Germany has a BRICS problem

For that matter, the entire US led Western countries face a new challenge in the form of BRICS which was inaugurated originally as BRIC at the leaders’ summit held in Yekaterinburg, Russia in 2009 representing Brazil, Russia, India & China. The next year saw South Africa in and the rubric got altered as BRICS. Why BRICS is a challenge?

There are eleven full members and ten partner members, who would be absorbed into full membership in due course. More than 30 countries have officially applied or expressed interest in joining BRICS in the offing. These potential members are spread across Asia, Africa and Latin America. Turkey is the only country that has foothold in Europe who wished to join.

America, Canada and the entire Western European nations along with Australia and Oceania see BRICS as nuisance at least or as geoeconomics threat at most. Germany is not left out of this conundrum. Here are the salient threats Germany foresee:

Threat Perception

1. Rules based international order promulgated by America and America alone to which Germany subscribed without any qualm faces the frontal attack. This global order thrives on Dollar hegemony in the form of holding reserve currency and trade currency and to be added there to as remittance currency used in credit card transactions

2. Hitherto the US financial structure was nourished by the petro dollar mechanism where oil trading would be denominated in USD and America can leisurely print any amount of US Dollar currencies without having gold-backed security

3. Foreign policy of US led West was anchored upon global military power vested in the West and any country opposes the US dictum would be penalised

4. The instruments of punishing a misbehaving nation include sanctions, freezing of collateral reserves held in American and in European financial institutions. Moreover, expelling those found guilty from the SWIFT is also resorted to

5. Secondary sanction regime was also added where a country who is in the cross hairs of either USA or Western nations could not deal in open market with another entity as the latter would also be subjected to the same sanctions regime imposed on the primary culprit.

BRICS Challenge

1. Brics Pay replacing Visa and MasterCard and the German variant Giocard is indeed a master stroke by BRICS members

2. An innovative mBridge a multilateral central bank digital currency (CBDC) platform developed by China to enable real-time, direct, and low-cost cross-border payments between commercial banks and central banks is a direct challenge to SWIFT

3. CIPS by China denoting Cross Border International Payment System incorporating 210 direct participants and 1619 indirect participants is gaining ground

4. Local currency cross border settlement where parties in a transaction have the option to either use Yuan or any other currency or both in combination as approved by the respective monetary authorities lends not only to convenience but go through without oversight by America. The most famous case is Rupee- Ruble transaction between India and Russia.

Strategy Advice

1. Granted though it is, Germany not being severely affected at this juncture as regards to the level and quantum of holding foreign country currency reserves the future may not be that rosy. At present, more than 80% of currency reserves in Germany is denominated in USD. In May 2026 out of 38.5 Billion of non-euro Currency float, 26.5 Billion is held in USD

2. German Chancellor Friedrich Merz made a bold move recently instructing German Bundesbank to add Chinese Yuan to currency reserves. He was right Yuan continues to be an under-valued currency by way of deliberate move by the Chinese authorities or as conspirational agenda by the Federal Reserve.

Be that as it may, navigating strategy amid geoeconomics endorses what Chancellor Merz did to meet up with BRICS challenge!

  

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 

 

 

Germany must recycle Euro, Why?

Dollar recycling is coming to end now. The global financial system needs yet another currency for this purpose. Yuan is a choice, true. But the better candidate is Euro. Germany must, therefore, get into the act. My rationale is given under:

Although Euro is managed by the European Central Bank (ECB) headquartered in Frankfurt as an apex of national central banks of the Eurozone countries, for all practical purposes it is Germany that makes the decision and others meekly follow. My FASA (facts, analysis, synthesis and strategy advice) follows:

Facts

1. As of mid-2026, Euro currency in circulation totals around 30.5 Billion banknotes valued at approximately €1.6 Trillion, alongside 154 Billion Euro coins worth €35 Billion.

2. Euro area gross debt outstanding is estimated as €13.5 Trillion and International gross debt outstanding is around €17 Trillion. These are mid 2026 figures

3. As regards to Germany, total outstanding government gross debt is about €2.8 Trillion

4. Federal Finance Agency contemplates new issuance €512 Billion in debt securities in the later part of 2026.

Analysis

1. Debt to GDP Ratio of Germany hovers around 64% which is less than half of the US Ratio of 131%

2. In 2025, trade surplus of Germany was estimated as €203 Billion whereas investment outflow is around €269 Billion, evidencing net savings generated within the domestic scene

3. Germany attracts other country savings as well. The net credit held by the German Central bank (Deutsche Bundesbank) stands at approximately €1.08 Trillion.

Synthesis

1. It is evident that Germany is in an unshakable position as the safe haven for other country’s savings and surplus remitted to German financial giants

2. Besides as for trade related surplus there is huge credit card surplus as well providing more liquidity within Germany than for any other country in the Euro zone

3. Geoeconomics power analysis mandates that strong economic foundation is sine-quo-non for projecting both political and military prowess across the globe.

Strategy Advice

1. Firstly, Germany should concentrate upon re-cycling Euro currency of the Euro-zone

2. Secondly, she must go for the jugular vein of American hegemony in replacing US Dollar as the main trading currency in the western hemisphere

3. Sign a Faustian Deal with China so that the latter opts for making Yuan as the global trading and investment currency while recycling Euro is granted to Germany as the birth right.

Navigating strategy amid geoeconomics, compel Germany to begin recycling Euro forthwith!

 

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

  

Bewildering internal structure of German chocolate industry

Germany is voted as the largest exporter of ready to eat chocolates globally. With a grossing of USD 9.7 billion and a quantum bracing a million tonnes it is truly remarkable for her to steal the thunder from erstwhile competitor Swiss Chocolate. Yet, there is bewildering internal structure.

This blog accompanies you unravelling this bewildering structure of German chocolate saga under FASA denoting facts, analysis, synthesis and advice.

Facts

1. Once favourite, Switzerland as chocolate giant has faded away and new entrants gleamed in. Top of the billing goes to Germany, Belgium, Poland and in that order. Others include Italy, Netherlands and France. This is as regards to ready to eat chocolates. But the devil is in the details.

2. The fifth placed Netherlands, however has delivered a hat trick. She exports much more than what Germany does. German total value of chocolate exports is round € 11.4 billion whereas Netherlands grosses € 12.4 Billion. How comes? It is not as simple as it appears. Whereas Germany concentrates on finished chocolates, Netherlands supply the world’s largest quantity of chocolate butter & cocoa powder. In fact, these stuff amount to 2/3^rd of the Dutch exports

3. Top rung companies Alfred Ritter has  annual turnover of USD 833 Million,  and August Storck KG, ranges between 2 to 2.5 USD Billion, where major part of their manufacture is consumed within Germany.

Analysis

1. Alfred Ritter GmbH & Co. KG sells the most popular brand within Germany called “Ritter Sport” whereas the widely popular “Milka” both in Germany and across Europe is manufactured by the German subsidiary of Mondelez International of USA reaching more than 1.1 million tonnes, valued at over USD 6.2 Billion

2. Germany imports raw cocoa from African countries like Cote d’lvoire & Ghana amid wide spread protests in these countries as cultivation of cocoa leads to deforestation therein

3. German share of world’s chocolate exports hovers around 11% while imports of cocoa and semi-finished goods such as cocoa butter & powder accounts for about 9.7%. Please note, major part of imports is sourced from Netherlands.

Synthesis

1. Domestic consumption is increasing steadily resulting in quantum of finished chocolate available for export is seen dipping over time

2. The exploitation by multinational company Mondelez International of USA using Milka as captivating brand both domestically and abroad is detrimental to the German Chocolate industry as a whole

3. Unlike in the case of Netherland whose industry structure favours manufacture and export of semi-finished products in the form of cocoa butter & powder, German manufacturers are too pre-occupied with ready to eat chocolate stunting growth in export volume.

Advice

1. The concept of chocolate as optional & indulgent treat need be re-assessed

2. Structural changes are brought in the chocolate industry to enhance growth of both ready to eat chocolates and semi-finished products levelling at 50:50.

Navigating strategy amid geoeconomics mandates German administrators look at their chocolate industry with fresh mind!

 

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser