Dr. Daniel Steiners This is not an obituary for Germany’s economic standing. It is an invitation to shift perspective: away from the language of crisis and toward a clearer view of our opportunities — and toward the confidence that we have more capacity to shape our future than the mood indicators might suggest. For years, Germany seemed to be traveling along a self-evident path of success: growth, prosperity, the title of export champion. But that framework is beginning to fray. Other countries are catching up. Parts of our industrial base appear vulnerable to the pressures of transformation. And global dependencies are turning into strategic vulnerabilities. In short, the German model of success is under strain. Yet a glance at Europe’s economic history suggests that moments like these can also contain enormous potential — if strategic thinking and decisive action come together. One example, which I find particularly striking, takes us back to 1900. At the time, André and Édouard Michelin were producing tires in a relatively small market, when the automobile itself was still a niche product. They could have focused simply on improving their product. Instead, they thought bigger; not in silos, but in systems. With the Michelin Guide, they created incentives and orientation for greater mobility: workshop directories, road maps, and recommendations for hotels and restaurants made travel more predictable and attractive. What began as a service booklet for motorists gradually evolved into an entire ecosystem — and eventually into a globally recognized benchmark for quality. > In times of change, those who recognize connections and are willing to shape > them strategically can transform uncertainty into lasting strength. What makes this example remarkable is that the real innovation did not lie in the tire itself or merely even a clever marketing idea to boost sales. It lay in something more fundamental: connected thinking and ecosystem thinking. The decision to see mobility as a broad space for value creation. It was the courage to break out of silos, to recognize strategic connections, to deepen value chains — and to help define the standards of an emerging market. That is precisely the lesson that remains relevant today, including for policymakers. In times of change, those who recognize connections and are willing to shape them strategically can transform uncertainty into lasting strength. Germany’s industrial health economy is still too often viewed in public debate in narrowly sectoral terms — primarily through the lens of health care provision and costs. Strategically, however, it has long been an industrial ecosystem that spans research, development, manufacturing, digital innovation, exports and highly skilled employment. Just as Michelin helped shape the ecosystem of mobility, Germany can think of health as a comprehensive domain of value creation. The industrial health economy: cost driver or engine of growth? Yes, medicines cost money. In 2024, Germany’s statutory health insurance system spent around €55 billion on pharmaceuticals. But much of that increase reflects medical progress and the need for appropriate care in an aging society with changing disease patterns. Innovative therapies benefit both patients and the health system. They can improve quality and length of life while shifting treatment from hospitals into outpatient care or even into patients’ homes. They raise efficiency in the system, reduce downstream costs and support workforce participation. > In short, the industrial health economy is not merely part of our health care > system. It is a key industry, underpinning economic strength, prosperity and > the financing of our social security systems. Despite public perception, pharmaceutical spending has remained remarkably stable for years, accounting for roughly 12 percent of total expenditures in the statutory health insurance system. That figure also includes generics — medicines that enter the ‘world heritage of pharmacy’ after patent protection expires and remain available at low cost. Truly innovative, patent-protected medicines account for only about seven percent of total spending. Against these costs stands an economic sector in which Germany continues to hold a leading international position. With around 1.1 million employees and value creation exceeding €190 billion, the industrial health economy is among the largest sectors of the German economy. Its high-tech products, bearing the Made in Germany label, are in demand worldwide and contribute significantly to Germany’s export surplus. In short, the industrial health economy is not merely part of our health care system. It is a key industry, underpinning economic strength, prosperity and the financing of our social security systems. Its overall balance is positive. The central question, therefore, is this: how can we unlock its untapped potential? And what would it mean for Germany if we fail to recognize these opportunities while economic and innovative capacity increasingly shifts elsewhere? Global dynamics leave little room for hesitation Governments around the world have long recognized the strategic importance of the industrial health economy — for health care, for economic growth and for national security. China is demonstrating remarkable speed in scaling and implementing biotechnology. The United States, meanwhile, illustrates how determined industrial policy can look in practice. Regulatory authorities are being modernized, approval procedures accelerated and bureaucratic barriers systematically reduced. At the same time, domestic production is being strategically strengthened. Speed and market size act as magnets for capital — especially in a sector where research is extraordinarily capital-intensive and requires long-term planning security. When innovation-friendly conditions and economic recognition of innovation meet a large, well-funded market, global shifts follow. Today roughly 50 percent of the global pharmaceutical market is located in the United States, about 23 percent in Europe — and only 4 to 5 percent in Germany. This distribution is no coincidence; it reflects differences in economic and regulatory environments. At the same time, political pressure is growing on countries that benefit from the American innovation engine without offering an equally attractive home market or recognizing the value of innovation in comparable ways. Discussions around a Most Favored Nation approach or other trade policy instruments are moving in precisely that direction — and they affect Europe and Germany directly. For Germany, the implications are clear. Those who want to attract investment must strengthen their competitiveness. Those who want to ensure reliable health care must appropriately reward new therapies. Otherwise, these global dynamics will inevitably affect both the economy and health care at home. Already today, roughly one in four medicines introduced in the United States between 2014 and 2023 is not available in Europe. The gap is even larger for gene and cell therapies. The primacy of industrial policy: from consensus to action — now Germany does not lack potential or substance. We still have a strong industrial base, a tradition of invention, outstanding universities and research institutions, and a private sector willing to invest. Political initiatives such as the coalition agreement, the High-Tech Agenda and plans for a future strategy in pharmaceuticals and medical technology provide important impulses, which I strongly welcome. > A fair market environment without artificial price caps or rigid guardrails is > the strongest magnet for private capital, long-term investment and a resilient > health system. But programs must now translate into a coherent action plan for growth. We need innovation-friendly and stable framework conditions that consider health care, economic strength and national security together — as a strategic ecosystem, not as separate silos. The value of medical innovation must also be recognized in Germany. A fair market environment without artificial price caps or rigid guardrails is the strongest magnet for private capital, long-term investment and a resilient health system. Faster approval procedures, consistent digitalization and a determined reduction of bureaucracy are essential if speed is once again to become a competitive advantage and a driver of innovation. Germany can reinvent itself, of that I am convinced. With courage, strategic determination and an ambitious push for innovation. The choice now lies with us: to set the right course and unlock the potential that is already there.

Czech President Petr Pavel approved Prime Minister Andrej Babiš’s nominee for environment minister, ending months of turmoil marked by blackmail allegations, protests and political scandal. Igor Červený, a member of the right-wing populist Motorists party led by Foreign Minister Petr Macinka, takes over as a second choice after Pavel blocked the nomination of former MEP Filip Turek due to allegations of involvement in numerous scandals. Macinka also led the environment ministry in an interim capacity before Červený’s appointment, scrapping its climate protection section during his short-lived reign. “The environment ministry has, in recent times, been marked by a number of emotions, as if all the issues this ministry should be dealing with had been reduced to some kind of fight against green ideologies. I am convinced that we should do everything possible to return to the essence of what this ministry is for, which is environmental protection,” Pavel said after appointing Červený at Prague Castle on Monday. A first-term MP elected last October, Červený is an IT specialist and digitalization expert who serves as deputy chair of the Czech parliament’s economic committee and rejects “green demagogy.” Červený has vowed to “protect nature, free ourselves from green ideology and defend our industry.” He also has criticized renewable energy sources and the EU emissions trading scheme, similar to Babiš, who has called it “an absolute disaster.” The Motorists party was insistent on Turek being installed as the environment minister, even leading to a bitter standoff between Macinka and Pavel that saw allegations of blackmail and threats aimed at the president. A new position was created for Turek in the ministry as commissioner for climate policy and the Green Deal. The former racecar driver posted a video on Instagram before the appointment of Červený, saying: “It will be a minister who is very serious and who will do at the ministry what I want him to do.” He then called himself “the wiser one” for stepping back.

Listen on * Spotify * Apple Music * Amazon Music In der rheinland-pfälzischen Landeshauptstadt Mainz bereitet sich Alexander Schweitzer auf seine erste Bewährungsprobe als gewählter Regierungschef vor. Es ist ein Spiel gegen die Zeit und gegen den Bundestrend, bei dem der SPD-Ministerpräsident auf die Karte des regionalen Pragmatismus setzt. Während die Bundespolitik in Berlin oft von schrillen Tönen geprägt ist, kultiviert Schweitzer auch im Wahlkampf bis zum 22. März das Image einer soliden, fast schon demonstrativ unaufgeregten Regierungsarbeit als Markenkern. Um die jahrzehntelange Vorherrschaft seiner Partei an Rhein und Mosel gegen eine erstarkende CDU zu verteidigen. Im Gespräch mit Alexander Schweitzer geht es um das Spannungsfeld zwischen sozialdemokratischen Gerechtigkeitsfragen und der notwendigen Nähe zum Mittelstand. Er skizziert seine Vision einer Erbschaftsteuer, die extrem vermögende Dynastien stärker in die Pflicht nimmt, ohne dabei das Rückgrat der heimischen Wirtschaft zu gefährden. Dabei wird deutlich, wie sehr der „rheinland-pfälzische Weg“ auf persönlichem Vertrauen und einer bewussten Abgrenzung vom Berliner Polit-Chaos fußt, wobei Schweitzer auch für unkonventionellen Allianzen und um liberale Wähler wirbt. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. ⁠Jetzt kostenlos abonnieren.⁠ Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: ⁠@gordon.repinski⁠ | X: ⁠@GordonRepinski⁠. POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna

It seems impossible to have a conversation today without artificial intelligence (AI) playing some role, demonstrating the massive power of the technology. It has the potential to impact every part of business, and European policymakers are on board. In February 2025, Ursula von der Leyen, the European Commission president, said, “We want Europe to be one of the leading AI continents … AI can help us boost our competitiveness, protect our security, shore up public health, and make access to knowledge and information more democratic.” Research from Nokia suggests that businesses share this enthusiasm and ambition: 84 percent of more than 1,000 respondents said AI features in the growth strategy of their organization, while 62 percent are directing at least 20 percent of ICT capex budgets toward the technology. However, the equation is not yet balanced. Three-quarters of survey respondents state that current telecom infrastructure limits the ability to deliver on those ambitions. Meanwhile, 45 percent suggest these limitations would delay, constrain or entirely limit investments. There is clearly a disconnect between the ambition and the ability to deliver. At present, Europe lags the United States and parts of Asia in areas such as network deployment, related investment levels and scale. > If AI does not reach its full potential, EU competitiveness will suffer, > economic growth will have a ceiling, the creation of new jobs will have a > limit and consumers will not see the benefits. What we must remember primarily is that AI does not happen without advanced, trusted and future-proofed networks. Infrastructure is not a ‘nice to have’ it is a fundamental part. Simply put, today’s networks in Europe require more investments to power the AI dream we all have. If AI does not reach its full potential, EU competitiveness will suffer, economic growth will have a ceiling, the creation of new jobs will have a limit and consumers will not see the benefits. When we asked businesses about the challenge of meeting AI demands during our research, the lack of adequate connectivity infrastructure was the fourth common answer out of 15 potential options. Our telecom connectivity regulatory approach must be more closely aligned with the goal of fostering AI. That means progressing toward a genuine telecom single market, adopting a novel approach to competition policy to allow market consolidation to lead to more investments, and ensuring connectivity is always secure and trusted. Supporting more investments in next-generation networks through consolidation AI places heavy demands on networks. It requires low latency, high bandwidth and reliability, and efficient traffic management. To deliver this, Europe needs to accelerate investment in 5G standalone, fiber to enterprises, edge data centers and IP-optical backbone networks optimized for AI. > As industry voices such as Nokia have emphasized, the networks that power AI > must themselves make greater use of automation and AI. Consolidation (i.e. reducing the number of telecom operators within the national telecom markets of EU member states) is part of the solution. Consolidation will allow operators to achieve economies of scale and improve operating efficiency, therefore encouraging investment and catalyzing innovation. As industry voices such as Nokia have emphasized, the networks that power AI must themselves make greater use of automation and AI. Policy support should therefore extend to both network innovation and deployment. Trust: A precondition for AI adoption Intellectual property (IP) theft is a threat to Europe’s industrial future and only trusted technology should be used in core functions, systems and sectors (such as energy, transport and defense). In this context, the underlying connectivity should always be secure and trusted. The 5G Security Toolbox, restricting untrusted technology, should therefore be extended to all telecom technologies (including fiber, optics and IP) and made compulsory in all EU member states. European governments must make protecting their industries and citizens a high priority. Completing the digital single market Although the single market is one of Europe’s defining projects, the reality in telecoms — a key part of the digital single market — is still fragmented. As an example, different spectrum policies create barriers across borders and can limit network roll outs. Levers on top of advanced connectivity To enable the AI ecosystem in Europe, there are several different enabling levers European policymakers should advance on top of fostering advanced and trusted connectivity: * The availability of compute infrastructure. The AI Continent Action Plan, as well as the IPCEI Compute Infrastructure Continuum, and the European High-Performance Computing Joint Undertaking should facilitate building AI data centers in Europe.   * Leadership in edge computing. There should also be clear support for securing Europe’s access to and leadership in edge solutions and building out edge capacity. Edge solutions increase processing speeds and are important for enabling AI adoption, while also creating a catalyst for economic growth. With the right data center capacity and edge compute capabilities available, European businesses can meet the new requirements of AI use cases.  * Harmonization of rules. There are currently implications for AI in several policy areas, including the AI Act, GDPR, Data Act, cybersecurity laws and sector-specific regulations. This creates confusion, whereas AI requires clarity. Simplification and harmonization of these regulations should be pursued.  * AI Act implementation and simplification. There are concerns about the implementation of the AI Act. The standards for high-risk AI may not be available before the obligations of the AI act enter into force, hampering business ambitions due to legal uncertainty. The application date of the AI Act’s provisions on high-risk AI should be postponed by two years to align with the development of standards. There needs to be greater clarity on definitions and simplification measures should be pursued across the entire ecosystem. Policies must be simple enough to follow, otherwise adoption may falter. Policy needs to act as an enabler, not a barrier to innovation.  * Upskilling and new skills. AI will require new skills of employees and users, as well as creating entirely new career paths. Europe needs to prepare for this new world.  If Europe can deliver on these priorities, the benefits will be tangible: improved services, stronger industries, increased competitiveness and higher economic growth. AI will deliver to those who best prepare themselves. We must act now with the urgency and consistency that the moment demands. -------------------------------------------------------------------------------- Author biography: Marc Vancoppenolle is leading the geopolitical and government relations EU and Europe function at Nokia. He and his team are working with institutions and stakeholders in Europe to create a favorable political and regulatory environment fostering broadband investments and cross sectoral digitalization at large. Vancoppenolle has over 30 years of experience in the telecommunication industry. He joined Alcatel in 1991, and then Alcatel-Lucent, where he took various international and worldwide technical, commercial, marketing, communication and government affairs leadership roles. Vancoppenolle is a Belgian and French national. He holds a Master of Science, with a specialization in telecommunication, from the University of Leuven complemented with marketing studies from the University of Antwerp. He is a member of the DIGITALEUROPE Executive Board, Associate to Nokia’s CEO at the ERT (European Round Table for Industry), and advisor to FITCE Belgium (Forum for ICT & Media professionals). He has been vice-chair of the BUSINESSEUROPE Digital Economy Taskforce as well as a member of the board of IICB (Innovation & Incubation Center Brussels).

Mathias Döpfner is chair and CEO of Axel Springer, POLITICO’s parent company. America and Europe have been transmitting on different wavelengths for some time now. And that is dangerous — especially for Europe. The European reactions to the new U.S. National Security Strategy paper and to Donald Trump’s recent criticism of the Old Continent were, once again, reflexively offended and incapable of accepting criticism: How dare he, what an improper intrusion! But such reactions do not help; they do harm. Two points are lost in these sour responses. First: Most Americans criticize Europe because the continent matters to them. Many of those challenging Europe — even JD Vance or Trump, even Elon Musk or Sam Altman — emphasize this repeatedly. The new U.S. National Security Strategy, scandalized above all by those who have not read it, states explicitly: “Our goal should be to help Europe correct its current trajectory. We will need a strong Europe to help us successfully compete, and to work in concert with us to prevent any adversary from dominating Europe.” And Trump says repeatedly, literally or in essence, in his interview with POLITICO: “I want to see a strong Europe.” The transatlantic drift is also a rupture of political language. Trump very often simply says what he thinks — sharply contrasting with many European politicians who are increasingly afraid to say what they believe is right. People sense the castration of thought through a language of evasions. And they turn away. Or toward the rabble-rousers. My impression is that our difficult American friends genuinely want exactly what they say they want: a strong Europe, a reliable and effective partner. But we do not hear it — or refuse to hear it. We hear only the criticism and dismiss it. Criticism is almost always a sign of involvement, of passion. We should worry far more if no criticism arrived. That would signal indifference — and therefore irrelevance. (By the way: Whether we like the critics is of secondary importance.) Responding with hauteur is simply not in our interest. It would be wiser — as Kaja Kallas rightly emphasized — to conduct a dialogue that includes self-criticism, a conversation about strengths, weaknesses and shared interests, and to back words with action on both sides. Which brings us to the second point: Unfortunately, much of the criticism is accurate. Anyone who sees politics as more than a self-absorbed administration of the status quo must concede that for decades Europe has delivered far too little — or nothing at all. Not in terms of above-average growth and prosperity, nor in terms of affordable energy. Europe does not deliver on deregulation or debureaucratization; it does not deliver on digitalization or innovation driven by artificial intelligence. And above all: Europe does not deliver on a responsible and successful migration policy. The world that wishes Europe well looked to the new German government with great hope. Capital flows on the scale of trillions waited for the first positive signals to invest in Germany and Europe. For it seemed almost certain that the world’s third-largest economy would, under a sensible, business-minded and transatlantic chancellor, finally steer a faltering Europe back onto the right path. The disappointment was all the more painful. Aside from the interior minister, the digital minister and the economics minister, the new government delivers in most areas the opposite of what had been promised before the election. The chancellor likes to blame the vice chancellor. The vice chancellor blames his own party. And all together they prefer to blame the Americans and their president. Instead of a European fresh start, we see continued agony and decline. Germany still suffers from its National Socialist trauma and believes that if it remains pleasantly average and certainly not excellent, everyone will love it. France is now paying the price for its colonial legacy in Africa and finds itself — all the way up to a president driven by political opportunism — in the chokehold of Islamist and antisemitic networks. In Britain, the prime minister is pursuing a similar course of cultural and economic submission. And Spain is governed by socialist fantasists who seem to take real pleasure in self-enfeeblement and whose “genocide in Gaza” rhetoric mainly mobilizes bored, well-heeled daughters of the upper middle class. Hope comes from Finland and Denmark, from the Baltic states and Poland, and — surprisingly — from Italy. There, the anti-democratic threats from Russia, China and Iran are assessed more realistically. Above all, there is a healthy drive to be better and more successful than others. From a far weaker starting point, there is an ambition for excellence. What Europe needs is less wounded pride and more patriotism defined by achievement. Unity and decisive action in defending Ukraine would be an obvious example — not merely talking about European sovereignty but demonstrating it, even in friendly dissent with the Americans. (And who knows, that might ultimately prompt a surprising shift in Washington’s Russia policy.) That, coupled with economic growth through real and far-reaching reforms, would be a start. After which Europe must tackle the most important task: a fundamental reversal of a migration policy rooted in cultural self-hatred that tolerates far too many newcomers who want a different society, who hold different values, and who do not respect our legal order. If all of this fails, American criticism will be vindicated by history. The excuses for why a European renewal is supposedly impossible or unnecessary are merely signs of weak leadership. The converse is also true: where there is political will, there is a way. And this way begins in Europe — with the spirit of renewal of a well-understood “Europe First” (what else?) — and leads to America. Europe needs America. America needs Europe. And perhaps both needed the deep crisis in the transatlantic relationship to recognize this with full clarity. As surprising as it may sound, at this very moment there is a real opportunity for a renaissance of a transatlantic community of shared interests. Precisely because the situation is so deadlocked. And precisely because pressure is rising on both sides of the Atlantic to do things differently. A trade war between Europe and America strengthens our shared adversaries. The opposite would be sensible: a New Deal between the EU and the U.S. Tariff-free trade as a stimulus for growth in the world’s largest and third-largest economies — and as the foundation for a shared policy of interests and, inevitably, a joint security policy of the free world. This is the historic opportunity that Friedrich Merz could now negotiate with Donald Trump. As Churchill said: “Never waste a good crisis!”

Christian Lindner, Germany’s former finance minister, has long been passionate about cars. Now he’s taken on a key management role at a car dealership business. Lindner, the ex-leader of the car-friendly Free Democratic Party (FDP), a self-avowed car enthusiast known for driving a pricey vintage Porsche, announced he is taking a new position as deputy chairman of the board for Autoland AG, which calls itself Germany’s “largest auto discounter,” selling new and used cars. “Today, I want to be where the heart of the German economy beats,” Lindner wrote in an online post. “That it happens to be the automotive industry will not surprise anyone who knows my personal passions.” Autoland confirmed Lindner’s new role on Wednesday, saying he “will be responsible for marketing, sales, and digitalization.” Lindner served as finance minister in the troubled, three-party coalition government of previous Chancellor Olaf Scholz. Persistent conflicts over spending between Lindner’s fiscally conservative FDP and his left-leaning coalition partners led to the premature collapse of that government in late 2024, prompting an early federal election in February. During his time in office, Lindner pushed back against the EU’s planned phaseout of the combustion engine and was seen as close to the auto industry. In 2022, he was embroiled in a scandal over a text-message exchange with Porsche CEO Oliver Blume in which Lindner asked for “support with my arguments.” In the federal election earlier this year, Lindner’s FDP failed to reach the 5 percent threshold required for a party to make it into the Bundestag. He then stepped down as leader of the party, marking a stunning downfall for a politician once deemed by his peers to be a wunderkind of European fiscal conservatism. Under German law, former members of government have to report new private sector jobs for 18 months after leaving office. In cases involving potential conflicts of interest, the current government can disallow former officials from taking a job. German media poked fun at the former finance minister over his new job. “Christian Lindner joins the ranks of used car dealers,” ran the headline of a Spiegel article.

At New York Climate Week in September, opinion leaders voiced concern that high-profile events often gloss over the deep inequalities exposed by climate change, especially how poorer populations suffer disproportionately and struggle to access mitigation or adaptation resources. The message was clear: climate policies should better reflect social justice concerns, ensuring they are inclusive and do not unintentionally favor those already privileged.  We believe access to food sits at the heart of this call for inclusion, because everything starts with food: it is a fundamental human right and a foundation for health, education and opportunity. It is also a lever for climate, economic and social resilience.  > We believe access to food sits at the heart of this call for inclusion, > because everything starts with food This makes the global conversation around food systems transformation more urgent than ever. Food systems are under unprecedented strain. Without urgent, coordinated action, billions of people face heightened risks of malnutrition, displacement and social unrest.   Delivering systemic transformation requires coordinated cross-sector action, not fragmented solutions. Food systems are deeply interconnected, and isolated interventions cannot solve systemic problems. The Food and Agriculture Organization’s recent Transforming Food and Agriculture Through a Systems Approach report calls for systems thinking and collaboration across the value chain to address overlapping food, health and environmental challenges.   Now, with COP30 on the horizon, unified and equitable solutions are needed to benefit entire value chains and communities. This is where a systems approach becomes essential.  A systems approach to transforming food and agriculture  Food systems transformation must serve both people and planet. We must ensure everyone has access to safe, nutritious food while protecting human rights and supporting a just transition.   At Tetra Pak, we support food and beverage companies throughout the journey of food production, from processing raw ingredients like milk and fruit to packaging and distribution. This end-to-end perspective gives us a unique view into the interconnected challenges within the food system, and how an integrated approach can help manufacturers reduce food loss and waste, improve energy and water efficiency, and deliver food where it is needed most.   Meaningful reductions to emissions require expanding the use of renewable and carbon-free energy sources. As outlined in our Food Systems 2040 whitepaper,1 the integration of low-carbon fuels like biofuels and green hydrogen, alongside electrification supported by advanced energy storage technologies, will be critical to driving the transition in factories, farms and food production and processing facilities.   Digitalization also plays a key role. Through advanced automation and data-driven insights, solutions like Tetra Pak® PlantMaster enable food and beverage companies to run fully automated plants with a single point of control for their production, helping them improve operational efficiency, minimize production downtime and reduce their environmental footprint.  The “hidden middle”: A critical gap in food systems policy  Today, much of the focus on transforming food systems is placed on farming and on promoting healthy diets. Both are important, but they risk overlooking the many and varied processes that get food from the farmer to the end consumer. In 2015 Dr Thomas Reardon coined the term the “hidden middle” to describe this midstream segment of global agricultural value chains.2   This hidden middle includes processing, logistics, storage, packaging and handling, and it is pivotal. It accounts for approximately 22 percent of food-based emissions and between 40-60 percent of the total costs and value added in food systems.3 Yet despite its huge economic value, it receives only 2.5 to 4 percent of climate finance.4  Policymakers need to recognize the full journey from farm to fork as a lynchpin priority. Strategic enablers such as packaging that protects perishable food and extends shelf life, along with climate-resilient processing technologies, can maximize yield and minimize loss and waste across the value chain. In addition, they demonstrate how sustainability and competitiveness can go hand in hand.  Alongside this, climate and development finance must be redirected to increase investment in the hidden middle, with a particular focus on small and medium-sized enterprises, which make up most of the sector.   Collaboration in action  Investment is just the start. Change depends on collaboration between stakeholders across the value chain: farmers, food manufacturers, brands, retailers, governments, financiers and civil society.  In practice, a systems approach means joining up actors and incentives at every stage.5 The dairy sector provides a perfect example of the possibilities of connecting. We work with our customers and with development partners to establish dairy hubs in countries around the world. These hubs connect smallholder farmers with local processors, providing chilling infrastructure, veterinary support, training and reliable routes to market.6 This helps drive higher milk quality, more stable incomes and safer nutrition for local communities.  Our strategic partnership with UNIDO* is a powerful example of this collaboration in action. Together, we are scaling Dairy Hub projects in Kenya, building on the success of earlier initiatives with our customer Githunguri Dairy. UNIDO plays a key role in securing donor funding and aligning public-private efforts to expand local dairy production and improve livelihoods. This model demonstrates how collaborations can unlock changes in food systems.  COP30 and beyond  Strategic investment can strengthen local supply chains, extend social protections and open economic opportunity, particularly in vulnerable regions. Lasting progress will require a systems approach, with policymakers helping to mitigate transition costs and backing sustainable business models that build resilience across global food systems for generations to come.   As COP30 approaches, we urge policymakers to consider food systems as part of all decision-making, to prevent unintended trade-offs between climate and nutrition goals. We also recommend that COP30 negotiators ensure the Global Goal on Adaptation include priorities indicators that enable countries to collect, monitor and report data on the adoption of climate-resilient technologies and practices by food processors. This would reinforce the importance of the hidden middle and help unlock targeted adaptation finance across the food value chain.  When every actor plays their part, from policymakers to producers, and from farmers to financiers, the whole system moves forward. Only then can food systems be truly equitable, resilient and sustainable, protecting what matters most: food, people and the planet.  * UNIDO (United Nations Industrial Development Organization)  Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Tetra Pak * The ultimate controlling entity is Brands2Life Ltd * The advertisement is linked to policy advocacy regarding food systems and climate policy More information here. https://www.politico.eu/7449678-2

Small and medium-sized enterprises (SMEs) in Germany do not complain. They work. They adapt to external circumstances and are successful with their products against all odds. Many of them worldwide. This is the secret of their success. But the current economic situation gives cause for concern. We launched our DATEV SME Index a year ago. Our index provides up-to-date, fact-based and broad insights into German SMEs in a way that has not been available before: it is based on the advance VAT returns of more than one million SMEs and the payroll accounts of more than eight million employees. As an IT service provider for the tax consulting profession, this effectively lets us look directly into the engine room of German SMEs. But this detailed view is not very pleasant at the moment. The figures we publish each month based on data from tax advisors paint an almost worrying picture. The increase in the minimum wage that has already been decided is likely to exacerbate this situation for small and micro-enterprises. Sales are falling, wages are rising The German economy is in a difficult situation. Since September 2024, we have observed declining sales in SMEs. Concurrently, wages are increasing. Our latest statistics show that this trend is continuing — in all German federal states, industries and company sizes. There is currently no indication of a change in this trend. As previously described, SMEs rarely voice dissatisfaction. Instead, they seek pragmatic solutions. This challenging situation is no different. There are in fact a number of ways to resolve this issue. Many SMEs are looking to the federal government with high expectations. They expect it to pursue business-friendly policies to strengthen the backbone of the German economy. Small and medium-sized companies represent 99 percent of it and employ around half of the workforce in Germany. Without relief and incentives, the existence of many SMEs is increasingly at risk. Above all, we need to reduce bureaucracy and implement a bureaucracy moratorium: meaning the standardization and reduction of documentation and retention requirements. > Above all, we need to reduce bureaucracy and implement a bureaucracy > moratorium: meaning the standardization and reduction of documentation and > retention requirements. Financial incentives for greater productivity The regulatory frenzy of recent decades in Germany and in the EU makes it difficult for companies to catch their breath. It not only costs SMEs time and money, but it also hinders innovation. But there are now initial indications that something is being done about this. The importance and necessity to modernize the administration has been recognized and will be supported financially. A separate ministry for digital transformation and state modernization is a positive first step. > The German government has also already decided on the so-called investment > booster. However, this will only help to a limited extent The German government has also already decided on the so-called investment booster. However, this will only help to a limited extent. The investment booster allows for declining balance depreciation of up to 30 percent, which enables companies to write off higher amounts, especially in the first few years. This is intended to accelerate investment and secure liquidity for businesses. However, this only helps if there is still enough substance or capital available for further financing. And in many cases, this is no longer the case for SMEs. In order to boost productivity, financial incentives must be provided as quickly as possible. It is our hope that there will be extensive investments in infrastructure and the digitalization of administration as well. Artificial intelligence creates greater efficiency Another encouraging sign: new technological advancements facilitate operations for business. Artificial intelligence (AI) is more than just a buzzword. As Germany’s second largest software company, we are dedicated to developing innovative products and solutions for tax firms, so that they can provide even more exceptional counsel to their clients — mostly small and medium-sized businesses. For me, it is evident that AI will positively transform work in tax consulting firms, creating significant opportunities. AI helps to simplify monotonous, repetitive tasks, allowing for more efficient workflow. It is a valuable tool for supporting individuals rather than replacing them. This is especially important in a time of pressing issues such as skilled worker shortages. The use of AI thus also offers new opportunities for all companies that wish to prioritize their core business over bureaucracy. Digital and AI-supported processes with tax advisors will provide sustainable support in this. The acceptance and use of AI tools is steadily increasing in tax consulting firms. Among the most widely used industry-specific offerings, the DATEV appeal generator and specialist research tools are highly regarded. It is clear that we have only just begun to see the full extent of the situation. We are working every day on new solutions that make it easier for tax consulting firms to better advise their client companies to improve their successes. We also use our detailed knowledge that we generate from our DATEV SME Index. > The smart use of AI can also enhance the success of German SMEs and strengthen > their ability to compete globally — despite existing regulatory challenges, > bureaucratic hurdles and complicated tax systems. Ultimately, it depends on how we deal with the challenges in our daily work. How we successfully shape the path to the digital future with the possibilities offered by AI. We have learned from major American software providers over the past 20 years that those who best understand the data business enjoy great economic success. Now comes the second chance. The smart use of AI can also enhance the success of German SMEs and strengthen their ability to compete globally — despite existing regulatory challenges, bureaucratic hurdles and complicated tax systems. So, enough whining. Let’s proceed! Robert Mayr, tax advisor, auditor and doctor of business administration, is CEO of DATEV eG since 2016. From 2014 to 2016, he was on the board of the Nuremberg-based data processing cooperative, responsible for finance and purchasing, and had already been responsible for internal data processing and production since 2011. After studying business administration at Ludwig Maximilian University in Munich, he began his professional career as a consultant at Treuhandanstalt Berlin. Mayr worked for Deloitte from 1994 to 2001, after which he spent nine years as managing partner of Solidaris Revisions-GmbH in Munich. Since 2012, Mayr has been vice president of the Nuremberg Chamber of Tax Consultants. DATEV eG is a data processing cooperative with more than 850,000 customers. Founded in 1966, it now employs a staff of about 9,000, working at its headquarters in Nuremberg and 22 branch offices throughout Germany. Its legal structure as a cooperative guarantees continuity, meaning no investor can buy DATEV. For more information on the DATEV Small and Medium-Sized Enterprises Index, please visit mittelstandsindex.datev.de (in German).

LONDON — Keir Starmer on Friday unveiled plans to roll out government-issued digital ID across the U.K.   His initial pitch is clear: digital ID will help combat illegal working and curb one of the “pull factors” driving unauthorized migration to the U.K.   “You will not be able to work in the United Kingdom if you do not have digital ID,” Starmer said in a speech on Friday morning.  This emphasis on tackling illegal work echoes proposals for a so-called “BritCard” laid out by influential think tank Labour Together in June. The paper was co-authored by Kirsty Innes, now a special advisor to new Technology Secretary Liz Kendall.   Historically the idea of introducing national ID in the U.K. has proven politically difficult. A pilot scheme launched by Tony Blair’s government was scrapped by the Conservative-Liberal Democrat coalition in 2010. Conservative leader Kemi Badenoch called the idea a “desperate gimmick that will do nothing to stop the boats.” A Reform UK spokesperson said that digital ID would have little effect on illegal working, and that all it would do is “impinge further on the freedoms of law-abiding Brits.” Liberal Democrat leader Ed Davey said the plan would do “next to nothing to tackle channel crossings,” and that the Lib Dems will “fight against it tooth and nail — just as we successfully did against Tony Blair’s ID cards.” But the devil is in the details, many of which the government is yet to clarify.   WHAT WE KNOW All U.K. citizens and legal residents will need to produce digital ID to prove their Right to Work by the end of this Parliament (which means August 2029 at the very latest). The ID will sit on people’s phones, similar to a contactless card.  Like an eVisa or passport, the ID will include a person’s name, date of birth, nationality or residency status, and photo. Subject to forthcoming consultation — timeline TBD — other details, such as address, could also be added to the mix.   The government said there will be “no requirement for individuals to carry their ID or be asked to produce it.” But given it will be mandatory for anyone wanting to work in the U.K., it will be something millions of people will need to sign up for if they want to make a living.  While curbing illegal migration is the focus for now, the government has also said that “in time” digital ID will “make it simpler to apply for services like driving licenses, childcare and welfare, while streamlining access to tax records.”  The government also said the ID “will be available to use” for proving identity when voting in elections, and that it could also be used by private sector organizations, e.g. when setting up a bank account. The government has said the consultation would consider how digital ID would work for people who don’t have a smartphone.  WHAT WE DON’T KNOW In short, quite a lot.   The credentials will be government-issued and stored directly on people’s phones, but it’s unclear whether the system itself is to be developed in-house — as with the Government Digital Service’s OneLogin — or outsourced to the private sector.   We also don’t have much detail on the government’s plans to eventually make the digital ID a way of accessing welfare services, or which welfare services might be included. There’s no timeline on that part of the plan.  The Tony Blair Institute, another influential think tank, has pushed for a more holistic application of digital IDs. In a statement following Starmer’s speech, TBI Director of Government Innovation Policy Alexander Iosad said digital ID can “do so much more for our citizens” than just combat illegal migration.  “Imagine being pre-approved and notified about the services, benefits or tax breaks you’re entitled to, no more lengthy forms, no waiting, no more backdating. Issues in your community reported at a tap and tracking progress on those reports with complete transparency,” said Iosad. It’s not clear whether the government will pursue a TBI model for digital ID in time.  It’s also unclear whether physical documents would remain valid proof of identity. Migrant rights campaigners have long protested the Home Office’s transition to digital-only immigration status on grounds of inclusivity and reliability.