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Innovation is critical to navigate the twin green and digital transitions and to secure the EUs strategic autonomy. The New European Innovation Agenda, adopted by the Commission in July, aims to unlock Europes innovation potential, and ensure its leading role on the global innovation scene, so that it becomes a place where deep tech innovation creates cutting-edge solutions across the continent.

This is the result of close cooperation with our stakeholders innovators who who are willing and able to lead the new wave of innovation: deep tech innovation, based on substantial scientific or engineering challenges. They are telling the world that Europe has the competitive advantages to become the global powerhouse for deep tech innovations and start-ups for the next generation of researchers, founders, and innovators to create and scale-up in Europe.

The New European Innovation Agenda emphasises our determination to seek solutions to the most pressing societal and economic challenges. Its economic, business, and social impact will be felt everywhere because deep tech ventures aim to provide tangible solutions to our most complex challenges.

Successful deep tech ventures use a mix of talents to tackle a challenge, including scientists, engineers, entrepreneurs. They are at the centre of a complex innovationecosystem that also includes governments, academic institutions, venture capital and big enterprises. In 2020, the team of BioNTech and Pfizer brought the first COVID-19 vaccine from genetic sequence to market in less than a year, demonstrating the strength of this ecosystem. Even while these companies accomplished remarkable achievements at an unprecedented rate, they benefited from the efforts of numerous others in the ecosystem.

As shown by the fact that 97% of deep tech ventures contribute to at least one of the United Nations' sustainable development goals, their focus is on deep, fundamental challenges. This is why they are called 'deep' innovations. Typically, they generate physical goods rather than software. In fact, 83% of deep tech start-ups are developing physical items. They are transforming the innovation equation from bits to atoms, bringing data and computational power into the physical world.

The New European Innovation Agenda represents a significant advancement in the innovation ecosystem of Europe. It makes it possible for the EU to act decisively with five flagship initiatives, made up of 25 concrete actions.

The first flagship initiative concentrates on attracting private institutional investors to build well-developed financial and capital markets by expanding the European Scale-Up Action for Risk Capital (ESCALAR), proposing a Listings Act, and implementing specific measures to support women investors.

The second flagship is focused on supporting deep tech innovation through experimentation spaces and public procurement. Experimentation facilities at universities could be utilised in collaboration with deep tech start-ups. The proposed regulatory sandboxes will help the EU to keep up with the rapid evolution of technology, allowing deep tech breakthroughs to be evaluated and then marketed in the EU.

The third flagship aims to accelerate and strengthen innovation in a genuine pan-European innovation ecosystem across the EU, as well as bridge the innovation gap. It will establish and connect regional deep-tech innovation valleys in up to 100 regions, establish Innospace as a one-stop shop for all European innovation ecosystem players, double the number of hydrogen valleys in the European Union, as well as launch Scaleup 100 initiative to help the 100 most promising deep-tech start-ups become unicorns, a term for innovative ventures each worth more than $1 billion.

The fourth flagship initiative ensures the development and movement of vital deep technology talent inside and to the EU. It will develop one million high-tech experts in fields such as new materials, batteries, synthetic biology, aerospace, and quantum. It will support female entrepreneurship and attract global talent through an innovative matching tool. In addition, new mechanisms, such as the European Network of Innovative Higher Education Institutions, which was recently launched at the Education and Innovation Summit, will be used to ensure close ties between education and innovation.

The last flagship effort focuses on the production and utilisation of comprehensive, comparable data sets and a common data repository that may inform EU-wide policies at all levels. The initiative will also develop European definitions for startup, scale-up, and deep-tech innovation.

We are looking for close cooperation between the Commission and the member states so that European innovation takes a leading role in addressing present and future global challenges. This agenda is a call for action and we are determined to make it concrete.

We encourage all member states and regions to build on our proposals and work with the European Commission and stakeholders to mobilise investments, ensure favourable framework conditions and implement necessary reforms. We also invite universities, at the crossroads of research and innovation, to take an active role in its implementation, especially through the promotion of horizontal and entrepreneurial skills.

From our side, we will continue engaging innovators, entrepreneurs, and citizens more actively in the discussions, enabling them, promoting ideas, and being more responsive to societal demands. It is crucial that every region in Europe benefit from it.

Only together will we be able to achieve the objectives of the New European Innovation Agenda for establishing a truly pan-European innovation ecosystem, where no one is left behind, by using Europes unique talents, intellectual assets, and industrial capabilities in a united effort.

Mariya Gabriel is European Commissioner for Innovation, Research, Culture, Education and Youth.

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Viewpoint: New European Innovation Agenda to speed development and scale-up of innovation across Europe - Science Business

China's "no limits partnership" with Russian President Vladimir Putin and continued obfuscation of Russia's actions in Ukraine, has made the Baltic nationsrethink their relationship with China.

On August 11, Estonia and Latvia announced that they were quitting the 16+1, an economic forum set up by China with Central and Eastern European governments 10 years ago to boost business relations.

The announcement came just after China intensified its military activities around Taiwan which Beijing considers its territory following US House Speaker Nancy Pelosi's trip to Taiwan on August 2.

Lithuania became the first country to quit the forum in November.The country is now set to open its Economic and Trade Office in Taiwan's capital Taipei on September 12, according to local media reports, signaling further cracks in the Baltics' relations with China.

Francesca Ghiretti, an analyst at the Berlin-based think tank Mercator Institute for China Studies (MERICS), told DW that China's closeness with Russia and inaction following the invasion of Ukraine added to the already existing skepticism about Beijing in the Baltics.

"There is an ongoing transformation in Europe," she said, "which is making many rethink their relationship with China."

But Ghiretti said the recent decisions by Baltic nations would not dent the European Union's business relations with China.

"Estonia and Latvia leaving the 16+1 does not mean that the door for business relations with China is closing. This is not the case with them, nor with other EU nations," she said.

In a statement released by the Foreign Ministry, the government highlighted that "Estonia will continue to work towards constructive and pragmatic relations with China, which includes advancing EU-China relations in line with the rules-based international order and values such as human rights."

Latvia also released a similar statement, saying the country "will continue to strive for constructive and pragmatic relations with China both bilaterally, as well as through EU-China cooperation."

The Baltics, Bulgaria, Croatia, the Czech Republic, Greece, Hungary, Poland, Romania, Slovakia, Slovenia and non-EU countries such as Albania, Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia joined the forum. It came to be called 17+1 when Greece joined the forum in 2019.

Though the Baltics initially saw it as an opportunity to boost trade relations with China, in recent years the forum began losing its popularity as tensions with China and Lithuania began simmering.

Lithuanian Foreign Minister Gabrielius Landsbergis also called the platform divisive.

"China's 17+1 format was already redundant and divisive long before Lithuania quit. Latvia and Estonia are now closing the door too. 14+1 should be replaced with EU27+1," he said in a tweet.

The relationship between Vilnius and Beijing has been on the brink since November 2021, when Lithuania allowed Taiwan to open its de facto embassy in the country, making Beijing block exports from Lithuania and slap sanctions on Lithuanian officials.

Lithuania is preparing to open a trade office in Taiwan in September. Ming-Yen Tsai, of the Taipei Representative Office in the EU and Belgium, told DW that Lithuania's enhanced economic and trade cooperation with Taiwan is fully in line with the European Union's policy toward Taiwan.

"The EU has publicly stated that Taiwan is a like-minded partner and supports the development of relations between Lithuania and Taiwan, and has stressed that it will assist Lithuania in resisting China's political pressure and economic coercion," he said.

Estonia and Latvia have not specified their reasons for distancing themselves from China's economic forum, but, in a statement released by Tallinn, the government noted that Estonia had "not attended any of the meetings of the format after the forum's summit last February."

Zsuzsa Anna Ferenczy, assistant professor at the National Dong Hwa University in Taiwan and a former political adviser in the European Parliament, told DW that the 16+1 framework was never a popular initiative.

"It wasn't even a successful one as far as investment in Central and Eastern Europe is concerned," she said.

"The Baltic states remain vulnerable to Russia's aggression, and Beijing's diplomatic support to Moscow against Ukraine hasn't exactly helped raise China's profile in the Baltic states. So a rethink of how the Baltic states relate to both Russia and China is not an option, but a must from the perspective of national interest," she added.

Though Beijing has yet to respond to the departure of Baltic countries from the framework, the China Chamber of Commerce to the European Union (CCCEU) told DW that the development will not cause major investment or business panic for Chinese companies in the EU.

"The China-CEEC cooperation per se is voluntary and serves as one of many factors that businesses will consider in their European expansion strategies. However, the long-term impact on business remains to be seen, and it may be influenced by what happens in bilateral relations, according to the CCCEU.

The EU and China recently held trade talks in July, with both parties agreeing to coordinate their macroeconomic policies and promote global economic stability.

According to Eurostat, the EU's statistics office, in 2021, China was also the third-largest partner for EU exports of goods (10.2%) and the largest partner for EU imports (22.4%).

The CCCEU said business relations with Lithuania would be very different because of the country's close ties with Taiwan.

Ghiretti said the growing tensions between China and Lithuania could be detrimental for the EU.

"As we have long established that European supply chains are highly interconnected, it is difficult for a member state to be hit and have no repercussions on other member states," she said. "In that regard, the EU anti-coercion instrument would be fundamental to be able to push back against coercive instances."

Though Ferenczy expects China to continue using instruments such as economic coercion, aggressive rhetoric and disinformation campaigns targeted at countries that engage with Taiwan, she doesn't think China intends to damage relations with the EU.

"China wants stability in its ties with Europe," she said. "Further endangering market access and trade with EU member states doesn't serve Beijing's interests."

"The EU also wants to stay open to business with China, but be able to defend its interests with defensive tools and diversify its trade partners, she said.

Edited by: Leah Carter

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Why are the Baltics becoming skeptical of relations with China? - DW (English)

The transatlantic alliance is experiencing a renaissance. The war in Ukraine has drawn Washingtons attention back to Europe in ways not seen since the 1990s, when the United States orchestrated NATOs eastward expansion and fought two wars in the Balkans. The United States has supported Ukraine with massive quantities of weapons, rallied the West around unprecedented economic sanctions against Moscow, and bolstered NATO through additional force deployments. It is hard to think of a time in the last generation when transatlantic relations were stronger.

Yet the Biden administrations engagement with Europe is ultimately unsustainable. Russia and the war in Ukraine will no doubt remain a significant focus of the United States in the months and years to come. But even though U.S. support for Ukraine is unlikely to waver, there is no way Washington will be able to maintain the current level of diplomatic engagement, force deployments, and resourcing to Europe over the longer term. The pivot to Asia has not ended. The risk of conflict in Asia, where China may attack Taiwan, could abruptly reshuffle U.S. priorities. Chinas continued rise will pull U.S. attention back to the Pacific. Washington will likely find it impossible to balance the demands of its allies in Europe and Asia while maintaining the force presence necessary to deter Russia and China. The United States is overstretched.

But instead of developing a strategy to address this dilemma, especially given Europes newfound focus on securitynot to mention its population of more than 450 million and an economy equaling that of the United Statesthe Biden administration has pretended it does not exist. While the United States has shown itself to be indispensable, it has not used this moment to tackle the deep-seated structural issues plaguing European defense. The United States should be pursuing a strategy to push Europe to take charge of its security, turning Europe from a security dependent to a true security partner. The United States should call for the creation of a European pillar within the NATO alliance and to fully back the European Union becoming a stronger defense actor. The danger is that instead of transforming European defense in response to Russias invasion and ushering in a new era, the response merely entrenches a status quo that both sides of the Atlantic ultimately find deeply frustrating and untenable.

Washington does not know what it wants from Europe. Every U.S. president has called for Europeans to spend more on defense, but the overarching goal of U.S. policy has not been to push Europe to stand on its own, shoulder to shoulder with the United States. U.S. political leaders and top officials may believe that the United States is being clear that it wants Europe to do more to handle its security. But the diplomats and officials who develop U.S. policy on Europe enjoy European dependence and the influence it provides: the United States gets to call the shotsand they want as much American sway in Europe as possible.

In 2000, Lord George Robertson, then NATOs secretary-general, highlighted this split. The United States suffers from a sort of schizophrenia, he said. On the one hand, the Americans say, You Europeans have got to carry more of the burden. And then when Europeans say, OK, we will carry more of the burden, the Americans say, Well, wait a minute, are you trying to tell us to go home? Nearly two decades later, when French President Emmanuel Macron led the push for European strategic autonomy, Washington fretted about a renewed plot to decouple Europe from NATO. As a result, the United States has used its immense influence in Europe to block efforts that could lead to a more independent Europe.

It would be acceptable to preserve American indispensability if U.S. attention and resources were limitless. But the challenge for the United States is that there is only so much senior-level attention to go around. Time is precious, and the fight for resources within government and Congress is often zero-sum. Moreover, U.S. military assets are not limitless, despite a $750 billion budget. This leads to intense bureaucratic infighting over what region or theater should be the U.S. priority for high-level attention and resources.

The Biden administration entered office prioritizing Asia, rightly describing China as the pacing threat. But Russias invasion has now put Europe temporarily on top in the bureaucratic struggle for resources and visibility. As a result, Europe has been flooded with visits from senior U.S. officials and additional U.S. troops20,000 extra personnel as of the end of June, everywhere from the Baltics and Poland to Italy and Spain.

European officials praised the United States return to the continent. But as Nancy Pelosis August visit to Taiwan has presaged, the foreign policy pendulum will ultimately swing back to Asia. Europe will lose this zero-sum fight over U.S. attention and resources.

On the surface, Russias invasion of Ukraine seems like the shock that would finally force Europe to accept U.S. entreaties to increase its defense spending. European countries will mostly hit NATOs two percent spending target. Germany announced a Zeitenwende (new era) and approved a 100 billion euro increase in defense spending. Europe has committed to spending about $200 billion in the coming years. The additional funds should improve the woeful capabilities of European militaries, strengthen NATO, and reduce some of Europes fundamental combat reliance on the United States.

But the increase in spending is unlikely to alleviate much of the strain on U.S. forces or go far enough in the long term. Over the past six months, European countries have sent enormous quantities of advanced equipment to Kyiv. Eastern Europe has divested fleets of Soviet-era equipment into Ukrainian hands. Western European countries have sent advanced antitank weapons and artillery, depleting stocks that will eventually need to be replaced. Moreover, rising inflation is also eroding the value of European defense-spending increases.

The more significant structural problem is that European defense-spending increases are going not toward Europes collective defense but to individual countries national defense. Europe does not spend to protect the continent as a whole; the United States does. Washington provides the critical capabilities and high-end assets (transport, air refueling, and air and missile defense) that enable Europe to fight for Europe. Almost none of the additional defense spending will go toward acquisitions that enable Europe to fight as Europe and therefore reduce the strain on the U.S. military. Germany, given its size, could fill some of the gaps, but its needs are too great elsewherefor example, to replace fleets of equipment and increase the readiness of its forces. European militaries all have NATO capability targets, which ensure that member countries can fill certain roles, but these targets are designed to help European forces integrate with the United States through NATO, meaning the reliance on the U.S. military is baked in. Despite spending tremendous amounts on defense, Europe is still likely to be dependent on the United States, underscoring the broader problem with the current approach to European security.

The European Union should be a global military power. It collectively spends $200 billion annually on defense, its economy equals that of the United States, and its members are tied together in a political union. Yet European militaries are in a woeful state, despite increases in defense spending since 2014. Europe does not just need to spend more on defense; it needs to rationalize and integrate its efforts. But proposals for reforming European defense inevitably run into U.S. opposition, bureaucratic turf wars (particularly between NATO and the EU), parochial national outlooks, and vested commercial and political interests.

As the guarantor of European security, the United States must lead the transformation by insisting on the creation of a strong European pillar of NATO that is capable of defending the continent. Europe would strive to operate as one within NATO, as the alliance would focus on turning European forces into a capable fighting force, with or without the United States. Creating a European pillar within NATO would require empowering the EU, a political and economic union that looks out for broader European interests. The EUs shared currency and central bank provide the potential financial underpinning for the EU to adopt a prominent defense role. The union has legal and institutional leverage to drive national-level compliance and coordination, critical to rationalizing Europes unwieldy defense industrial sector. The goal of the EU is not to conjure a European army but to enable Europe to defend itself.

The EU can take on the role of the primary financier of European defense, filling gaps beyond the capacity of member states, such as procuring air and missile defense, air tankers, and transport. Nothing prohibits the EU from buying military equipment, which could be made available to member states or NATO. For instance, the EU could finance the acquisition of massive stockpiles of munitions, rounds of artillery, and precision-guided missiles (which Europe ran out of during its intervention in Libya). The EU has already played a similar role in Ukraine, providing 2.5 billion euros out of its new lethal assistance fund to backfill the defense budgets of countries supplying arms to Ukraine. In June, the European Commission also announced the formation of a 500 million euro fund to incentivize countries to coordinate their new defense spending, make joint procurements, increase interoperability, and create economies of scale.

These are important initiatives to integrate and rationalize European defense efforts, and the United States should be pressuring the EU to dramatically expand these programs. Although the Biden administration has described itself as the most pro-EU administration ever, it can claim that title only on the grounds of economic cooperation. On defense, it has largely maintained the United States traditional skepticism. It has not actively encouraged EU defense initiatives or called on the EU to expand them. For example, when President Joe Biden attended a European Council Summit in March in the early weeks of the war, he missed a golden opportunity to back a proposal on the table for the EU to borrow funds to invest in defense. If the president had simply told European leaders that if the EU could borrow money for military purposes, just as it did for the COVID-19 pandemic, he could have helped to usher in a new era in European defense. The United States retains immense influence in Europe, especially on defense. If the EU is to play a more prominent defense role, it will need strong U.S. backing.

The question U.S. officials need to ask themselves is whether their goal is to make the United States indispensable to Europe or to make Europe an indispensable partner of the United States. A Europe that can take care of its security will not fracture the alliance, undermine NATO, or prompt a decoupling from the United States. The transatlantic bond will strengthen as Europe strengthens.

Just look at what is happening economically between the United States and the EU. The need for transatlantic cooperation to set the economic rules of the road in the face of a rising China prompted the launching of the U.S.-EU Trade and Technology Council. Overall, it has dramatically improved transatlantic relations. A stronger Europe, with capable land, air, and naval forces, would be a boon to the United States and its Asian partners. It would also prompt closer coordination within NATO, as the United States would stop taking Europe for granted.

The real threat to the transatlantic alliance is the status quo. The 25-year U.S.-led effort to prevent the EU from being an independent military actor has been largely successful. But although this has preserved the United States indispensable role, the result is that the state of European defense could hardly be worse. There is also a clear danger that the United States will decide it does not want to be indispensable to Europe anymore. The next president could be an anti-Atlanticist such as Donald Trump or Josh Hawley, the latter of whom voted against Sweden and Finlands NATO membership on August 3. But just as likely is an outcome in which Europe gets demoted, Russia is again wrongly dismissed as a paper tiger, and the transatlantic alliance suffers as its indispensable partner loses interest.

To avert this future, the United States must acknowledge that it wants Europe to be an indispensable partner that can stand shoulder to shoulder with the United States. Pursuing such a strategy and building a European pillar within NATO would be a generation-long process that will require intensive U.S. engagement, pushing European allies and partners in a new direction. The time to start the transformation is now.

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Europe on Its Own: Why the United States Should Want a Better-Armed EU - Foreign Affairs Magazine

European governments are scrambling to fill underground storage with gas supplies to provide households with enough fuel to keep homes warm during winter.

Picture Alliance | Picture Alliance | Getty Images

Germany's natural gas storage facilities surpassed a fill level of more than 75% this month, two weeks ahead of schedule, as Europe's largest economy scrambles to prepare for the coming winter.

The latest data compiled by industry group Gas Infrastructure Europe shows Germany's gas storage facilities at slightly over 77% full.

Chancellor Olaf Scholz's government initially planned for gas storage levels to reach 75% by Sept. 1. The next federally mandated targets are 85% by Oct. 1 and 95% by Nov. 1.

European governments are racing to fill underground storage facilities with natural gas supplies in order to have enough fuel to keep homes warm during the coming months.

Russia has drastically reduced natural gas supplies to Europe in recent weeks, with flows via the Nord Stream 1 pipeline to Germany currently operating at just 20% of agreed upon volume.

Moscow blames faulty and delayed equipment. Germany, however, considers the supply cut to be a political maneuver designed to sow European uncertainty and boost energy prices amid the Kremlin's onslaught against Ukraine.

Even if Germany gets through the winter, the problem might come in spring next year, so the uncertainty is there and companies are concerned.

Marcel Fratzscher

President of DIW

"Germany developed a business model that was largely based on dependence on cheap Russian gas and thus also a dependence on a president who disregards international law [and] to whom liberal democracy and its values are declared enemies," Economy Minister Robert Habeck said at a press conference on Monday, according to a translation. "This model has failed, and it is not coming back."

His comments came as Germany's gas market operator, Trading Hub Europe, announced that households nationwide would have to pay almost 500 euros ($507.3) more per year for gas.

The new tax is designed to help utilities cover the cost of replacing Russian supplies, though Germany's government has faced calls to provide further relief for the public.

"All measures, and this is undisputed, have a price," Habeck said. "All measures have consequences and some of them are also impositions, but they lead to us being less susceptible to blackmail and us being able to decide on our energy supply independently of Russia."

Europe's race to save enough gas to get through the colder months comes at a time of skyrocketing prices. The surge in energy costs is driving up household bills, pushing inflation to its highest level in decades and squeezing people's spending power.

Germany, until recently, bought more than half of its gas from Russia. And the government is now battling to shore up winter gas supplies amid fears Moscow could soon turn off the taps completely.

"I think the chances are quite good that Germany will get to 90% storage capacity by the beginning of winter, but that still is not sufficient to really avoid a gas shortage," Marcel Fratzscher, president of the German Institute for Economic Research (DIW), told CNBC's "Squawk Box Europe" on Tuesday.

"Even if Germany gets through the winter, the problem might come in spring next year, so the uncertainty is there and companies are concerned," Fratzscher said.

"The uncertainty is poison for the economy. Companies investing less, consumers consuming less and so the result is that we are seeing a massive slowdown of the German economy," he added.

RWE Chief Financial Officer Michael Muller told CNBC's Joumanna Bercetche on Aug. 11 that the firm's gas storage levels stood above 85%.

Muller said the Essen-headquartered company, one of Germany's largest energy providers, was "well on track" to reach the government's target by November.

Analysts told CNBC that Germany has been able to rapidly fill its gas stocks in recent weeks because of a number of factors. These include strong supply from Norway and other European countries, falling demand amid soaring energy prices, businesses switching from gas to other types of fuel, and the government providing more than 15 billion euros in credit lines to replenish storage facilities.

"If you spend a lot of money then it is relatively straightforward to fill the storage of course," Andreas Schroeder, head of energy analytics at ICIS, a commodity intelligence service, told CNBC via telephone.

If the German government "wants to see this as a success, then fine. We will see," Schroeder said. "But Germany is still not faring better than other countries, like France or Italy. They have filled their storage more without paying the huge subsidies."

One reason Germany has found itself with a "strategic disadvantage" compared with other major European economies, Schroeder said, is that Germany's gas storage had previously been partly owned by Gazprom-controlled facilities.

Germany's Rehden natural gas storage facility is seen as crucial to the country's energy security.

Picture Alliance | Picture Alliance | Getty Images

This was the case with Germany's huge Rehden storage facility, for example, a site critical to the country's energy security.

"In other countries, [such as] France and Italy, you didn't have this problem at the outset," Schroeder said, adding that he remains skeptical about whether Germany will be able to reach the "quite ambitious" 95% storage level target by November.

"Gas storage is not enough. You need demand reductions as well," Schroeder said.

The European Union agreed last month to reduce natural gas use to offset the prospect of further Russian supply cuts. The draft law is designed to lower demand for gas by 15% from August through to March with voluntary steps.

Mandatory cuts would be triggered for the 27-nation bloc if there aren't enough savings, however.

Zongqiang Luo, gas analyst at energy consultancy Rystad Energy, told CNBC that Germany's position as the biggest consumer of natural gas in Europe means it is tricky to compare Berlin's storage levels to other European countries.

Luo said only France, Spain and Italy were comparable in terms of the scale of their gas consumption, but France's reliance on nuclear production for power generation, Spain's use of LNG import terminals and Spain and Italy's reliance on Algerian gas exports mean they all differ from Germany.

France's gas storage facilities were last seen at nearly 87% full, according to GIE, while Spain and Italy's gas stocks stood at roughly 81% and 77%, respectively.

"So, I will say compared to Germany's storage plan with these three countries, Italy, France and Spain, I will say that so far Germany has done a good job," Luo said.

"But let's see how they are going to fulfill the target for the next two months," he said. "This will be very, very critical for the coming winter."

Originally posted here:
Germany has worked hard to shore up winter gas supplies and it's ahead of schedule - CNBC

German exports beyond the European Union fell by 7.6% on the month in July, the Federal Statistics Office said on Monday, marking a weak start to the second half in the engine room of Europe's largest economy.

The decline came after three rises in a row.

The economy stagnated in the second quarter, and finance minister Christian Lindner said this month the economic situation in Germany was deteriorating and the outlook fragile.

Separate official data released on Friday showed German producer prices jumped at the fastest pace on record in July. The economy is stuck in a stranglehold of soaring costs and weakening growth because of the Ukraine war.

The United States remained the most important trading partner for German exporters in July, with exports of goods to the US market rising 14.9% on the year. Exports to China rose 6.1% on the year. Exports to Russia fell 56.0% on the year.

The German economy became more dependent on China in the first half of 2022, with direct investment and its trade deficit reaching new heights, despite political pressure on Berlin to pivot away from Beijing, according to research seen by Reuters.

In April of this year, the president of Germany's Federal Association of Wholesale, Foreign Trade and Services (BGA), Dirk Jandura said a swift end to the current price pressures facing businesses and consumers is "not foreseeable".

News byReuters, edited byESM your source for the latestsupply chainnews. Clicksubscribeto sign up toESM: European Supermarket Magazine.

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German Exports Beyond The EU Slump In July - ESM European Supermarket Magazine