Merz seeks to quickly push through $3.2 billion in German aid for Ukraine
Speaking at a press conference, Merz said he plans to raise the issue with outgoing German Chancellor Olaf Scholz, who has opposed the package unless funded by additional government borrowing.
Germany's incoming chancellor has presented extensive plans to reform debt break rules to boost defense spending as Europe is expected to take more responsibility for its security and Ukraine during the U.S. presidency of Donald Trump.
Merz's conservative CDU/CSU alliance won the parliamentary elections on Feb. 23 with almost 29% of the vote. The Christian Democrats are in talks with Scholz's Social Democratic Party (SPD) on forming a new government, though the outgoing chancellor said he would not be personally part of the coalition negotiations.
Germany has allocated 4 billion euros ($4.1 billion) in military support for Ukraine this year, and the additional package would raise this to 7 billion ($7.2 billion).
The defense articles contained in the new assistance include three IRIS-T air defense systems, three Skyranger air defense systems, 10 howitzers, surface-to-air missiles, 20 protective vehicles, artillery shells, and drones, the Suddeutsche Zeitung newspaper reported.
According to Merz, the additional aid "can be approved now as off-budget expenditure." The CDU chairman has also unveiled plans for a massive defense spending boost, establishing a 500-billion-euro ($535 billion) special development and defense fund and exempting defense spending above 1% of GDP from debt break rules.
As changes to debt break rules need support from two-thirds of the parliament to pass, Merz hopes to negotiate the bills' passage with pro-Ukraine moderate parties in the current Bundestag as quickly as possible.
In the next parliament, which must convene no later than March 25, Merz could expect stronger opposition. Roughly one-third of the seats will be held by the far-right Alternative for Germany (AfD) and the Left Party (Die Linke), both of which oppose military aid for Ukraine.
Germany has been Ukraine's second-largest military donor after the U.S. Berlin's role is especially important now that the Trump administration has frozen defense assistance for Ukraine, seeking to push Kyiv to the negotiating table.
Read also: Taurus missiles, stronger Europe — what can Ukraine hope for after German elections
We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Post
12 minutes ago
- New York Post
Puma facing an 'existential identity crisis' as shares tumble on profit warning
Puma shares dropped 16% on Friday after the German sportswear brand said it now expects an annual loss as sales decline and US tariffs dent profit. Puma has been struggling to attract shoppers as re-released retro sneakers, such as the Speedcat, have not sold as well as hoped, and CEO Arthur Hoeld, in the role since July 1, said the company needs to 'course-correct.' 'This year, 2025, will be a reset for Puma and 2026 will be a transition year for us,' said Hoeld, formerly sales chief at Adidas, who was appointed by Puma's board in April to turn performance around. 3 Puma has been struggling to attract shoppers as re-released retro sneakers, such as the Speedcat (above), have not sold as well as hoped. REUTERS 'We as a company need to take a hard look at ourselves,' he said on a conference call with journalists. 'We do have tremendous potential with a brand that hasn't been unlocked yet, but a brand that also requires a reset and a new way forward.' Hoeld said he planned to review Puma's growth plan and strengthen the quality of wholesale distribution, and that he would give a broader roadmap on his strategy for Puma by the end of October. 'Puma is facing an existential identity crisis in terms of relevance in a sporting goods industry that is more competitive, and at a time when the largest player Nike is staging its comeback from Autumn/Winter '25,' said RBC analyst Piral Dadhania. Tariff hit US tariffs will reduce Puma's gross profit this year by about 80 million euros ($94 million) despite efforts to offset the pain, including US price hikes in the fourth quarter, Chief Financial Officer Markus Neubrand said. He declined to say how much prices would go up. 3 Puma said US tariffs will reduce gross profit this year by about 80 million euros ($94 million) despite efforts to offset the pain. REUTERS Sportswear retailers like Nike, Adidas and Puma rely on Southeast Asian countries like Vietnam for the sneakers and clothes they import into the United States, making them especially exposed to tariffs. Puma frontloaded shipments of goods from Asia ahead of successive US tariff deadlines, Neubrand said, driving inventory levels up and contributing to more discounting. Most Puma products sold in the United States are made in Vietnam, Cambodia, and Indonesia, Neubrand said, and the company aims to cut its sourcing from China to the US further from 10% currently. In preliminary earnings released late on Thursday, Puma said annual sales would decline by at least 10%, having previously forecast low to mid-single-digit growth. 3 Nike, Adidas and Puma rely on Southeast Asian countries like Vietnam for the sneakers and clothes they import into the US. REUTERS Puma's second-quarter currency-adjusted sales of 1.94 billion euros were weaker than analysts expected, with North America sales dropping 9.1% and Europe down 3.9%. The company did not say how big the annual loss was likely to be. It previously forecast earnings before interest and tax of between 445 million euros and 525 million euros for the year. Puma also cut its capital expenditure plans for the year to 250 million euros from 300 million euros previously.
San Francisco Chronicle
12 minutes ago
- San Francisco Chronicle
India's Modi announces credit worth $565 million to the Maldives and launches free trade talks
COLOMBO, Sri Lanka (AP) — Indian Prime Minister Narendra Modi on Friday announced a $565-million line of credit to the Maldives during a visit to the Indian Ocean archipelago, as the two countries launched formal talks for a free-trade agreement. Modi is visiting the Maldives, known for its upmarket tourist resorts, to mark the 60th anniversary of its independence and diplomatic relations between the two countries. The announcement came during Modi's joint media statement with Maldives' President Mohamed Muizzu. The two-day visit is crucial to India's ambition to control the seas and shipping routes of the Indian Ocean in a race with its regional rival China. It also marks the further easing of diplomatic tensions between the two nations that followed the election of pro-China Muizzu in 2023. Regional powers India and China compete for influence in the archipelago nation, which is strategically located in the Indian Ocean. On Friday, Modi witnessed the exchange of agreements to cooperate in sectors such as fisheries, health, tourism and digital development. He also formally handed dozens of heavy vehicles to the Maldives' defense forces. 'India is Maldives' closest neighbor. Maldives holds an important place in both India's neighborhood- first policy and ocean vision," Modi said. 'India is also proud to be Maldives' most trusted friend.' The line of credit will be used for 'infrastructure and development projects in line with the priorities of the people of the Maldives,' he said. "India will continue to support Maldives in developing its defense capabilities. Peace, stability and prosperity in the Indian Ocean region is our common goal," he added. During Muizzu's visit to India last October, India announced financial support to the cash-strapped Maldives in the form of a $100-million treasury bills rollover and the countries signed a $400-million currency swap agreement. Tensions between India and the Maldives grew since Muizzu, who favored closer ties with China, was elected in 2023 after defeating India-friendly incumbent Ibrahim Mohamed Solih. Leading up to the election, Muizzu had promised to expel Indian soldiers deployed in the Maldives to help with humanitarian assistance. Last year New Delhi replaced dozens of its soldiers in the Maldives with civilian experts. Measure by Modi to promote tourism in India's Lakshadweep archipelago, off the southwestern coast of the Indian mainland, also sparked anger from Maldivians, who saw it as a move to lure Indian tourists away from their country. Indian celebrities then called for a tourism boycott to the Maldives. The dispute deepened when Muizzu visited China ahead of India in January last year, a move seen by New Delhi as a snub. On his return, Muizzu spelled out plans to rid his tiny nation of dependence on India for health facilities, medicines and import of staples. Relations started to improve after Muizzu attended Modi's swearing-in ceremony for a third five-year term. Muizzu has toned down his anti-Indian rhetoric, and official contacts with New Delhi have intensified as concerns grew about Maldives' economy. India has long been a critical provider of development assistance to the Maldives. Meanwhile, the Maldives joined China's Belt and Road Initiative in 2013 to build ports and highways and expand trade as well as China's influence across Asia, Africa, and Europe.
13 minutes ago
Volkswagen suffers $1.5 billion loss from Trump's tariffs
President Donald Trump's tariffs cost German auto giant Volkswagen about $1.5 billion over the first half of 2025, the company said on Friday. Sales in North America plunged 16% due primarily to U.S. tariffs, said Volkswagen, which owns a host of brands including Audi, Lamborghini and Porsche. The company warned of further 'challenges' that will arise from 'an environment of political uncertainty, expanding trade restrictions and geopolitical tensions,' among other factors. Volkswagen marks the latest in a string of major carmakers to announce billions in tariff-related losses. General Motors on Tuesday said tariffs on cars and auto parts drove $1.1 billion in losses over three months ending in June. A day earlier, Jeep maker Stellantis said it expects to have suffered $2.7 billion in losses over the first half of 2025 due in part to U.S. tariffs. Electric-vehicle maker Tesla this week reported a roughly $3 billion drop in revenue over three months ending in June when compared to the same period a year earlier. In a statement on Wednesday, Tesla touted a "strong balance sheet" but acknowledged a "sustained uncertain macroeconomic environment resulting from shifting tariffs." Tariffs of 25% on vehicles imported into the United States went into effect on April 2. The auto tariffs, which apply to cars and auto parts, threaten to raise costs for carmakers that often oversee an intricate supply chain snaked between the U.S., Mexico, Canada and beyond. In a memo in March, the White House touted auto tariffs as a means of bolstering domestic car manufacturers and protecting an industry viewed as important to U.S. national security. The policy, the White House said, will "protect and strengthen the U.S. automotive sector." Volkswagen currently faces total US tariffs of 27.5%, the company said, combining the recent 25% auto tariff on top of preexisting 2.5% tariffs. The company said it expects a worst-case scenario of current tariff levels over the second half of 2025, while in a best-case scenario tariffs could be reduced to 10%. 'There is high uncertainty about further developments with regard to the tariffs, their impact and any reciprocal effects,' Volkswagen said. A trade agreement struck between the U.S. and Japan this week dropped auto tariffs from the universal level of 25% to 15%, putting foreign carmakers in other countries at a disadvantage. The U.S. and European Union are near a deal that would also bring tariffs on European goods down to 15%, the Financial Times reported this week. Trump has threatened to raise tariffs on the EU to 30% on Aug. 1, unless the two sides reach a trade agreement. Despite rising tariff-related costs for automakers, price hikes for new cars have remained low. Car prices rose 0.6% in June compared to a year earlier, registering well below the overall inflation rate of 2.7%. In general, tariff-induced inflation has fallen short of economists' fears in part because companies stockpiled products before the tariffs took effect, allowing them to temporarily avert the higher cost of importing goods, analysts previously told ABC News.
