SPD can comeback, it only needs a reformer

On and off, reformers appeared in the horizon of Germany. The Fuhrer is one. Ludwig Erhard is next. Gerhard Schroder is third and the most revered. Today SPD is in doldrums. It can make a great comeback. Required: A reformer of the likes of Schroder.

Let me give a bird’s eye view of what Gerhard Schroder achieved.

Domestic Economy

He alone gave peace with prosperity especially aligning with Russia and the rest of progressives of the world. He understood that domestic economics and geoeconomics should be aligned. Domestically, he did the following, ushering in economic upturn where people had money to spend. Here are few snippets:

Tax Reform 2000 brought in several goodies when ceiling of income tax was reduced from 51% to 42%. First time tax payers got a steep concession from 25% to 15%. Basic allowances increased to allow more tax free money in the hands of salaried workers. Corporate income tax reduced from 40% to 25%. As an incentivising measure unemployment insurance contribution was brought down 6.5% to 3%.

Geoeconomics

Geoeconomics push brought out a long term understanding with Russia in supplying cheap gas. He was instrumental in establishing Nord Stream pipeline that became the chief propeller of gas supply to power both domestic and industrial needs.

No wonder that his tenure as Federal Chancellor during 1998 to 2005 is fondly remembered by both corporates and individuals.

SPD Today

A junior partner in the Friedrich Merz led CDU/CSU & SPD coalition which is almost a dead man walking. Remaining in this coalition is very much detrimental to the prospects for SPD in the next Federal Election. If such an election held today, SPD would garner around 16% of votes cast and no more. In fact, in the last Federal Election held in 2025 the party got 16.4% of votes.

SPD Tomorrow

Mecklenburg State election saw SPD poised at 35.8% and came second while Berlin State gave only 12.1% being fourth in the pecking order. The Party’s Youth Wing (JUSOS) is up in arms seeking to settle its score with Lars Klingbell who remains as most unpopular co-head despite the fact he is the Vice Chancellor of Germany and also Federal Minister of Finance.  Bärbel Bas assumed co-head position in 2025 and yet to prove her mettle even in her cabinet position as Federal Minister of Labour and Social Affairs. The only sparkling star in the top ranks of SPD is Boris Pistorius who also serve in the cabinet as defence Minister.

Strategy advice

Regional momentum registered convincingly in the Mecklenburg state election must be capitalized in order to sweep oncoming elections in other states before contesting at Federal level.

A Reform Agenda must be crafted that blends both domestic economic recovery and reinstalling geoeconomics status. Can Boris Pistorius rise to the occasion?

Navigating strategy amid geoeconomics concur with Boris Pistorius if he gets counsel from Gerhard Schroder and be the reformer German needs today.

 

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 

Is green transition boon or bane for German fertilizer?

The jury is out on the dilemma known as Green Transition, whose German title “Energiewende” meaning-energy turnaround- is still the subject of intense debate in the geoeconomics circle. As a policy measure it is intended to do good. But things are getting awry.

Brief explanation of Energiewende is not out of place. The core idea is based on shifting from fossil fuel (nuclear power also included) to green energy or renewable energy system. The goals are as follows:

1. Net Zero Emission by year2045

2. Electricity consumption from green/renewable source be at-least 80% by 2030

3. Coal as energy source be phased out by 2038

Facts & analysis

All these loftier goals are good for only obtaining electricity for both domestic consumption along with lighting and powering factory infra-structure. When it comes to the question of producing fertilizer, it is not a boon but a bane.

For example, production of nitrogen fertilizer relies heavily on the Haber-Bosch process, where large amount of natural gas is required as feedstock and energy source. Hence, the dependence on natural gas, for instance, cannot be over simplified. At present, only 75% of the required fertilizer for German farming is provided via domestic industrial giants. Chief amongst these are:

1. K+S Aktiengesellschaft: Being Germany’s largest producer of ammonia and urea-based nitrogen fertilizers located in Kassel, it is considered as global hegemon in potash, magnesium, and sulphur products

2. SKW Stickstoffwerke Piesteritz GmbH: Being the largest producer of ammonia and urea-based nitrogen fertilizers in Germany located in Wittenberg. It has a separate arm for producing de-fossilized "green" fertilizers

3. Compo Expert GmbH: Located in Münster, this international company specializes in high-quality specialty fertilizers and bio-stimulants for horticulture, turf covering and other agriculture.

All three above and many others who are engaged in domestic fertilizer production realize that the future for fossil-fuel based fertilizer within Germany is bleak, due mainly to Energiewende policy mandated by the Federal Government agencies tasked to bring out the “Green Transition” quickly.

Threats perceived

Heavy penalties would be imposed by these Federal agencies on the recalcitrant factories who fail to transition to using renewable energy source as well as green ammonia made on the basis of green hydrogen, which is produced with electrolysis using renewable electricity. In any case, generating  renewable electricity is more expensive in Germany.

Options available

There are only two options available for the affected factories. Either liquidate the company or relocate elsewhere in Europe, say Spain.

Geoeconomics Risk

1. Right now sourcing fossil fuel and natural gas is wrought with high geoeconomics risk. Closure of Hormuz Strait and blocking of Red Sea Navigation adds more cost in terms of transport and marine insurance not to forget about the high prices quoted for the fuel itself

2. Existing supply chain issues involving imports of fertilizers such as potash, phosphate, and sulphur from Mid-East would be further exacerbated when German fertilizer firms relocate their production facilities elsewhere in Europe.

Strategy Advice

The Federal Government must re-examine the structure and deadlines regarding Energiewende goals while the companies in fertilizer industry have to shelve their plans for energy transmission and relocate outside of Germany.

Navigating strategy amid geoeconomics recommend both governments and fertilizer companies to re-assess Energiewende ASAP. 

 

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 

Germany, confusion confounded in Red Sea blockade

Recent statement by German Chancellor, Friedrich Merz that Houthi military advances in Yemen and attack on energy plants in Saudi Arabia have worsened energy crisis is true; but calling for international community to size up with Houthis is only inciting more chaos. In sum, it is confusion confounded.

Let me take you in a quick journey therough how the crisis unfolded and the German stake, where German action has failed so far and what remedial measures she must advocate now.

The Crisis

Saudi Arabia-Houthi conflict started in 1934 leading to victory for the Saudis resulting in the loss of Asir, Jizan, and Najran belonging to Yemen. Since then there has been enmity brewing between the two parties. What Yemen doing is to recover the lost areas and to assert control over Red Sea which was in Yemen’s’ backyard. In a recent blitzkrieg, Yemenis are seen advancing in their goal of uniting their country which the international community including Germany must support!

German stake in Mid-East imports

German imports of crude oil from Mid-East hovers around 6% of the total. Germany is sourcing crude from Norway at 16.6%, USA 16.4% Libya13.8%. Kazakhstan supply which was around 13% earlier has wound down as Russia ordered suspension over pumping Kazakh oil via Druzhba pipeline. This is offset by Libyan supply that can be upped to 18% quickly to ease any shortage.

Hormuz blockade has affects much more than what Bab al Mandeb blockade does. Houthis are now controlling strategic positions around Bab al-Mandab. More than that, their attacking energy facilities in Saudi Arabia exasperated the situation. Naturally, the resultant worsening of the situation in the energy market has spill over effects on Germany as well.

Where Germany has failed

Friedrich Merz states that “The international community cannot allow the Houthis to take shipping in the Red Sea hostage.”  This is just a declaration of war. Already US tried it and failed miserably. If Iran can do this in Hormuz why Yemen should be reprimanded. Ironically, Germany is also in cahoots with Nordic countries harassing Russian oil tankers in the Baltic Sea.

Remedial measures Germany should advocate

1. Call for an international conference to discuss both blockades Hormuz and Red Sea because these are very much interconnected in terms of geoeconomics

2. The globe must accept Hormuz Strait belonging to Iran and Oman and suggest required modus operandi for Iran to manage the Strait with participation by Oman

3. Germany should parley with Saudi Arabia in reconciling with Yemen in solving their territorial issues

4. Freedom of Navigation as an international concept must be re-evaluated taking into consideration of the rights and privileges of littoral states so that they have a stake in geoeconomics power and related responsibility

5. The United Nations Convention on the Law of the Sea (UNCLOS) need to be amended suitably taking into account the rights and privileges of all sea-faring nations.

Strategy Advice

Germany must join hands with brother Aryan nation Iran, to set example of good governance that brines prosperity to all and promoting peace and harmony along with surge in geoeconomics well-being.

Navigating strategy amid geoeconomics hold Germany and its people responsible for solving both Hormuz and Red Sea crises!

 

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser