Two rivals, one nomination. The competing fates of Germany's contenders for the post of chancellor in the ruling Christian Democratic Union (CDU) and the opposition Green Party appear to have set the stage for the September general election.
At stake is who will replace Angela Merkel, who will leave the country's leadership, a job she first undertook in 2005. And the omens so far are good for the Greens while not so promising for the CDU. Both parties entered the campaign season with the same challenge.
To pick its candidate for chancellor from a shortlist of two, the Greens saw a smooth and noiseless process, as co-leader Robert Habeck yielded the stage to Annalena Baerbock. The 40-year-old former trampolinist is now the most compelling new arrival on the European political stage.
Women leaders from Jacinda Ardern of New Zealand to Sanna Marin of Finland have emerged from the Covid-19 crisis with strong reputations. Despite a punishing third wave of infections now under way, Mrs Merkel has also seen her approval ratings bounce in the pandemic. She leaves on a high that defies the normal popularity trajectory of long-serving leaders.
As an ecologist, Ms Baerbock is also seeking high office at a time when the climate emergency is at the top of the political agenda. A post-carbon, climate policy-tuned economy is clearly going to revolutionise Germany in the years ahead and a Green voice in making those changes will appeal to many voters.
The problem for the CDU is that it is getting into all sorts of tangles trying to replace Mrs Merkel. It, too, initially chose a woman as its next standard bearer. But Annegret Kramp-Karrenbauer pulled out, leaving only men competing for the party leadership.
When it came to the point last week of registering the centre-right's candidate, the CDU's Armin Laschet, the Minister-President of North Rhine-Westphalia, had to endure a split caucus vote from a rival. Markus Soder, the Minister-President of Bavaria, which is dominated by the CDU's sister party, the Christian Social Union, threw down the gauntlet but was rebuffed.
The after-midnight vote was a procedural farce and exposed divisions in the ruling party. It gave off the sense of a political grouping gone stale in power. Voters don't like divisions in the ruling elite. The impression that the CDU has run out of ideas and talent is likely to handicap its campaign as well.
Polls already show a bounce for the Greens and a dip for the CDU with both hovering around 28 per cent at the end of last week. Who emerges as poll-topper matters in Germany's coalition-building political tradition. That status provides a gateway to the chance to build the cross-party deal that underpins the next government.
Armin Laschet will be leading a divided coalition of parties in September's election. AFP
The early roots of Germany’s Greens aimed to overthrow the capitalist system. Ms Baerbock is in a moderate tradition that seeks to use market forces to decarbonise the economy. The Greens have previously been minority partners in German governments but never led the country.
The most likely outcome of the election is both the CDU and Greens in government. Given the importance of the Greens' platform, German businesses have embraced the party's rise. A survey of business managers showed 26.5 per cent would support Ms Baerbock, the highest figure for any contender and well ahead of the 14.3 per cent recorded for Mr Laschet.
Whatever the final tally, the next government's impact is likely to be radical but not revolutionary. The mighty German car industry is already signalling that it is ready to go all electric. The Greens' manifesto calls for a hefty carbon tax as well as wealth and transaction taxes.
Economists see these taxes as negative for jobs, especially those in the manufacturing sectors that are the backbone of the economy. But with some industrial giants enfeebled and Germany’s banks hollowed out, there is scope for an overhaul of the strongest economy in Europe.
An electric automobile charging symbol in a parking bay outside a Daimler AG showroom in Frankfurt. The mighty German car industry is already signalling that it is ready to go all electric. Bloomberg
Pushing its industrial base to be a player in clean technology could ensure that Germany remains a global leader
Mrs Merkel came to power promising a shake-up but proved to be a managerial Chancellor. Ms Baerbock could yet prove to be the transforming figure that Mrs Merkel promised to be but has not delivered on. Pushing that industrial base to be a player in clean technology could ensure that Germany remains a global leader. The alternative is to slip into the economic slow-stream just doing the same as it has for decades.
With a degree from the London School of Economics and foreign affairs credentials on her resume from her time in the European Parliament, Ms Baerbock is likely to be a forceful international presence. German diplomacy would change and its strategic positioning would no doubt be uncomfortable for some.
Allies of Mr Laschet caution that he is consistently underestimated. He is not a charismatic figure but it may be only fashionable opinion to write him off.
If he is chancellor of the next government, there would be less of a departure in global terms. The car and energy industries would be under less pressure. But Germany would not under-commit to building back greener – not least because Ms Baerbock is highly likely to be at the cabinet table too.
Damien McElroy is the London bureau chief at The National
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
The flights
Fly Etihad or Emirates from the UAE to Moscow from 2,763 return per person return including taxes. Where to stay
Trips on the Golden Eagle Trans-Siberian cost from US$16,995 (Dh62,414) per person, based on two sharing.
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany - At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people - Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed - Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest - He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
