The 5,000 Pound Guerrilla In The Room

I noticed today....several news stories talking of  a money-pit now existing with the Germany Federal Employment Agency (BA).

So....the basic story.....BA now faces a worse-than-expected cash shortfall for 2026....we are talking with a deficit projected at over 5 billion Euro....perhaps on up to 8 billion.

Cause?  Well.....higher unemployment and a weaken economy.

So....there's got to be a new  tax revenue 'path' created.

Finance Minister Lars Klingbeil.....I suspect....has probably a group working on this, and after summer vacation....will deliver a  fairly big new tax project.

The bad news.....this is purely to cover 2026.....then you get into 2027, and 2028....unless some miracle occurs....will require increased tax revenue as well.

What kind of harsh taxation is coming?  Anyone's guess.  

The problem here....is that Merz and his 'team' (the CDU-CSU).....were  voted  in to correct the economy....get things stabilized, and avoid unnecessarily inflating taxation.  

So if a new Chancellor is the 'solution'....with more taxes coming....don't go expecting the economy to improve.  Early election.....my bet. 

How To Simplify The Chancellor Exit-Issue

 Soccer scenario.

X-city has a losing record for their  team....so they scouted for a new coach.  They (the executive committee) hired Coach Merz. They hired this guy because he had a strategy for  'winning', bringing the economy back, and ensuring jobs.

But at this shift in manpower....the team hired assistant coaches (SPD) who were not tuned into Coach Merz's strategy.  The assistant coaches gave priority to cities in debt, reform, higher benefits, and more taxes.

About 18 months into Coach Merz's contract....it's obvious that the team is 50-50.....not really winning....not really losing.

Disgruntled....they are discussing now the dismissal of Coach Merz....to bring either Coach Hendrik Wüst....who seems to be more of a intellectual coach....not really a economics coach.  The other choice is Coach Markus Söder....who might be slightly into economics more than than the other guy.

Whoever they hire as coach....he's left with the assistant coaches who aren't reading his strategy or notes......likely to mean 12-to-18 months of 50-50 play, and the city feeling disgruntled.

Added note:  Well....rumors started up....that the CSU (a sister party of the CDU and ONLY in Bavaria)....is open to the idea of teaming up with the Freie Wahler (Free  Voters Party).....to campaign across the 15 other states.  The two slightly more conservatives than the CDU?  Yeah.

Anyone's guess that the two might take votes away from the CDU and alienate the CDU-CSU relationship greatly.  

My thoughts?  Having the CSU-FW Party nationwide?  They'd probably take 50-percent of CDU votes.....meaning a national poll situation (CSU-FW near 10-percent and CDU nationally near 10-to-12) percent).

Dividing the nation even more?  Yeah.

BS strategy?  Maybe....but the question is....has the CDU dug itself a mighty big hole and can't climb out presently?

Poverty Numbers

 Germany's poverty rate rose to a record high for 2025....of 16.1-percent.....meaning that 13.3 million folks are classified as poor.

This  will  be discussed a good bit, but the question is....how can either the CDU-CSU or SPD....resolve  this?

Left out of this?   Well....you  have to wonder from the  13.3-million....how many were working-class poor....meaning they marginally make enough....even with a job.

Giving them more 'free' money?  It'd mean you have to raise taxes, and hope that 'free' money would resolve the poverty-status (it rarely works).

Eight Observations Over Where German Politics Is Headed

 1.  I'd give the Chancellor-swap-out situation occurring by  late fall....near a 75-percent chance of occurring.

There's no scandal brewing....I'd describe simply like a soccer team which ought to be in first-place, but the coach can't seem to get things lined up, and the team is mostly at a 50-50 situation.  So the idea of dumping the coach....pops up daily.

2. Was Merz hired to be the guy to bring economic stability into focus?

Yes.....but nothing much has been delivered.

3. Isn't most of the negativity in economic sense....all leading back to the anti-nuke-energy, anti-coal-energy, hefty cost of power, cut-off from Russian natural gas, etc?

This is a twenty-plus year 'path'....designed into weird way to diminish jobs and lessen the economic strength of Germany.

4.  Even if they replace the Chancellor at this point....is there any real plus-up for the new guy?

I would offer the opinion....NO. He (whoever is selected by the party)....is linked to the SPD coalition, and not able to evolve into a better situation.  I'd say within 12 months....coalition-collapse is possible, and a fresh new election likely by the fall  of 2027.

5. In terms of state-elections,  and likely AfD 'wins'....aren't CDU-likely voters likely to be disenchanted with coalitions where the CDU teams with the Linke Party?

If I were a CDU-conservative-voter, and you posed the 'fix' to be a CDU-led state gov't where they are partnering with the Linke folks....I'd probably stay home (not vote),  or ask if things are bad enough for me to vote AfD.  Humble guess: one out  of three CDU-voters probably would feel this way.

6.   The 'hot'  topic toward Sep/Oct.....who replaces the President (Frank-Walter Steinmeier, SPD).  His term ends in early 2027.  I'm betting that the SPD works hard to ensure their  pick 'wins'.

7. The term 'REFORM' probably gets  hyped by the two public TV networks....at least forty times a day now.

8. Is it just odd...the polling for the left-of-center SPD.....at 12-to-13 percent?

You have four parties that fall into the left-of-center mentality.....each with a different brand.

2 June 2026: Germany: 6 Things

 1.  I spent the weekend in Frankfurt (concert). One negative.....you exit the train and walk around the Bahnhof....you know that you are in the midst of a drug 'den'. Stepping out outside and walking a half-block to the tram....I probably observed forty druggies over a 2-minute period.

2.EU say it'll ban single-use plastic packets for ketchup and other condiments.  Your only choice?  Use shared bottles or refillable dispensers.

They really didn't need to micro-manage this BS.

3.  German federal police say....for  2025....27,818 violent crimes in the railway sector were reported.  Leipzig and Dortmund are at top of the statistics.

4. It would appear that Boris Pistorius's (Defense Minister) general decree lifting the regulation requiring men between 18 and 45 years old to obtain an exit permit if they wish to leave Germany for an extended period/vacation....has been deemed legally invalid.

Def-Minister does NOT have this power.  

So....in theory, the Bundestag would have to invent a 'power' and pass the measure, or just pretend there's no need for a waiver.

5.  German woman entering the country from Switzerland...in a van....with 55 suitcases.  Audit-check conducted by the police. They didn't believe her story.

She claimed all were her personal clothing. They x-rayed all 55....yep, they were clothes.    

6.  GMS (poll service) did a poll....shows that FDP has gained 2 points....up to five-percent of Germans would vote for them.

Mostly took voters from CDU and SPD.

Q-and-A: Three Things

 1.  Is the general public kinda demanding a switch-out on Chancellors in Germany?

I'd say for 6 months....majority (probably up to 60-to-70 percent) feel that Merz can't get the job done....meaning fixing the economy and saving jobs.

The leading CDU replacement (within the party)?  Well....if he is selected and this replacement occurs....I'd give this guy 6 months before he's led to the door and finished off.

There's simply not any bright 'star'.

2.  State elections in Germany stating to matter?

I'd say over the next 18 months...it's a big deal.  

3.  All this crap from the 'end' of the Scholz SPD-led coalition....lighting the fire to this dismal trend?

You can make this connection.....but there's a trend going on for the economy...over 30 years of decisions....where bad decisions were made, and  led to consequences.

31 May 2026: Germany: 3 Things

 1.   New party 'boss' for FDP, Wolfgang Kubicki.  Party has a 5-year trend (downward) on votes....currently at 3-percent on polling.  Belief is that Kubicki can get more attention....getting them up around 6-to-7 percent (enough to get seats).  Party is pro-business....less on taxes.  If they get more votes....likely taking mostly from CDU or SPD.

Curious thing about Kubicki....he often get invitations to ARD/ZDF public forum shows  (I'd guess at least 6 times a year).

2.  N-TV piece.....Germany short on 2,000 prosecutors.

3.  Some hint from the Pentagon....when they suggest 'closures' or drawdowns....it'll occur pretty fast.

Explaining German Heat, AC Anxiety, And Reality

 Upon arrival in early 1978 to West Germany...being from Alabama...the 1978 summer for me was 'mild'.  Yeah...it did get up into the 34 C (93 F) range....but it wasn't that bad.

Anyone having AC? No.  Literally nowhere did  you find AC hooked-up/running.  Did Germans dress ultra casual?  Oh yeah.

Around 1984/1985 when I returned....same attitude, but less clothing and fans set up everywhere.

Around 1990s when I returned again?  Well....now folks were kinda engaged to not suffer....AC units (single room units) were selling.   Around 2001, I noted various Air Force folks were buying 400 Euro units.  Their German neighbors got 'weak' and they bought into the idea.

Around 2015....my German wife finally 'allowed' me to buy a 400 Euro unit...with stipulations.  First, it had to be 33 C or more (91.4 F).  The windows to the house....had to be closed at 11, and the AC unit went on at noon.....for a max of eight hours (to save energy).  Finally, by 10 PM....all windows in the house had to be opened....to allow the summer cooling-off effect to occur.

So....here's the weather talk.

Over a 10 year period....there are typically five years of moderate heat (say 20 days of 33 C or MORE....spread out over June, July and August.  You might have 2 days here....4  days there....1 day here....5 days there.  The rest of the summer....mostly 30 C downward to 18 C (86 F down to 65 F).  

The two harsh years of the ten?  This is where you have 30 to 45 days of full-blast heat....going for 10 days straight (minimum).  People talk about this....as the end of the world.  2003 was one of those memory years.

Then you  have the ultra moderate years (three out of ten)....where you have one single day of 32 C/higher in a month, and the rest are mostly 18 C to 25 C. 2024 was one of those ultra moderate years.

Fronts come in, move, and leave.  Occasionally....like 2003, the fronts 'stall'....where you end up with two to three weeks of miserable heat.  It's not some demon like 'climate-change'.....it's a lingering front that simply stalls.

In my village (well-to-do crowd)....I'd take a guess that 75-percent of folks have a single-unit AC device.  Older folks?  No.  

German hotels now with AC units?  Big-name places have AC.....which you pay  upwards to 150 Euro a night for the 'extras'.  

Offices having AC?  My wife's company has a building with AC built in.  But I'd take a guess that two-thirds of businesses have only fans...no AC. The Auslander-Buro (office for migrants/Green Card).....they are without AC units.

My 'demon'?  When it's a harsh summer and the 7th consecutive day of 35 C....trying to watch the nightly news and they desperately want you to fight the climate-change demon....I have to leave the room.

The best story?  My wife has a gym-partner who owns a 1890s house, and deep about 6 feet below the surface....there's a room that her husband has 'set-up'....where the room never gets above 23 C (naturally chilled).  The lady will escape around 10 PM, and comfortably sleep.