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German government revises growth forecasts: Recession expected to continue into 2024

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Germany is facing a two-year recession for the first time since the early 2000s, prompting the government to slash its 2024 growth forecast for the Eurozone’s largest economy.

If Economy Minister Robert Habeck’s forecast for this year is correct, Germany will experience a two-year recession for the first time in more than 20 years, after output shrank by 0.3 percent in 2023. In 2002, the economy contracted by 0.2 percent, followed by a 0.5 percent decline in 2003.

“The economic conditions are currently unsatisfactory,” Habeck said on Wednesday. “But we are in the process of finding a way out of this situation,” he added.

The minister argued that Germany has made “real progress” in recent years in addressing the “short-term” factors—rising inflation, high interest rates, and surging energy costs due to the war in Ukraine and subsequent anti-Russian sanctions—that have depressed output.

However, Habeck pointed out that longer-term structural issues, such as “Germany’s serious skills shortage,” years of underinvestment in infrastructure, and excessive bureaucracy, continue to hold back growth.

Habeck, who also serves as vice-chancellor, predicted that GDP would shrink by 0.2 percent this year, a sharp downgrade from an earlier forecast of 0.3 percent growth.

With energy prices falling, ministers and economists had initially hoped the economy would see a temporary recovery this year. But a steady stream of pessimistic data in recent months has clouded the outlook. “The recovery has been postponed once again,” Habeck said.

Citing high labor and energy costs, a heavy tax burden, and political uncertainty, some companies are considering moving production to cheaper countries, raising fears of deindustrialization in Europe’s largest economy.

Despite these concerns, Habeck expressed cautious optimism that the economy would begin to recover next year, as lower inflation and easing interest rates, combined with rising real wages, are expected to boost consumer spending.

The minister suggested that “in the last three to four quarters, people have started to feel wealthier again.”

Habeck’s ministry expects the economy to grow by 1.1 percent in 2024 and 1.6 percent in 2026, driven by stronger private consumption, increased investment, and rising international demand for industrial goods.

However, Habeck emphasized that Germany’s economic challenges run much deeper, noting that the two pillars of the country’s success—cheap Russian gas and well-functioning global markets, both critical for a leading exporter like Germany—no longer exist.

According to Habeck, the first pillar has been undermined by the war in Ukraine, while the second has been destabilized by China’s “aggressive export strategy” and rising U.S. protectionism.

“Half of Germany’s growth has always come from exports, and this pillar is now under threat. We have essentially not grown at all since 2018,” Habeck said.

Despite his cautious optimism about short-term improvements, the Green minister suggested that Germany’s long-term growth potential remains low.

“Even if we did everything right—reduced bureaucracy, had the necessary skilled workers, and secured the needed capital—we would only be looking at a growth potential of about 0.6 percent,” Habeck said.

He attributed this to “the failures of past decades, not just the past few years,” pointing out that successive governments had not invested enough in infrastructure, digitalization, and the mobilization of skilled labor.

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Impact of Le Pen’s ban could spread across Europe

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France’s prominent right-wing politician Marine Le Pen was sentenced on Monday to a five-year ban from holding elected office. This penalty, if upheld after appeals, will prevent her from running for president in 2027.

A Paris court sentenced Le Pen to four years in prison—two suspended and two to be served under electronic monitoring—for embezzling European Parliament (EP) funds, and banned her from holding public office for five years.

The French leader is accused of embezzling €4.4 million in EP funds intended for staff working for her party, National Rally (RN), in Brussels.

In a statement on Tuesday, Le Pen declared, “The system dropped the nuclear bomb, and if they did this, it’s clearly because we are on the verge of winning power. We will not give up. We will not let the French people have the presidential election stolen from them.”

Le Pen’s accusation that the judiciary is politicized has fueled speculation that she might organize a counter-movement similar to that of former US President Donald Trump. However, RN officials state they will not follow Trump’s path, arguing that such an aggressive approach could alienate the undecided voters needed to win the two-round presidential election.

Referring to the protests on January 6, 2021, when Trump supporters contested Joe Biden’s election victory, Philippe Olivier, a senior RN figure and Le Pen’s brother-in-law, stated, “We will not do a Capitol [riot]. We will follow Martin Luther King. Jean-Marie Le Pen would have reacted like Trump, but Marine Le Pen is neither her father nor Trump. We will do it differently.”

Jordan Bardella, the 29-year-old RN President designated as Le Pen’s successor, condemned the “tyranny of judges” and claimed that “French democracy is being executed.”

However, adopting a softer tone in an interview with CNews on Tuesday morning, Bardella said, “I believe democracy is the violence of words, never physical violence. I believe the French people must be angry today, and I tell them: Rise up! Be angry!”

The RN has called for “peaceful mass mobilization” and decided to organize a rally in Paris on Sunday to support Le Pen.

Officials also mentioned plans to engage with voters and distribute leaflets across the country this weekend.

Furthermore, the RN launched a petition titled “Save democracy, support Marine!” to rally its supporters.

Rémy Heitz, the chief prosecutor at France’s highest court of appeal, described such threats as serious and defended the court.

“The decision is not political; it is a legal decision made by three independent and impartial judges. Threats against judges are absolutely unacceptable in a democracy,” Heitz stated.

Prime Minister François Bayrou, speaking in the National Assembly on Tuesday, refuted claims that the judiciary was undermining French democracy.

However, the prime minister added that “as a citizen,” he questioned the appropriateness of an immediate ban from elections before all appeal routes were exhausted.

“The law under which the judges made their decision was passed by parliament . . . It is parliament that will decide whether this law should be changed,” Bayrou said.

Bayrou and his Democratic Movement party are facing a second trial in a fake contract case similar to Le Pen’s, following the prosecutors’ appeal of the initial verdict.

Legal troubles, including bans, are not new for politicians in France, and those affected often complain about the judges. Former president Nicolas Sarkozy accused the court of overreach and harassment in his ongoing case concerning alleged illegal campaign contributions from Libya.

Right-wing former prime minister François Fillon lost his frontrunner status ahead of the May 2017 presidential election after police launched a formal investigation in March of that year into allegations he employed his wife in a fake job as a parliamentary assistant.

In 2011, former president Jacques Chirac was found guilty of embezzling public funds and received a two-year suspended prison sentence.

Support for Le Pen from Israel, Trump, Orbán, Salvini, and Wilders

Several right-wing leaders, including Trump, have stood by Le Pen, attacking the “radical left” for allegedly trying to eliminate opponents through the judiciary.

Trump commented on Le Pen’s ban on Monday, stating, “This is a very big deal,” and drew parallels with the series of lawsuits filed against him, many of which were dropped after his re-election.

“Sounds like this country [the US]. Sounds very much like this country,” Trump remarked.

Hungarian Prime Minister Viktor Orbán initiated the “#JeSuisMarine” [“#IAmMarine”] tag on X, while Italian Deputy Prime Minister and Lega leader Matteo Salvini called the decision a “declaration of war by Brussels,” suggesting that “those who fear the voters’ decision often seek reassurance from the courts’ decision.”

Geert Wilders, leader of the Dutch right-wing PVV, also supported Le Pen, stating, “I believe in her,” and expressing confidence that she would win her appeal, overturn the ban, and “become the President of France.”

Harald Vilimsky, an Austrian FPÖ MEP within the PfE group, spoke of a “scandalous decision,” while Tom Van Grieken, leader of Belgium’s Vlaams Belang, described the court ruling as an “attack on democracy.”

Santiago Abascal, leader of the Spanish party Vox, declared that the French people ‘cannot be silenced.’

Israeli Minister of Diaspora Affairs Amichai Chikli stated on X that the “pathetic and transparent attempt by declining elites to suppress the will of the people using the judicial system as a weapon” would fail.

Will protest votes rise in Europe?

Meanwhile, according to poll results released Monday by the Odoxa polling institute, Le Pen is France’s most popular politician with a 37% approval rating, slightly ahead of former Prime Minister Édouard Philippe (36%) and RN party leader Jordan Bardella (35%).

Regardless of the legal interpretation of the ruling, it appears to have deepened divisions within the French population and threatens to attract new sympathizers to the right.

For instance, the European Council on Foreign Relations (ECFR) believes this will help further mobilize the RN base ahead of the next elections.

In a recent statement, the ECFR warned that the ruling against Le Pen would have broader and significant consequences across Europe.

Mentioning the potential for a surge in “anti-establishment” movements in Europe, the ECFR pointed out that the view propagated by the Trump administration—that liberal elites have “captured political systems in the West”—would gain further legitimacy.

The ECFR suggested we will see the far-right more strongly asserting in the future that “the system” is working to silence them, noting this is already happening beyond Europe, citing Brazil’s far-right former president Jair Bolsonaro, who claimed “the left and the system” work to “take opponents out of the game.”

Bardella as Le Pen’s strongest successor candidate

According to a survey of approximately 1,000 people conducted on Monday by the research and consulting group Elabe, 57% of respondents said the verdict against Le Pen was “normal” given the allegations against her.

The poll indicated that 89% of RN voters considered it unfair, while majorities among supporters of other parties deemed it fair.

Over 80% of voters for the New Popular Front (NFP) and Macron’s Ensemble party stated they did not believe the ruling against Le Pen was “political.”

A majority of 68% also felt it was fair for the ban to apply immediately, before appeals are concluded.

Nearly 90% of RN voters argued that Jordan Bardella is the best candidate to succeed Le Pen.

A few months ago, while the case against Le Pen was peaking, Bardella faced accusations of “betrayal” from some RN supporters for touring cities to promote his own book.

Bardella is emerging as a potential leader who could gain acceptance across Europe, seen as young and more “liberal,” unburdened by the political legacy of the Le Pen family.

Bardella frequented La Cave Saint-Germain bar, whose regulars over the years included Sarah Knafo (now an MEP and member of the far-right Patriots for Europe group), Pierre Gentillet (now a commentator on the far-right CNews channel), and Alexandre Loubet (now an MP). It was there he formed his current inner circle within the RN, which includes MP Pierre-Romain Thionnet.

On paper at least, Bardella exhibits significant policy differences from his mentor, Marine Le Pen. For example, he publicly supports Ukraine in its war against Russia.

While Marine Le Pen represents the “social” wing of the French far-right, Bardella is pushing for the creation of a “Ministry of State Efficiency,” modeled after Elon Musk’s Department of Government Efficiency (DOGE).

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European right gathers at Israeli government event on antisemitism

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The right-wing government of Benjamin Netanyahu in Israel and his Likud party are intensifying efforts to deepen cooperation with the new right in Europe.

Representatives of various parties affiliated with the “far-right” Patriots for Europe (PfE) bloc, which has become the third-largest group in the European Parliament (EP), attended an international conference on “combating antisemitism” in Israel last week.

The conference, organized by Israeli Minister of Diaspora Affairs Amichai Chikli, was promoted as a meeting to discuss the fight against antisemitism. Participants included Jordan Bardella, President of the French National Rally (RN).

Benjamin Netanyahu’s Likud party had previously been granted observer status in the PfE group. Israeli Foreign Minister Gideon Saar instructed Israel’s diplomats in France and other countries to normalize relations with various far-right parties.

Minister Chikli opened the International Conference on Combating Antisemitism, organized by the Israeli government at the International Convention Center in Jerusalem, by apologizing to the far-right European politicians due to the controversy surrounding their participation.

In his opening remarks, Chikli stated, “First and foremost, I want to thank our friends and allies who chose to come to Israel during wartime, especially our friends in the European Parliament. I apologize for the lies spread against you by those who defame the State of Israel worldwide. Thank you for being here with us in Jerusalem, the eternal capital of Israel.”

Speaking at the conference, Netanyahu praised Trump for his “decisive steps against antisemitism” and blamed the protests on US campuses against Israel’s war in Gaza on a “systemic alliance between the extreme progressive left and radical Islam.”

Netanyahu argued that antisemitism is “a disease carried by barbarians” and is “seen in all civilized societies.”

At the international conference on combating antisemitism held in Jerusalem on March 26-27, Israeli Prime Minister Benjamin Netanyahu (Likud) and Foreign Minister Gideon Saar (New Hope) also delivered speeches.

Other notable speakers included former Slovenian Prime Minister Janez Janša, considered a close supporter of Hungarian Prime Minister Viktor Orbán, and Jordan Bardella, as well as Marion Maréchal from the far-right Identité-Libertés party in France, Charlie Weimers of the Sweden Democrats (Vice-Chair of the European Conservatives and Reformists group in the EP), and three leading MEPs from the Patriots for Europe (PfE) group in the EP: Kinga Gál from Orbán’s Fidesz party; Sebastiaan Stöteler from the PVV, led by Geert Wilders; and Hermann Tertsch from the Spanish Vox party.

The PfE brings together far-right parties that “centrist parties” in the EP still classify as forces needing containment via a “cordon sanitaire” within the EU.

Bardella delivered a speech blaming immigration and Islamism for rising antisemitism in Europe. “Islamism is the totalitarianism of the 21st century. It threatens to destroy everything that is not like itself,” Bardella declared.

David Friedman, who served as the US Ambassador to Israel during Trump’s first term, also attended the conference. When asked by the moderator about Trump’s plan to deport Palestinians from Gaza, Friedman responded, “I loved it! I loved it. And I think it’s doable.”

For European politicians and right-wing parties, an invitation to a conference by the Israeli government is seen as a significant gain in several respects.

Firstly, it allows them to divert attention from their origins, which were previously associated with “antisemitic” circles. Many of these parties stem from neo-Nazi traditions in several instances.

It is noted that the Israeli government legitimizes these parties and individuals, effectively giving them a clean “political bill of health.” Consequently, “far-right” politicians have actively sought invitations to Israel in recent years. For example, Santiago Abascal, leader of Spain’s far-right Vox party, managed to visit Israel at the end of May last year to meet with Chikli and Netanyahu.

Secondly, despite the persistence of “antisemitism” within these circles, the European far-right views Israel as a strategically important ally in their “struggle against Islam.” An integral part of this “struggle against Islam” is the fight against immigrants.

Additionally, as this conference demonstrated, dialogue with Israel offers representatives of the “far-right” opportunities to build broader international connections.

A key figure in this regard is Matt Schlapp. As Chairman of the American Conservative Union (ACU), which organizes the Conservative Political Action Conference (CPAC), and former White House Director of Political Affairs, he was present at the conference organized by Chikli.

On February 20, CPAC adopted a resolution supporting Israeli sovereignty over the West Bank. Schlapp also announced last month that they would establish a “center to combat antisemitism” within CPAC.

For the Israeli right, the conference provides an opportunity to establish and expand relationships with like-minded political forces in Europe.

This implies the event was not solely about “antisemitism.” The parties forming the Israeli government appear to share a common ideological position with the transatlantic “new right.”

For instance, according to the British conservative publication The Telegraph, conference speeches referred to “climate activist” Greta Thunberg as “stupid,” while Black Lives Matter was described as “no better.”

The Telegraph also reported that Trump supporter Karys Rhea warned against “woke” movements “as if they were a fundamental problem for Jews worldwide.”

Likud and the Israeli government aim to build new international cooperation structures on this basis. An example was seen after the PfE general assembly in Madrid on February 9, when Likud announced it now holds observer status within the group.

According to a report in tagesspiegel in March, Israeli Foreign Minister Gideon Saar instructed Israeli diplomats in France, Sweden, and Spain to abandon previous practices and “establish direct contact with far-right parties, namely the RN, Sweden Democrats, and Vox.”

Likud’s move appears significant at a time when Trumpist movements in the US are also building and intensifying ties with right-wing groups in Europe.

Just before the PfE summit in February, Kevin Roberts, President of the Heritage Foundation, which has close ties to Trump, traveled to Madrid to meet with PfE politicians.

Furthermore, first Elon Musk and then US Vice President JD Vance announced their support for the Alternative for Germany’s (AfD) campaign in the German federal elections.

The AfD is increasingly aligning itself with both Republican circles in the US and the Israeli right. In a post on X the day after the federal elections, Chikli declared that the party taking the clearest stance against “anti-Israel” groups was “surprisingly” the AfD.

In April 2019, the AfD introduced a bill in the Bundestag to ban the anti-Israel Boycott, Divestment, and Sanctions (BDS) movement, and another bill in June 2019 to ban all Hezbollah-related activities in Germany.

Although Chikli notes the presence of voices within the AfD that “still cause concern,” such as former MEP and current Bundestag member Maximilian Krah, who downplayed the historical legacy of the SS, he underscores that he sees no problem working with other leaders, particularly AfD Co-Chair Alice Weidel.

The Israeli minister added that he “hopes” the AfD can distance itself from individuals like Krah.

The AfD leads the Europe of Sovereign Nations (ESN) group within the EP. The party was previously a member of the Identity and Democracy (ID) group, led by Marine Le Pen in the former EP, but was expelled after controversial incidents.

Currently, it appears that the RN and similar parties are making particular efforts to avoid association with the AfD, but it is understood that the bricks in the “cordon sanitaire” built by the right against the further right are slowly being removed.

The close cooperation between the Netanyahu government in Israel and the European far-right also puts more pressure on Berlin to open up to the “far-right.”

Felix Klein, the outgoing German government’s antisemitism commissioner, announced he would not attend the Jerusalem conference, citing the presence of far-right extremists.

However, Friedrich Merz, leader of the CDU and expected to be the next Federal Chancellor, has declared his “almost unconditional” willingness to work with Netanyahu. Merz stated he would invite Netanyahu to Berlin, challenging the International Criminal Court (ICC), which issued an arrest warrant for the Israeli Prime Minister for war crimes and crimes against humanity.

Responding to questions about Netanyahu’s Likud party being granted official observer status in the “far-right” PfE, Merz insists this will not hinder Germany’s deep cooperation with Israel.

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Serbia and Hungary sign comprehensive military cooperation agreement

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According to the Serbian channel RTS, Serbia and Hungary signed a comprehensive military cooperation agreement on April 1.

The agreement was finalized by Serbian Defense Minister Bratislav Gašić and his Hungarian counterpart, Kristóf Szalay-Bobrovniczky.

Serbian President Alexandar Vučić stated that this agreement solidifies the strategic partnership in defense established in 2023 and moves the two nations closer to forming a full-fledged military alliance.

Vučić noted that while Hungary is a NATO member, unlike Serbia, “considering the number and importance of joint activities,” Hungary stands out as Serbia’s most significant military partner among all countries in the region.

“The key elements of these relations are military cooperation through conducting bilateral and multinational exercises, and military-technical cooperation for the supply of systems and weapons,” the Serbian leader added.

Furthermore, Vučić emphasized that the defense ministries of both countries have agreed to organize 79 joint events this year, a significant increase from the record 48 events held in 2023.

Reports indicate that Belgrade and Budapest plan to establish cooperation in military medicine, training, and industry, as well as conduct joint military exercises.

Additionally, Vučić highlighted the importance of Hungary for Serbian trade.

The Serbian leader pointed out that the trade volume between the two countries reached €3.3 billion last year. Since 2020, Serbia’s exports to Hungary have increased 5.6 times, while imports from Hungary have risen 2.3 times.

According to data from the analytics portal OEC, in 2023, Hungary ranked second among Serbia’s export destinations with $2.26 billion (a 6.9% share) and third for imports, totaling $1.83 billion (a 4.7% share).

For comparison, the Russia-Serbia trade volume was $3 billion in 2023 but declined to $2.4 billion in 2024.

The defense ministries of Serbia and Hungary had previously signed an agreement in June 2023 to strengthen military and military-technical cooperation in the Serbian town of Palić, near the Hungarian border.

The current Serbian-Hungarian defense agreements were established two weeks after a defense declaration was signed between the Defense Ministries of Croatia, Albania, and the partially recognized Kosovo – all neighbors of Serbia.

Signed in Tirana on March 18, that declaration includes provisions for personnel training, joint exercises, countering external threats, intelligence sharing, and “harmonizing the policies and positions of the participants with Euro-Atlantic multilateral structures.”

Meanwhile, Anastasiya Maleshevich, a researcher at the Moscow State Institute of International Relations (MGIMO), told the Vedomosti newspaper that the signed memorandums do not constitute full military alliances but do encourage joint military exercises.

The expert suggested that Serbia’s agreement with Hungary serves as a response to the agreements perceived as hostile between Croatia, Albania, and the unrecognized Kosovo, which is prohibited from having its own army.

Maleshevich explained, “For Serbia, military rapprochement with Hungary, a NATO country, can serve as a symbolic retreat from the doctrine of neutrality for now and is a necessary step, but it also aims to hinder the development of regional military alliances directed against Belgrade.”

Yuliya Semke, chief expert at the Center for Comprehensive European and International Studies of the Higher School of Economics (HSE) in Russia, observed that Croats and Albanians traditionally favor relations with Kosovo over Serbia, whereas Hungary has been steadily increasing its cooperation with Belgrade.

The expert described the agreement with Budapest as a responsive measure, stating, “The tripartite memorandum is clearly anti-Serbian and extremely painful for Serbia; just like any agreement foreign countries make with Kosovo. For Belgrade, this is unacceptable, as they consider this territory their own.”

Semke noted that actions by NATO members Croatia and Hungary, engaging in agreements with potential rivals in the Balkans, do not perfectly align with the NATO framework.

She added that Budapest’s foreign policy often diverges from the general European consensus, recalling that Hungary has long acted as the primary mediator in Serbia’s EU integration process.

Semke concluded that such agreements indicate a fragmentation, or “regionalization,” beginning to emerge in the security policies of individual European nations, leading to the formation of “interest groups.”

“This does not mean a split within NATO,” she stated, “but it prepares the ground in Europe for interstate agreements outside this military alliance, between some members of the alliance and non-member countries.”

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