German spending plans could lift growth and inflation, says ECB
European Central Bank President Christine Lagarde said Thursday that higher spending in defence and infrastructure could pump up growth and inflation, after Germany signalled plans to boost spending in both areas.
"An increase in defence and infrastructure spending could also add to growth," Lagarde said, adding that it "could also raise inflation through its effect on aggregate demand."
But Lagarde noted that the proposal by Germany's likely next chancellor Friedrich Merz was a "work in progress", with the extent of its impact unclear.
Next Thursday, MPs will meet in the Bundestag to debate Merz's plans to take on billions in new borrowing for infrastructure and defence .
As part of a finance deal agreed with the centre-left Social Democrats (SPD), the CDU/CSU want to introduce a carve-out to Germany's strict debt rules to allow unlimited borrowing for defence, as well as investing €500 billion in infrastruture projects over the next decade.Â
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But they will have to rely on the support of the Greens - who have so far been reticent about the deal - to reach the necessary two-thirds majority in parliament.Â
A vote on the proposals is scheduled for March 18th, before newly elected MPs take their seats the following week.Â
Thyssenkrupp's automotive unit to cut 1,800 jobs
Germany industrial giant Thyssenkrupp has announced plans to cut 1,800 posts at its automotive unit, becoming the latest parts maker to put jobs to the sword.
"The outlook for the global automotive industry remains weak," the head of Thyssenkrupp Automotive Technology Volkmar Dinstuhl said in a statement.
"We cannot escape these pressures," Dinstuhl said.
The job losses would be accompanied by cuts in investment intended to save €150 million, Thyssenkrupp said.
European auto suppliers have struggled in recent years as the continent's car companies have lost ground to Chinese rivals and struggled with the transition to electric vehicles.
Rising trade tensions were also making business more difficult, according to Dinstuhl.
"Discussions about new tariffs are creating uncertainty," Dinstuhl said, without directly mentioning US President Donald Trump's threats to raise import taxes on key trading partners.
Shares in Thyssenkrupp, whose activities cover everything from submarines to steel, traded up 4.65 percent on the Frankfurt Stock Exchange after the announcement.
The group said in November it would cut 11,000 jobs in its steel division, the largest in Germany, which has been battered by high production costs and fierce competition from Asian rivals.
Four jailed over Germany plot to kidnap minister
A German court on Thursday jailed four members of an extremist group linked to the "Citizens of the Reich" movement for plotting a coup and to kidnap the health minister.
The three men and one woman, members of the self-styled "United Patriots" group, were sentenced to between five years and nine months and eight years' jail by the Koblenz higher regional court.
It was one of several trials targeting the wider far-right movement whose members adhere to conspiratorial narratives and reject the legitimacy of the modern German state.
Together they had hatched a plan to kidnap Health Minister Karl Lauterbach, a figure of scorn for many opponents of Covid-era restrictions, and to kill his bodyguards if they deemed it necessary.
After the verdict, Lauterbach of the centre-left Social Democrats thanked "the police and the judiciary for solving and punishing the planned crime".
The court heard that the four had joined forces by January 2022 with a plan to trigger civil war-like conditions in Germany through violence with the aim of taking over state power.
READ MORE: Four jailed over plot to stage coup and kidnap German minister
Kita staff in Germany facing 'untenable conditions'Â
Many childcare workers in Germany are struggling with poor working conditions and overwhelming workloads, according to a non-representative analysis presented by the Rosa-Luxemburg-Stiftung in Berlin.
The report, titled "Crisis in Daycare – Exposing Systemic Failure", reveals that a majority of surveyed daycare staff reported going to work while sick and completing tasks "rushed and under time pressure."
In one anonymised account, a nursery school worker wrote: "The pressure is mounting, and without support, it’s only a matter of time before the system collapses completely."
The study’s authors, including Verdi union members and Rosa-Luxemburg-Stiftung staff, describe "untenable conditions" in their 40-page analysis. They conclude that acute staff shortages lead to "reduced childcare hours, the closure of entire daycare groups, institutional child endangerment, and long-term illnesses."
To highlight the issues in the sector and push for better pay and conditions, Verdi has called on workers in nursery schools to stage a nationwide walkout on Friday, alongside strikes in hospitals and care homes. This is timed to coincide with Equal Pay Day on March 7th and Women's Day on March 8th.Â
READ ALSO: How Germany plans to solve its Kita crisis
Jan Korte, deputy chairman of the Rosa-Luxemburg-Stiftung, highlighted the fact that 380,000 childcare spots are currently missing at nursery schools across Germany and called current funding for daycares "laughable".
"Without a complete policy overhaul, the crisis will persist," he added.Â
Germany vows to help compensate Ukraine for US suspension of aid
Defence Minister Boris Pistorius has promised to try and offset some of the damage to Ukraine from the US suspension of aid and intelligence sharing as the country fights off Russia's invasion.
"We are of course trying to compensate for the loss of US support to a great extent with new measures," Pistorius told a Berlin press conference alongside his Ukrainian counterpart Rustem Umerov.
The American decision to freeze help to Ukraine came after a White House meeting last week in which US President Donald Trump berated his Ukrainian counterpart Volodymyr Zelensky for insufficient gratitude and told him that Ukraine had to "make a deal (with Russia) or we're out".
Ukraine's European allies have been left scrambling to adjust, and on Thursday Pistorius stressed that "we are firmly on the side of Ukraine and that applies now more than ever".
READ ALSO: Europe backs Ukraine after Trump-Zelensky clash shocks world leaders
Germany has been Ukraine's second biggest source of aid after the United States and has taken in more than a million Ukrainian refugees.
While Trump and his administration have stressed that their priority is to bring the conflict to a quick end by talking to Russia, Pistorius said "there is no sign on the ground in Ukraine or in the skies" of any willingness by President Vladimir Putin to move towards peace, despite what he may be telling Trump.
Man jailed for machete attack on police station
A man who attacked a police station with a machete last year was sentenced to eight years in prison Thursday for attempted murder and criminal damage.
The man, then aged 29, shouted "Allahu Akbar" (God is Greatest) and said he wanted to kill a police officer in the September 6th attack in the western town of Linz.
He had entered the police station armed with a machete and hit the glass screen separating him from the on-duty officer around 50 times.
An officer then locked the front door so that the man was trapped in the entrance area until backup arrived and he could be detained.
Prosecutors say that he sympathised with the ideology of the Islamic State group.
Local media reported at the time of the attack that the man was an Albanian national.
He caused an estimated €70,000 worth of damage.
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