 centimetres registered in October 2018, larger vessels may find passing through this section of river approximately halfway between Koblenz and Mainz difficult.

 

Mr Kristian Lorenz, representative of the logistics company HGK, characterised the situation as very serious one, however, not as dramatic as in the fall of 2018. Nevertheless, operators are forced to adapt themselves to the situation. “Due to the low water levels, vessels delivering, for example, salt from Heilbronn to Cologne, are capable of transporting mere 600 tons instead of the usual 2,200. The lower is the water level, the smaller cargo can be transported by the vessels”, Mr Lorenz told the news agency “Associated Press”.

 

Such German industrial tycoons as steel producer “Thyssenkrupp” and the world’s largest chemical producer BASF depend on supplies of raw materials and energy resources, for example, coal and fuel along the Rhine River. This week, BASF announced that in case, if water level will drop to 35 centimetres by Kaub, part of barges will not be able to pass section of river.

 

Mr Jörg Uwe Beltz, expert with the Federal Institute of Hydrology, ascertained that, as soon as the water level will drop to below the 40-centimetre mark by Kaub, further carriage for majority of barges will no longer be economically profitable. “Due to the low water level, shipping is limited in the Rhine River, therefore transportation capacity of the inland merchant vessel fleet is accordingly lower. But this means that everyone depending on this waterway has lower supply capacities,” said Beltz.

 

Further down the stream of the Rhine River, by Duisburg, where the world’s biggest river port is located, water level in the middle of the week had dropped to 172 centimetres. If water level will fall to 150 centimetres at that point, transport of materials like coke and iron ore will no longer be economically profitable.

 

Shipment prices have soared through the roof this summer. For example, this week delivery of a ton of fuel to the Swiss city Basel cost 267 euro. For a comparison, at the beginning of June, delivery of a ton of fuel cost 25 euro, reports the news agency “Bloomberg”.

 

Companies can deliver products and raw materials also using railways and roads, but these ways of delivery are currently even more expensive.

 

Operators are getting ready for the situation that water level in the Rhine River will reach very low points more and more frequently in the following years, said representative of the logistics company HGK Kristian Lorenz. “All the new vessels are ordered and built to be able to pass also at places where water level is critically low. This is adequate reaction in the current situation”, stresses Mr Lorenz.

 

Lack of water in the major waterway of the Western Europe may seriously undermine the European Union’s (EU) plans to reduce carriage of goods by road and direct these flows to the largest rivers. The EU’s intent provides for that, by 2050, transport of goods along waterways should increase by 50% to be able to significantly reduce the amount of greenhouse gases generated by transport sector.

 

Author: Roland Peterson, logistics expert

Germany and Canada are talking about a possible cooperation on ship yards, German Economy Minister Robert Habeck said on Tuesday during a two-day visit to Canada with the German chancellor.

The experts already for a long period assume that the consequences of Brexit will be noticeable in many places globally, and we understand that everybody in the European Union will face both consequences – political and economical. I agree to the view expressed by British expert and Professor Iain Begg that the EU should become more flexible, but at present there is no flexibility. Especially, taking into account the processes that take place in Germany – this makes it difficult for the EU to change the position. Let’s not forget that following the enlargement of the EU that comprises now 28 Member States it is considerably more difficult to achieve an agreement than 40 years ago, when there were only six Member States.

We cannot close our eyes and pretend that Brexit does not affect us. The crisis of German economy that is discussed now so widely might spread all over Europe after the impact of Brexit as the recession risk. The Central Bank of Germany also warns about German recession concern, because, under the influence of Brexit, there might be drastic decrease of the growth of automobile manufacturing industry. Having viewed different data, we may draw a conclusion that the fourth largest economy of the world faces recession. These are very harsh words, but it is a fact – German GDP during the second quarter decreased by 0.1 per cent.

In Germany it is possible to feel the decrease of manufacturing volume and slowing down of export, creating a chain reaction in the influence of other European countries, the import or the total demand from the main trade partners of Germany also decreases, for example, in France that the last year exported to Germany 70 billion dollars, in Italy – 59 billion dollars or in Spain – 34 billion dollars. There is also a risk that the companies of these countries will sell Germany less automobiles, parts of vehicles, and smaller countries this might be problematic, taking into consideration that Germany is their most important trade partner. For example, in 2017 one third of the export of the Czech Republic was exported to Germany, out of which 6 billion dollars constituted the trade of vehicle parts. It equals to 3.2% (all export) and 0.4% (only vehicle parts) of the economy of the Czech Republic.

German Bundesbank, emphasizing the decline of export, finds that Brexit and trade war between US and China are among the main factors that caused the decline of GDP by 0.1%, this, probably, will cause also similar decline in September.

German companies since January till May this year exported to Great Britain goods for approximately 35 billion euro – in comparison to the previous year, the decline constituted 2.3%. Meanwhile, the import from Great Britain decreased even more drastically – by 6.1% down to 15 billion euro. The main reason – continuous uncertainty in relation to the withdrawal of Great Britain from the EU and future economic relations.

Erik Schweitzer, President of the Association of German Chambers of Industry and Commerce (DIHK), already finds that Brexit has become a threat to German economy. According to him: “In total, 70% of German companies engaged in business activities in Great Britain anticipated that trade will have decline this year – in 2019. Meanwhile every eighth company operating there would like to redirect their investments to other markets – mostly to the countries of the EU internal market.”

The International Monetary Fund already reduced global economical growth forecast for this year down to 3.1%, warning about the negative impact of Brexit on the global economy in case of the withdrawal of Great Britain. The negative impact of Brexit on economy may be limited by smart and well-considered taxation policy in both Great Britain and Germany. However, according to the data of Halle Institute for Economic Research we can already see that Brexit “whip” will hit Germany hardest.

Source – https://www.globalresearch.ca/where-a-no-deal-brexit-would-hit-hardest/5668611

Craig Erlam, Senior Market Analyst at OANDA, said that, irrespective of recent forecast, the economic decline hit Germany more than the United Kingdom. He mentioned that: “It is very difficult not to relate the economical issues of both countries, because they both concluded an agreement in the first quarter and are obviously not protected against the result of Brexit”.

The United Kingdom is the third largest export market in Europe for Germany and the fifth globally, and its total amount of goods in 2018 was 75 billion British pounds. I have no doubt that Germany will do its utmost that after Brexit Great Britain and the EU would have close partnership in future regarding many issues of cooperation that might be a guarantee for the survival of small countries.

According to the opinion of Germany, the final result of Brexit may be on 31 October. Therefore, before providing a forecast on the economic stability of the EU Member States, let’s initially wait for the nearest results at the end of October.

 

 

 

 

The experts already for a long period assume that the consequences of Brexit will be noticeable in many places globally, and we understand that everybody in the European Union will face both consequences – political and economical. I agree to the view expressed by British expert and Professor Iain Begg that the EU should become more flexible, but at present there is no flexibility. Especially, taking into account the processes that take place in Germany – this makes it difficult for the EU to change the position. Let’s not forget that following the enlargement of the EU that comprises now 28 Member States it is considerably more difficult to achieve an agreement than 40 years ago, when there were only six Member States.

We cannot close our eyes and pretend that Brexit does not affect us. The crisis of German economy that is discussed now so widely might spread all over Europe after the impact of Brexit as the recession risk. The Central Bank of Germany also warns about German recession concern, because, under the influence of Brexit, there might be drastic decrease of the growth of automobile manufacturing industry. Having viewed different data, we may draw a conclusion that the fourth largest economy of the world faces recession. These are very harsh words, but it is a fact – German GDP during the second quarter decreased by 0.1 per cent.

In Germany it is possible to feel the decrease of manufacturing volume and slowing down of export, creating a chain reaction in the influence of other European countries, the import or the total demand from the main trade partners of Germany also decreases, for example, in France that the last year exported to Germany 70 billion dollars, in Italy – 59 billion dollars or in Spain – 34 billion dollars. There is also a risk that the companies of these countries will sell Germany less automobiles, parts of vehicles, and smaller countries this might be problematic, taking into consideration that Germany is their most important trade partner. For example, in 2017 one third of the export of the Czech Republic was exported to Germany, out of which 6 billion dollars constituted the trade of vehicle parts. It equals to 3.2% (all export) and 0.4% (only vehicle parts) of the economy of the Czech Republic.

German Bundesbank, emphasizing the decline of export, finds that Brexit and trade war between US and China are among the main factors that caused the decline of GDP by 0.1%, this, probably, will cause also similar decline in September.

German companies since January till May this year exported to Great Britain goods for approximately 35 billion euro – in comparison to the previous year, the decline constituted 2.3%. Meanwhile, the import from Great Britain decreased even more drastically – by 6.1% down to 15 billion euro. The main reason – continuous uncertainty in relation to the withdrawal of Great Britain from the EU and future economic relations.

Erik Schweitzer, President of the Association of German Chambers of Industry and Commerce (DIHK), already finds that Brexit has become a threat to German economy. According to him: “In total, 70% of German companies engaged in business activities in Great Britain anticipated that trade will have decline this year – in 2019. Meanwhile every eighth company operating there would like to redirect their investments to other markets – mostly to the countries of the EU internal market.”

The International Monetary Fund already reduced global economical growth forecast for this year down to 3.1%, warning about the negative impact of Brexit on the global economy in case of the withdrawal of Great Britain. The negative impact of Brexit on economy may be limited by smart and well-considered taxation policy in both Great Britain and Germany. However, according to the data of Halle Institute for Economic Research we can already see that Brexit “whip” will hit Germany hardest.

Source – https://www.globalresearch.ca/where-a-no-deal-brexit-would-hit-hardest/5668611

Craig Erlam, Senior Market Analyst at OANDA, said that, irrespective of recent forecast, the economic decline hit Germany more than the United Kingdom. He mentioned that: “It is very difficult not to relate the economical issues of both countries, because they both concluded an agreement in the first quarter and are obviously not protected against the result of Brexit”.

The United Kingdom is the third largest export market in Europe for Germany and the fifth globally, and its total amount of goods in 2018 was 75 billion British pounds. I have no doubt that Germany will do its utmost that after Brexit Great Britain and the EU would have close partnership in future regarding many issues of cooperation that might be a guarantee for the survival of small countries.

According to the opinion of Germany, the final result of Brexit may be on 31 October. Therefore, before providing a forecast on the economic stability of the EU Member States, let’s initially wait for the nearest results at the end of October.

 

 

 

 

At present the most recent GDP report of Germany on the decrease by 0.1% certainly marks the end of the decade of golden economy for the economy of Germany. Although the rate of economical growth has decreased, it should be mentioned that there is no critical decline yet – we can still manage to avoid it, if there will be taken all necessary measures. Olaf Scholz, Federal Minister of Finance of Germany, said that Germany has a fiscal ability to “powerfully” overcome any future economical crisis. He made to assume that Berlin might ensure additional expenditure up to 50 billion euro (45.7 billion British pounds). I can only agree to the position of Peter Chatwell, head of rate strategy at Japanese bank Mizuho that the recession threats might make Germany to become active again. He said: “The fiscal stimulus of Germany depends from recession, and the present laws enable that already.”

According to German economist Carsten Brzeski, the trade conflicts between countries, global uncertainty and complicated automobile manufacturing industry at present bring Germany to its knees. One of the solutions that would help the largest European economy to stop easily its decline is to reduce it to the long-term stagnation, however, I have doubts, whether it would be the best solution.

At present the economy of Germany has become amazingly dependent on export.  Germany already long ago has had the tendency to trade surplus, but it has never been so significant. Within the last years the National debt has considerably decreased, and many developers of European policy have encouraged German government to spend more.

The average trade surplus in the country is almost 8% out of GDP since 2005 and 6.5% since 2004. With almost 300 billion dollars in 2018 the surplus of German trade is almost the largest in the world. Specially towards the trade oriented German economy is the reason why it earlier after the crisis recovered considerably sooner than other countries. At present Germany manufactures significantly more than consumes and since 2013 there has been fiscal surplus accumulated, while US consumes more than manufactures. It is very unusual that so large economy as Germany is so sensitive to the fluctuations of external demand.

At present, other Member States of the eurozone also show the indications for weaker economic activity. German Council of Economic Experts lowers forecast for the real GDP increase in the eurozone down to 1.2% in 2019. In 2020 the rate of increase is forecasted upwards by 14%. In addition to the unclear outcome of Brexit negotiations, the unsolved trade conflict between the United States of America, Europe and China, as well as the threats of the slowdown of Chinese economy are stronger than it was expected before. Taking into consideration relatively slow global economic impulse, different taxation protection measures might prevent the recession of German economy.

One of the main global automobile industry driving forces during the last decade has been the economic growth of developing countries, which has facilitated demand for the import automobiles, besides – these countries also had relatively high natural increase of population that increases the number of potential buyers of automobiles even more. Germany traditionally has relied on selling its manufactured products, for example, automobiles, abroad. But during the economical growth this has always been the heel of Achilles during the global falls. Irrespective of the fact that during the last decade Germany has been an outstanding example and exception for the European economic weakness, Marcel Fratzscher, president of the Berlin-based economic research institute DIW Berlin, finds that “there is already technical decline in Germany, because the third quarter has weak development”. Weak consumers’ demand both domestically and internationally, as well as introduction of more strict standard of fuel emissions for automobile manufacturers temporary slowed down production.

The weakness of European economy giant has alarmed many people outside Germany. The decline takes place in German economy following the warning expressed by national central bank that the fall of export in summer will continue also in autumn. Bundesbank declared that the decrease of demand for the equipment for motor roads and industry observed in the second quarter will likely continue also in the third quarter, leaving economy on the margin of technical decline, which is defined as two successive quarters following the negative GDP increase. The bank analysts find that common economical indicators again might a bit decrease. Principally, the basis for that is the present industrial decline.

The economical stability of Germany was studied by BBC approximately eight years ago, emphasizing, how this super power has managed to sustain its positions of the global market leader, to save euro and to protect other countries against the recession, as well as to maintain the large volumes of export. At present the situation has changed drastically. However, it is a normal and understandable phenomenon in economy. Already since the beginning of the 19^th century the market economy has faced regular developments and falls. It is assumed that market economy has cyclic development, which means that there are both economical booms and falls. The most significant economical falls we call crises. The present recession in Germany makes to reconsider what has happened during this decade. May be it is even necessary to fall, irrespective of pain we would suffer, and then to get up and continue our path with renewed strength.