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Bangladesh-German Relations: Current Trends and Prospects

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 By 2026, Bangladesh will be upgraded to a middle-income country and it has several challenges along with the positive aspects. On the other hand, amid and after the post-Covid new normal, Germany, likewise other European Union (EU) members, needs to harness new avenues for economic and infrastructural development along with facing the challenges of economic reconstruction. Bangladesh has gradually turned to a geostrategic and economic hub of South Asia and Southeast Asia. At least ten developmental mega projects and speedy economic acceleration creates a new avenue for the Bangladesh-EU relations and especially for the Bangladesh-German relations.

Historical relations

Bangladesh has long-standing and reliable traditional and historical relations with Germany since the independence of Bangladesh in 1971. Germany (former East Germany) was the first country in Europe to officially recognize Bangladesh. After establishing the diplomatic relations on February 4, 1972, the bilateral relations between the two countries began to grow increasingly both in “depth and dimension”. Both countries have a long and successful bilateral relationship on most international issues and platforms. Between 1972 and 2020, Bangladesh received approximately € 3.03 billion in commitments from Germany as part of bilateral financial and technical cooperation. Besides, when Bangabandhu Sheikh Mujibur Rahman and his family was assassinated on August 15, 1975, his daughter and the current Prime Minister Sheikh Hasina was in Germany.

Economic ties

The bilateral economic ties between Bangladesh and Germany have been steadily increasing over the past ten years. Europe, especially Germany is now one of the enthralling and lucrative export destinations for Bangladesh. According to the Foreign Ministry of Germany, Germany is currently the second largest export market for Bangladesh. The volume of bilateral trade with Germany has increasingly enlarged in recent years. In 2018, Bangladesh exported goods worth about 5.8 billion Euros to Germany and imported worth 800 million Euros with a gross 6.6 billion bilateral trade. 90% of the exporting products Bangladesh to Germany are textile material along with frozen foods and leather products.

In a recent meeting with the railway minister of Bangladesh on May 20, German Ambassador to Bangladesh Mr. Peter Fahrenholtz has expressed his desire to be a part of the development partner of Bangladesh especially through investing in the Railway sector. The government of Bangladesh has given more importance to the railway sector. Many projects are currently underway in the railways including Dhaka to Jessore through the Padma Bridge Rail Link Project, Bangabandhu Railway Bridge, Dhaka-Cox’s Bazar rail link and Jessore-Satkhira rail line. Germany with its high technological advantage can play an important role in investing as well as digitalizing the railway sector of Bangladesh. Along with the railway, German investment in Bangladesh is also increasing in other sectors since 2016. Germany got approximately 4 billion dollars for several projects in Bangladesh in various sectors including electricity and textiles. The notable works of German-based companies received, included e-passports, 3,600 megawatt LNG-based power plants and the supply of 15 oil and gas-fired engines to generate 260 megawatts of electricity.

In the investment sector, the involvement of developed countries like Germany in the development and progress of Bangladesh is certainly very encouraging. Amid the hard time of Covid-19, Germany has agreed to provide 339.54 million euros for various development projects in the country which is signed by the Secretary of the Economic Relations Division (ERD) of Bangladesh and the Ambassador of Germany on behalf of their countries respectively. It is to be noted that technical and financial agreements are executed between the governments of Bangladesh and Germany every two years. Of the 339.54 million euros, 48.4 million euros are being given as grants and 292.5 million euros as loans, which are repayable at nominal interest for 25 years. These grants and loans will be used in various development projects in the country. The news of increased foreign investment and foreign reserves of Bangladesh is undoubtedly reassuring even in the face of Covid-19 epidemic.

According to Bangladesh Investment Development Authority (BIDA), from the 2016-17 fiscal year to March 2020, about US $11 billion foreign exchange investments have been implemented. In the 2019-20 fiscal year, gross foreign direct investment (FDI) inflows to Bangladesh was approximately US $3.23 billion. Besides, the foreign reserve of Bangladesh has exceeded 45 billion dollars. It is a pride for the country that born from poverty, famine and war, the country is now lending foreign reserves to Sri Lanka and Sudan through currency swap. Bangladesh’s position in the World Bank’s Ease of Doing Business Index 2021 has been upgraded to 168th from 176th with 8 steps forward than previous year. All these will help in improving the investment environment in the country, setting up new industries and creating new avenues for expanding bilateral economic relations between the two countries. Speaking at a seminar organized by the German-Bangladesh Chamber of Commerce during a visit to Germany in October 2018, the Prime Minister of Bangladesh called on German entrepreneurs to invest in the pharmaceutical, tourism, manufacturing, ICT, ceramics and renewable energy sectors for joint ventures.

In order to expand German-Bangladesh bilateral trade in the future, new export sectors need to be harnessed keeping in mind the need for environment and labor-friendly production. To diversify the exporting areas, shipping industry, vaccine production and technological cooperation could be the potential areas of bilateral trade in the upcoming days. Although Bangladesh has given priority to the textile sector, the sectors of leather goods, frozen fish, engineering products and medicines need to be developed to diversify the exporting products. The technological sector and agricultural and industrial equipment of Germany is far better than Bangladesh. Bangladesh has been developing 100 economic zones where German industries can work through investment and technology sharing. In a word, there is huge potential to accelerate the bilateral relations to a new height.

Bangladesh has been able to retain its GDP growth rate at around 7 per cent in the last decade before the Covid-19 attacked. Even during the pandemic, Bangladesh is among the fewer countries that become able to maintain a positive growth rate at 5.24 per cent in the 2019-20 fiscal year. To make its economic development more dynamic, the Bangladesh government is focusing on the mega infrastructure projects i.e., Padma Multipurpose Bridge, Metro rail project or Matarbari deep seaport. Bangladesh will soon become a middle-income country where there are enormous opportunities for Germany for trade and investment. Bangladesh’s economic development has been praised by various German economic organizations, the International Monetary Fund, the World Bank and the Asian Development Bank as well. Among the 27 countries of the European Union, Germany is the largest consumer market that leads to competition between exporting countries to capture the German market. In 2019, Germany imported 1,104.1 billion euros worth of goods from abroad, however, Bangladesh only captured 5.64 billion euros where Bangladesh and Germany have huge room for development.

Human Security Aspects

‘Environmentalism’ has been gaining momentum in Europe especially in Germany that tends to lean them towards eco-friendly products which paves the way for Bangladesh to export tea and jute-oriented products. Besides, Germany is one of the leading countries in the world in terms of producing alternative environment friendly fuels. In the field of alternative energy, Bangladesh can utilize the experiences and technological support of Germany. Climate change and global warming are common threats for the world. Bangladesh as the worst sufferer and Germany as an active proponent of climate diplomacy, should work together to make the world sustainable, livable and eco-friendly. Germany can contribute to the Delta plan 2100 and Climate funding to join hands with Bangladesh to mobilize resources for climate and security. Germany may provide Bangladesh technological know-how on how to produce and manage sustainable and renewable energy.

The present state leader of both Bangladesh and Germany has been praised for their humanitarian stands above all other narrowly-defined state interests. The two countries are leading in sheltering refugees around the world. Since 2017, a large number of Rohingya FDMNs fled to Bangladesh due to the “genocidal intent” of the Myanmar Army. As the socio-economic, environmental and security dimensions of sheltering over 1.2 million Rohingya refugees are increasing day by day, the Prime Minister of Bangladesh Sheikh Hasina, “the mother of humanity”, has been seeking sincere response from the international community to accentuate safe and dignified repatriation of the Rohingya FDMNs. The Rohingya crisis is a haze on the economic development of the country. Germany should intensively cooperate with Bangladesh in finding a durable solution for the forcibly displaced Rohingya Muslims in Bangladesh.

People-to-People Contact

The cultural relationship and people-to-people contact of Bangladesh and Germany are very strong. Cultural cooperation is mainly directed through the Goethe Institute. In Bangladesh, the Institute is the key meeting place for all those interested in Germany. It offers diversified cultural events through film festivals, seminars and lectures on contemporary arts, culture and exhibitions of both German and Bangladeshi artists. German government has been providing different education and cultural exchange programs for the foreign students. Besides, in the higher study level, they are providing scholarships like German Academic Exchange Service (DAAD) scholarship which is a really good opportunity for people-to-people contact and cultural affinity. The DAAD and other organizations offers a number of scholarships to Bangladeshi students and young researchers each year in order to promote the academic exchange between Germany and Bangladesh. Besides, in February 2021, GIZ, a German-based organization, has expressed interest in providing more technical assistance to Bangladesh to create skilled human resources in the field of textile education. The company has proposed a new project called ‘Higher Education and Leadership Development for Sustainable Textiles in Bangladesh (HELD)’ to assist the Sustainable Development Goals by 2030.

To conclude, Bangladesh-German relations have been enjoying great historical, economic and cultural ties. Germany is one of our biggest trading partners and the second largest market for garments in particular. But now pharmaceuticals, eco-friendly agricultural products, leather and ceramic products need to be prioritized for export diversification. Germany is an all-weather development partner of Bangladesh. They are supporting Bangladesh in numerous developmental activities through GIZ in the technology, health, education, environment, climate change, good governance and renewable energy sectors. They should work in a coordinated way to develop bilateral relations and to become trusted development partners in the upcoming days.

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Iceland’s Historic(al) Elections

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The morning of September, 26 was a good one for Lenya Run Karim of the Pirate Party. Once the preliminary results were announced, things were clear: the 21-year-old law student of the University of Iceland, originating from a Kurdish immigrant family, had become the youngest MP in the country’s history.

In historical significance, however, this event was second to another. Iceland, the world champion in terms of gender equality, became the first country in Europe to have more women MPs than men, 33 versus 30. The news immediately made world headlines: only five countries in the world have achieved such impressive results. Remarkably, all are non-European: Rwanda, Nicaragua and Cuba have a majority of women in parliament, while Mexico and the UAE have an equal number of male and female MPs.

Nine hours later, news agencies around the world had to edit their headlines. The recount in the Northwest constituency affected the outcome across the country to delay the ‘triumph for women’ for another four years.

Small numbers, big changes

The Icelandic electoral system is designed so that 54 out of the 63 seats in the Althingi, the national parliament, are primary or constituency seats, while another nine are equalization seats. Only parties passing the 5 per cent threshold are allowed to distribute equalisation seats that go to the candidates who failed to win constituency mandates and received the most votes in their constituency. However, the number of equalisation mandates in each of the 6 constituencies is legislated. In theory, this could lead to a situation in which the leading party candidate in one constituency may simply lack an equalisation mandate, so the leading candidate of the same party—but in another constituency—receives it.

This is what happened this year. Because of a difference of only ten votes between the Reform Party and the Pirate Party, both vying for the only equalisation mandate in the Northwest, the constituency’s electoral commission announced a recount on its own initiative. There were also questions concerning the counting procedure as such: the ballots were not sealed but simply locked in a Borgarnes hotel room. The updated results hardly affected the distribution of seats between the parties, bringing in five new MPs, none of whom were women, with the 21-year-old Lenya Run Karim replaced by her 52-year-old party colleague.

In the afternoon of September, 27, at the request of the Left-Green Movement, supported by the Independence Party, the Pirates and the Reform Party, the commission in the South announced a recount of their own—the difference between the Left-Greens and the Centrists was only seven votes. There was no ‘domino effect’, as in the case of the Northwest, as the five-hour recount showed the same result. Recounts in other districts are unlikely, nor is it likely that Althingi—vested with the power to declare the elections valid—would invalidate the results in the Northwest. Nevertheless, the ‘replaced’ candidates have already announced their intention to appeal against the results, citing violations of ballot storage procedures. Under the Icelandic law, this is quite enough to invalidate the results and call a re-election in the Northwest, as the Supreme Court of Iceland invalidated the Constitutional Council elections due to a breach of procedure 10 years ago. Be that as it may, the current score remains 33:30, in favor of men.

Progressives’ progress and threshold for socialists

On the whole, there were no surprises: the provisional allocation of mandates resembles, if with minor changes, the opinion polls on the eve of the election.

The ruling three-party coalition has rejuvenated its position, winning 37 out of the 63 Althingi seats. The centrist Progressive Party saw a real electoral triumph, improving its 2017 result by five seats. Prime-minister Katrín Jakobsdóttir’s Left-Green Movement, albeit with a slight loss, won eight seats, surpassing all pre-election expectations. Although the centre-right Independence Party outperformed everyone again to win almost a quarter of all votes, 16 seats are one of the worst results of the Icelandic ‘Grand Old Party’ ever.

The results of the Social-Democrats, almost 10% versus 12.1% in 2017, and of the Pirates, 8.6% versus 9.2%, have deteriorated. Support for the Centre Party of Sigmundur Gunnlaugsson, former prime-minister and victim of the Panama Papers, has halved from 10.9% to 5.4%. The centrists have seen a steady decline in recent years, largely due to a sexist scandal involving party MPs. The populist People’s Party and the pro-European Reform Party have seen gains of 8.8% and 8.3%, as compared to 6.9% and 6.7% in the previous elections.

Of the leading Icelandic parties, only the Socialist Party failed to pass the 5 per cent threshold: despite a rating above 7% in August, the Socialists received only 4.1% of the vote.

Coronavirus, climate & economy

Healthcare and the fight against COVID-19 was, expectedly, on top of the agenda of the elections: 72% of voters ranked it as the defining issue, according to a Fréttablaðið poll. Thanks to swift and stringent measures, the Icelandic government brought the coronavirus under control from day one, and the country has enjoyed one of the lowest infection rates in the world for most of the time. At the same time, the pandemic exposed a number of problems in the national healthcare system: staff shortages, low salaries and long waiting lists for emergency surgery.

Climate change, which Icelanders are already experiencing, was an equally important topic. This summer, the temperature has not dropped below 20°C for 59 days, an anomaly for a North-Atlantic island. However, Icelanders’ concerns never converted into increased support for the four left-leaning parties advocating greater reductions in CO2 emission than the country has committed to under the Paris Agreement: their combined result fell by 0.5%.

The economy and employment were also among the main issues in this election. The pandemic has severely damaged the island nation’s economy, which is heavily tourism-reliant—perhaps, unsurprisingly, many Icelanders are in favor of reviving the tourism sector as well as diversifying the economy further.

The EU membership, by far a ‘traditional’ issue in Icelandic politics, is unlikely to be featured on the agenda of the newly-elected parliament as the combined result of the Eurosceptics, despite a loss of 4%, still exceeds half of the overall votes. The new Althingi will probably face the issue of constitutional reform once again, which is only becoming more topical in the light of the pandemic and the equalization mandates story.

New (old) government?

The parties are to negotiate coalition formation. The most likely scenario now is that the ruling coalition of the Independence Party, the Left-Greens and the Progressives continues. It has been the most ideologically diverse and the first three-party coalition in Iceland’s history to last a full term. A successful fight against the pandemic has only strengthened its positions and helped it secure additional votes. Independence Party leader and finance minister Bjarni Benediktsson has earlier said he would be prepared to keep the ruling coalition if it holds the majority. President Guðni Jóhannesson announced immediately after the elections that he would confirm the mandate of the ruling coalition to form a new government if the three parties could strike a deal.

Other developments are possible but unlikely. Should the Left-Greens decide to leave the coalition, they could be replaced by the Reform Party or the People’s Party, while any coalition without the Independence Party can only be a four-party or larger coalition.

Who will become the new prime-minister still remains to be seen—but if the ruling coalition remains in place, the current prime-minister and leader of the Left-Greens, Katrín Jakobsdóttir, stands a good chance of keeping her post: she is still the most popular politician in Iceland with a 40 per cent approval rate.

The 2021 Althingi election, with one of the lowest turnouts in history at 80.1%, has not produced a clear winner. The election results reflect a Europe-wide trend in which traditional “major” parties are losing support. The electorate is fragmenting and their votes are pulled by smaller new parties. The coronavirus pandemic has only reinforced this trend.

The 2021 campaign did not foreshadow a sensation. Although Iceland has not become the first European country with a women’s majority in parliament, these elections will certainly go down in history as a test of Icelanders’ trust to their own democracy.

From our partner RIAC

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EU-Balkan Summit: No Set Timeframe for Western Balkans Accession

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From left to right: Janez JANŠA (Prime Minister, Slovenia), Charles MICHEL (President of the European Council), Ursula VON DER LEYEN (President of the European Commission) Copyright: European Union

On October 6, Slovenia hosted a summit between the EU and the Western Balkans states. The EU-27 met with their counterparts (Albania, Bosnia-Herzegovina, Serbia, Montenegro, North Macedonia and Kosovo) in the sumptuous Renaissance setting of Brdo Castle, 30 kilometers north of the capital, Ljubljana. Despite calls from a minority of heads of state and government, there were no sign of a breakthrough on the sensitive issue of enlargement. The accession of these countries to the European Union is still not unanimous among the 27 EU member states.

During her final tour of the Balkans three weeks ago, German Chancellor Angela Merkel stated that the peninsula’s integration was of “geostrategic” importance. On the eve of the summit, Austrian Chancellor Sebastian Kurz backed Slovenia’s goal of integrating this zone’s countries into the EU by 2030.

However, the unanimity required to begin the hard negotiations is still a long way off, even for the most advanced countries in the accession process, Albania and North Macedonia. Bulgaria, which is already a member of the EU, is opposing North Macedonia’s admission due to linguistic and cultural differences. Since Yugoslavia’s demise, Sofia has rejected the concept of Macedonian language, insisting that it is a Bulgarian dialect, and has condemned the artificial construction of a distinct national identity.

Other countries’ reluctance to join quickly is of a different nature. France and the Netherlands believe that previous enlargements (Bulgaria and Romania in 2007) have resulted in changes that must first be digested before the next round of enlargement. The EU-27 also demand that all necessary prior guarantees be provided regarding the independence of the judiciary and the fight against corruption in these countries. Despite the fact that press freedom is a requirement for membership, the NGO Reporters Without Borders (RSF) urged the EU to make “support for investigative and professional journalism” a key issue at the summit.”

While the EU-27 have not met since June, the topic of Western Balkans integration is competing with other top priorities in the run-up to France’s presidency of the EU in the first half of 2022. On the eve of the summit, a working dinner will be held, the President of the European Council, Charles Michel, called for “a strategic discussion on the role of the Union on the international scene” in his letter of invitation to the EU-Balkans Summit, citing “recent developments in Afghanistan,” the announcement of the AUKUS pact between the United States, Australia, and the United Kingdom, which has enraged Paris.

The Western Balkans remain the focal point of an international game of influence in which the Europeans seek to maintain their dominance. As a result, the importance of reaffirming a “European perspective” at the summit was not an overstatement. Faced with the more frequent incursion of China, Russia, and Turkey in that European region, the EU has pledged a 30 billion euro Economic and Investment Plan for 2021-2027, as well as increased cooperation, particularly to deal with the aftermath of the Covid-19 pandemic.

Opening the borders, however, is out of the question. In the absence of progress on this issue, Albania, North Macedonia, and Serbia have decided to establish their own zone of free movement (The Balkans are Open”) beginning January 1, 2023. “We are starting today to do in the region what we will do tomorrow in the EU,” said Albanian Prime Minister Edi Rama when the agreement was signed last July.

This initiative, launched in 2019 under the name “Mini-Schengen” and based on a 1990s idea, does not have the support of the entire peninsular region, which remains deeply divided over this project. While Bosnia and Herzegovina and Montenegro are not refusing to be a part of it and are open to discussions, the Prime Minister of Kosovo, Albin Kurti, who took office in 2020, for his part accuses Serbia of relying on this project to recreate “a fourth Yugoslavia”

Tensions between Balkan countries continue to be an impediment to European integration. The issue of movement between Kosovo and Serbia has been a source of concern since the end of September. Two weeks of escalation followed Kosovo’s decision to prohibit cars with Serbian license plates from entering its territory, in response to Serbia’s long-standing prohibition on allowing vehicles to pass in the opposite direction.

In response to the mobilization of Kosovar police to block the road, Serbs in Kosovo blocked roads to their towns and villages, and Serbia deployed tanks and the air force near the border. On Sunday, October 3, the conflict seemed to be over, and the roads were reopened. However, the tone had been set three days before the EU-Balkans summit.

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German Election: Ramifications for the US Foreign Policy

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Image source: twitter @OlafScholz

In the recent German election, foreign policy was scarcely an issue. But Germany is an important element in the US foreign policy. There is a number of cases where Germany and the US can cooperate, but all of these dynamics are going to change very soon.

The Germans’ strategic culture makes it hard to be aligned perfectly with the US and disagreements can easily damage the relations. After the tension between the two countries over the Iraq war, in 2003, Henry Kissinger said that he could not imagine the relations between Germany and the US could be aggravated so quickly, so easily, which might end up being the “permanent temptation of German politics”. For a long time, the US used to provide security for Germany during the Cold War and beyond, so, several generations are used to take peace for granted. But recently, there is a growing demand on them to carry more burden, not just for their own security, but for international peace and stability. This demand was not well-received in Berlin.

Then, the environment around Germany changed and new threats loomed up in front of them. The great powers’ competition became the main theme in international relations. Still, Germany was not and is not ready for shouldering more responsibility. Politicians know this very well. Ursula von der Leyen, who was German defense minister, asked terms like “nuclear weapons” and “deterrence” be removed from her speeches.

Although on paper, all major parties appreciate the importance of Germany’s relations with the US, the Greens and SPD ask for a reset in the relations. The Greens insist on the European way in transatlantic relations and SPD seeks more multilateralism. Therefore, alignment may be harder to maintain in the future. However, If the tensions between the US and China heat up to melting degrees, then external pressure can overrule the internal pressure and Germany may accede to its transatlantic partners, just like when Helmut Schmid let NATO install medium-range nuclear missiles in Europe after the Soviet Union attacked Afghanistan and the Cold War heated up.

According to the election results, now three coalitions are possible: grand coalition with CDU/CSU and SPD, traffic lights coalition with SPD, FDP, and Greens, Jamaica coalition with CDU/CSU, FDP, and Greens. Jamaica coalition will more likely form the most favorable government for the US because it has both CDU and FDP, and traffic lights will be the least favorite as it has SPD. The grand coalition can maintain the status quo at best, because contrary to the current government, SPD will dominate CDU.

To understand nuances, we need to go over security issues to see how these coalitions will react to them. As far as Russia is concerned, none of them will recognize the annexation of Crimea and they all support related sanctions. However, if tensions heat up, any coalition government with SPD will be less likely assertive. On the other hand, as the Greens stress the importance of European values like democracy and human rights, they tend to be more assertive if the US formulates its foreign policy by these common values and describe US-China rivalry as a clash between democracy and authoritarianism. Moreover, the Greens disapprove of the Nordstream project, of course not for its geopolitics. FDP has also sided against it for a different reason. So, the US must follow closely the negotiations which have already started between anti-Russian smaller parties versus major parties.

For relations with China, pro-business FDP is less assertive. They are seeking for developing EU-China relations and deepening economic ties and civil society relations. While CDU/CSU and Greens see China as a competitor, partner, and systemic rival, SPD and FDP have still hopes that they can bring change through the exchange. Thus, the US might have bigger problems with the traffic lights coalition than the Jamaica coalition in this regard.

As for NATO and its 2 percent of GDP, the division is wider. CDU/CSU and FDP are the only parties who support it. So, in the next government, it might be harder to persuade them to pay more. Finally, for nuclear participation, the situation is the same. CDU/CSU is the only party that argues for it. This makes it an alarming situation because the next government has to decide on replacing Germany’s tornados until 2024, otherwise Germany will drop out of the NATO nuclear participation.

The below table gives a brief review of these three coalitions. 1 indicates the lowest level of favoritism and 3 indicates the highest level of favoritism. As it shows, the most anti-Russia coalition is Jamaica, while the most anti-China coalition is Trafic light. Meanwhile, Grand Coalition is the most pro-NATO coalition. If the US adopts a more normative foreign policy against China and Russia, then the Greens and FDP will be more assertive in their anti-Russian and anti-Chinese policies and Germany will align more firmly with the US if traffic light or Jamaica coalition rise to power.

Issues CoalitionsTrafic LightGrand CoalitionJamaica
Russia213 
China312 
NATO132 

1 indicates the lowest level of favoritism. 3 indicates the highest level of favoritism.

In conclusion, this election should not make Americans any happier. The US has already been frustrated with the current government led by Angela Merkel who gave Germany’s trade with China the first priority, and now that the left-wing will have more say in any imaginable coalition in the future, the Americans should become less pleased. But, still, there are hopes that Germany can be a partner for the US in great power competition if the US could articulate its foreign policy with common values, like democracy and human rights. More normative foreign policy can make a reliable partner out of Germany. Foreign policy rarely became a topic in this election, but observers should expect many ramifications for it.

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