Stefan Theil

Stories by Stefan Theil

  • Hiding Behind The Americans

    Germany was expected to play a big role in Europe's security. But its defense policy has gone AWOL.
  • In The Populist Corner

    Germany's elections signal a rise of the left, and a shift from anti-immigrant to economic populism.
  • The Factory Of Factories

    How Germany's nimble manufacturers are besting not only their Western rivals, but the Chinese, too.
  • The New German Zeitgeist

    Angela Merkel's agenda is all but finished. Germans now prefer "social justice." Whatever that means.
  • Calculating to A Fault

    Angela Merkel once promised to rescue Germany from its torpor. But the country has had a change of heart about her reforms—and so has she.
  • Teaching Entrepreneurship in the Arab World

    Mohamad Hodeib speaks passionately about global expansion, stock options and the long, Red Bull-fueled nights spent drawing up the business plan for B-Com, his half-year-old start-up company that makes clothes with witty slogans. It's not something you'd expect to hear from a 17-year-old high-school student from Deir al-Zahrani, Lebanon, a poor village in the Hizbullah-dominated south—nor, for that matter, anywhere else in the Arab world. Hodeib says he caught the business bug from a school project run by Injaz al-Arab, an organization that sends volunteers into schools to teach kids about entrepreneurship. His regular classes are too boring, Hodeib complains: "All we ever do is memorize facts for the exams."If the Middle East is to have any shot of making up for decades of past stagnation, it's going to need many more kids like Hodeib, eager to build new companies and create new jobs. That's the rationale behind a small but growing movement of educators and CEOs, Western aid...
  • Q&A: MIT Entrepreneur Expert Ken Morse

    Start-up guru Ken Morse has been spending one third of his time in the Middle East since 1999. As director of the Entrepreneurship Center at MIT, he's been deeply involved advising Arab leaders in how to jump-start high-tech entrepreneurship in the region. The goal: diversify Arab economies away from oil and public service, and create quality jobs for the youth. He is also helping some of the region's leading universities introduce entrepreneurship training into their curricula. He spoke with NEWSWEEK's Stefan Theil.  Excerpts: ...
  • The Club of Competitors

    If the reports are on target, Europe will grow faster than America in 2007—for the first time in six years. European Union countries created 2 million new jobs last year, cutting unemployment to its lowest since 1991. Better, growth is no longer confined to outliers like Britain, Spain or the Baltic mini-states. Europe's resurgence is driven by the behemoth at the continent's heart, Germany. After 15 years of malaise, the EU's traditional locomotive grew at almost 3 percent in 2006, roaring past such laggards as France and Italy. Years of restructuring and smart wage deals with the unions have made German manufacturers, especially exporters, über-competitive.The jury is still out over how much of this faster growth is temporary. But the process by which the German economy has shaped up is Exhibit A for what's going right in the EU these days. It's not a matter of any single smart policy or innovative wage deal. The key to Germany's broader revival is the way the EU has boosted...
  • Last Word: It's All About Attitude

    With the demand for microfinancing on the rise, and tech start-ups heading back to Wall Street, entrepreneurship is key when it comes to economic growth these days. But that wasn't always the case. When he accepted the 2006 Nobel Prize in Economics in Stockholm, Edmund Phelps was the first winner in decades to focus his speech on entrepreneurship, despite the crucial role that innovative, fast-growing companies play in job creation, technological progress and growth around the globe. Lately, the 74-year-old American economics professor has focused on what exactly drives certain economies to be innovative while others lag behind. NEWSWEEK's Berlin bureau chief Stefan Theil, currently on leave as a fellow with the German Marshall Fund of the United States in Washington, spoke with Phelps last week. Excerpts: ...
  • Time To Bust Up The Club

    On the face of it, he's a most unlikely free-marketeer. A card-carrying socialist, Thilo Sarrazin is Finance minister for the city of Berlin, whose government includes the successor party of the former East German communists. But bankrupt Berlin needs cash, and Sarrazin is determined to get it. So determined, in fact, that he's preparing to break one of Germany's longest-standing political and economic taboos--by selling off Landesbank Berlin, the city's public-owned bank, for some €8 billion.Ho-hum? Not in Germany. The move has sent a tremor through one of the coziest clubs in the land--the state-owned banks that control almost half the country's banking assets. Germany may be Europe's largest economy, home to some of the world's most successful companies, yet the basic structure of its banking system is unchanged since the 1800s--fragmented, inefficient, cosseted from competition. In Berlin's Landesbank sale, some see the coming of a whole new era, freeing up hidden wealth and...
  • Davos Special Report: 7 Ways To Save The World

    Forget the old cliché that conserving energy is a form of abstinence--riding bicycles, dimming the lights, lowering the thermostat and taking fewer showers. These days conservation is all about efficiency: getting the same--or better--results from just a fraction of the energy. When a slump in business travelers forced Ulrich Römer to cut costs at his family-owned Hotel am Stadtpark in Hilden, Germany, in 2002, he found that he didn't have to skimp on comfort for his guests. Instead, he replaced hundreds of the hotel's wasteful incandescent light bulbs with energy-saving compact fluorescent ones, getting the same light for 80 percent less power. He bought a state-of-the-art water boiler with a digitally controlled pump, and wrapped insulation around the pipes. Spending about €100,000 on these and other improvements, he slashed his €90,000 fuel and power bill by €60,000--a 60 percent return on investment, year after year after year. As a bonus, the hotel's lower energy needs have...
  • Coming In From The Cold

    What do German kids learn about the communist dictatorship that oppressed half their country for 44 years, chiefly through the instrument of the notorious Stasi, the ubiquitous secret police whose 265,000 agents and informants spied on citizens and relentlessly crushed all opposition to the regime?If high-school textbooks are any guide --nothing, or next to it. At least, that's what an astonishing study recently revealed. Of 81 current social-studies and history texts examined by Braunschweig University's Institute of Schoolbook Research, half don't even include East Germany at all. In all but a tiny handful of books, there's no mention of the Stasi's brutal methods, or its tens of thousands of victims. Instead, says study author Heike Mätzing, many books take pains to demonstrate that everyday life under communism wasn't all that different from life in the West. One such textbook, used since 2003 in the state of Brandenburg, describes the East German system as "democratic...
  • Better Workers, Please

    Everyone knows germany suffers from high unemployment. Those on the dole are desperate to get off, but no jobs are to be had. Right? Well, not so fast. Why has little-known Rücker, an auto and aerospace design firm in Wiesbaden, set up shop in Romania? Not because wage costs are lower, managers explain, but because it's the only place it can find the engineers it needs. Why does a world leader such as Bornemann, a manufacturer of offshore oil-drilling equipment near Hanover, have a list of 20 job openings it can't fill and a backlog of orders stretching well into 2007? "Forget bureaucracy, taxes or wage costs," says CEO Ingo Bretthauer. "Our biggest bottleneck for growth is the lack of qualified workers."Forget conventional wisdom, too. Germany is creating plenty of jobs, thank you--just not the right kind of workers. Competitive champions like Bornemann drive what German commentators are calling a "new economic miracle." They are the backbone of export-driven growth that lately has...
  • Atomic Phobia

    Amid a global revival in the nuclear-power industry, there remains one country dead set against it: Germany. A 2002 Nuclear Exit Law, shutting down the country's 27 reactors by 2021, will remain in place, Chancellor Angela Merkel has promised--despite having campaigned against the law during her 2005 election run. Says her Environment minister, Sigmar Gabriel, a Social Democrat: "Nuclear power is last century's technology."Never mind that nuclear power now accounts for 28 percent of Germany's electrical capacity, or that phasing out nuclear plants will mean greater dependence on gas imports from an increasingly menacing Russia. They have to go. In other nations, even many environmentalists are warming to nuclear power as an emissions-free weapon against climate change, particularly as improving technology greatly reduces the threat of meltdowns. Not so in Germany. "Logical arguments don't count," says Christian Wössmann, lobbyist for the German nuclear operators' association.Germany...
  • Bundeswehr Blues

    Never during its four-year deployment has the German Bundeswehr's contingent in Afghanistan gotten such a rash of coverage. Two weeks ago, the troops were at the center of the "Skulls Affair," after a tabloid published photographs from 2003 of soldiers posing with old skulls they'd found in a clay pit next to a former Soviet outpost. Then, last week, Germans were scandalized by revelations that a special-forces unit stationed in Oman had stenciled on the door of its jeep a palm tree and Iron Cross vaguely reminiscent of the Wehrmacht's famed Afrika Korps under Erwin (Desert Fox) Rommel. Just this weekend, Germans were shocked yet again by fresh allegations that a German soldier in 2002 put a gun to an Afghan child's head as a macabre "joke." Banner headlines called the incidents germany's abu ghraib. Commentators questioned the sense of Germany's Afghanistan mission. A survey released last week showed 73 percent of Germans want the Bundeswehr to cut back its foreign engagements...
  • Medical Meccas: It's What You Don't Eat

    Hippocrates prescribed it for all kinds of diseases. Moses and Jesus did it to get closer to God. Fasting has been practiced for thousands of years. Now modern medicine is beginning to appreciate its healing powers. Buchinger, on Germany's Lake Constance, and a handful of other clinics around the world, are beginning to offer fasting as one of many physical therapies, and medical tourists are flocking to take advantage.By fasting, doctors at Buchinger mean a minimalist diet of 300 calories per day--veggie broths and juices--for two weeks to several months, accompanied by blood tests, purges and other treatments. Director Françoise Wilhelmi di Toledo says many hard-to-treat conditions, from arthritis to allergies and various skin disorders, benefit from the metabolic switch that takes place when the body starts living off its own reserves. Of the 2,000 guests who come to fast each year (half from southern Europe, America and the Middle East), about one third arrive with serious...
  • Companies: Cultural Confusion

    When they first entered China, many Western companies made costly mistakes. Not knowing the ropes, they underestimated the complexity of operating in such a huge domestic market, were blissfully unaware of the nuances of Mandarin bureaucracy and flew in Western bosses often accused of arrogance.What goes around comes around--and this time it's the Chinese who are getting burned. Now that they've begun gobbling up Western companies, it turns out they haven't learned much from others' mistakes. "Chinese companies investing in the West are not the turbocapitalists everyone expects them to be," says Wang Wei, M&A consultant with Deloitte & Touche in Düsseldorf. They often arrive unprepared, overpay for acquisitions, fail to do their due diligence and aren't sure how their new Western holdings fit into their global strategies. The result: a recent series of nasty corporate disasters.Exhibit A may be BenQ, the Taiwanese cell-phone maker that last week announced it would shut the...
  • Poor But Sexy

    Berlin's coolest new club, Kubik, hides behind an unmarked gate across from a crumbling house full of squatters in a derelict downtown lot on the river Spree. It's built entirely from refashioned industrial containers emanating a translucent green light. If they seem to be almost alive, it's no accident; thanks to an edgy software interface, they pulsate to DJ Bobby Fröhlich's smooth post-techno beats. Amid the occasional sweet scent of cannabis, crowds of twentysomethings party until dawn. Sic transit Gloria Mundi . This weekend the cubes will be taken down and, poof, Kubik will be no more.Quirky, creative and outrageously cheap--the cover charge is but a single euro, and beers cost €2--Kubik is a perfect metaphor for the new Berlin. Remember all that post-unification speculation that the city, as a rising Germany's new capital, would metamorphose from a gritty outpost of the cold war into yet another homogenized, prosperous Eurotropolis? Forget it. The post-unity boom has fizzled-...
  • Beyond Babies

    At the fashionable Da Capo Cafe on bustling Kolonaki Square in downtown Athens, Greek professionals in their 30s and early 40s luxuriate over iced cappuccinos. Their favorite topic of conversation is, of course, relationships: men's reluctance to commit, women's independence, and when to have children--or, increasingly, whether to have them at all. "With the years passing my chances of having a child go down," says Eirini Petropoulou, a 37-year-old administrative assistant at the Associated Press news agency. "But I won't marry anyone just to have a child." She loves her work and gets her social sustenance from her parea, or close-knit group of like-minded friends, who increasingly play the role of family for young Greeks. "If at 45 I'm still childless, I'll consider having a child on my own," she says. But it's not as if her sense of personal fulfillment depends on it....
  • On the Baltic Beaches

    Ludorf Manor, in the former East Germany, was a wreck when Manfred Achtenhagen bought it in 1998. Built in 1698 by Baron von Knuth, it had been plundered and expropriated as "class-enemy property" by the invading Soviet Army in 1945 and then neglected during half a century of communism. But two years and €2.5 million later, the 30-room palace has been reborn as a stylish country hotel, an hour and a half north of Berlin. Bookings are up as German, Swiss and Swedish tourists discover the vast unpopulated landscape of lakes and nature reserves nearby.For Westerners, this was long terra incognita, hidden behind the Iron Curtain. When the borders opened in 1989, visitors largely stayed away. Hotels were lousy, roads poor and the food largely inedible. Restitution wrangles and other post-communist legal hassles all but paralyzed the housing market. But over the past decade, all that's changed--most visibly along the newly discovered Baltic coast.On the German islands of Rügen and Usedom,...
  • Phi Beta Capitalism

    What do Google, Yahoo and Sun Microsystems have in common? Like hundreds of Silicon Valley firms, they all trace their roots to Stanford University. The wealth, jobs and economic dynamism thus created have not been lost on wanna-be Stanfords around the world.From Sweden to Singapore, universities and governments are outdoing each other to foster student and faculty entrepreneurship. They've been spurred by recent reports from the OECD and others detailing the boost universities can give to economic growth. Singapore last year announced plans to spend some $7 billion by 2010 to finance biomedical research and university spinoffs. In Britain, a national campaign has raised the number of university spinoffs and start-ups from 430 in 2000 to 787 in 2004, the most recent year for which numbers are available. In Sweden, universities such as the Karolinska Institute now operate venture funds that seed campus start-ups. European business schools, in turn, have been rejiggering courses to...
  • With Rooms to Grow

    As education turns into an increasingly competitive global business, universities are using design more than ever as a way to set themselves apart. They're employing star architects like Americans Frank Gehry and Robert Venturi--or Britain's Norman Foster, whose stunning new library for the campus of Berlin's Free University has drawn so many design buffs that taking pictures inside is no longer allowed. Others, like Swarthmore College near Philadelphia, have caught attention with ecofriendly "green" buildings that use recycled materials and cut energy use to a minimum. More and more colleges are also rethinking how to redesign their teaching spaces to make better use of technology for professors and students alike--and to accommodate the widespread shift from traditional lectures to interactive, team-based learning practices. On these pages, NEWSWEEK presents some of the most interesting examples of recent university architecture.
  • Capitalist Manifesto

    Europe could use more people like Ehssan Dariani. The 26-year-old entrepreneur runs a hot Internet start-up called studiVZ--Europe's fastest-growing social network for university students. Since setting up in a cheap Berlin loft only last fall, he's already hired 25 people. Yet when Dariani looks back at his high-school days, a decade ago in the west German city of Kassel, he remembers his teachers warning against exactly what he's doing. "They taught us the market economy was a dangerous wilderness full of risk and bankruptcy," Dariani says. "We never learned how prices affect supply and demand, only about evil managers and unjust wages." If he'd listened to his teachers, he'd be among the vast majority of German students who dream of becoming civil servants or fitting into the comfortable hierarchy of a traditional corporation. Instead he set out and created some desperately needed jobs.Ask any European what he learned at school about how the economy works, and you'll likely hear...
  • Philanthropy: A Man and His Money

    The billionaire founder of SAP, Hasso Plattner, is a rare species in Germany. Taking a cue from his software buddies in Palo Alto, California, where he lives part time, he's put his money where his mouth is--€230 million, in fact. That's what he ponied up in 1999 to create an elite engineering institute for the University of Potsdam, complete with a nearby business incubator. Today the Hasso Plattner Institute is renowned for its first-rate IT designers and has already spun off some promising start-ups. "I didn't want to have to ask myself one day, 'Why didn't you do anything?' " he says.By doing his bit, Plattner has become the poster boy for one of Germany's most heartening trends. More and more Germans have pondered their country's future beyond the nanny state--and decided to get involved. From Bavaria to Berlin, volunteerism is surging. Citizens' groups have taken over public services such as libraries and swimming pools from bankrupt local governments. After years of watching...
  • The New Jungles

    A walk across the abandoned railyard in Berlin's Schöneberg district gives new meaning to the words "urban jungle." Between a noisy commuter train line on one side and apartment blocks on the other, a carpet of rare flowers with names like ladies' fingers and queen-devil hawkweed covers railroad ties and warehouse ruins. All sorts of endangered butterflies, spiders and bumblebees thrive, as does Europe's northernmost breeding colony of praying mantises. Goshawks and kestrels spy for prey overhead.Nature has, of course, found its niches in towns and cities ever since humans built them. Pigeons and cockroaches have settled down with mankind. Escaped pets and their offspring, like the famed wild parrots of San Francisco's Telegraph Hill, have added an exotic touch to the urban fauna. Yet for some reason many of us continue to see cities as barren or worse, spreading biological destruction wherever they sprawl.As they take a closer look, however, biologists in the nascent science of ...
  • Germany: See No Evil, Say No Evil

    Germany's official motto for this summer's football World Cup is "The World Hosted by Friends." And increasingly, some Germans fear it might promise more than they can deliver. As the country gears up to present its best face to more than a million foreign visitors, a string of recent attacks on black and Turkish immigrants in the formerly communist East has reminded the public of an ugly, festering problem.In April, two attackers allegedly shouting racist epithets beat an Ethiopian-born professor into a coma in Potsdam. In May, assailants beat a Turkish-German parliamentarian in the face and head with a bottle in the eastern outskirts of Berlin. Last week, a new government report on extremism confirmed that these were no isolated cases: violent right-wing hate crimes were up 25 percent in 2005--from 832 the year before, to 1,034--and continued to be a particular scourge of the east. Rural Saxony-Anhalt and Brandenburg, surrounding Berlin, showed a per capita rate of xenophobic...
  • March of the Populists

    A populist rebellion against globalization is going global. This self-destructive form of economic nationalism started along the Caracas-Moscow axis, as Presidents Vladimir Putin of Russia and Hugo Chávez of Venezuela trumpeted the classic populist promise: to steer wealth from the rich and the foreign to the poor and the homegrown. Increasingly, though, the same politics of fear is taking hold outside of troubled and newly flush oil states. What French President Dominique de Villepin calls "economic patriotism" has become acceptable from Tokyo to Washington. Multibillion-dollar campaigns to guarantee jobs or incomes for those left behind by national booms are now taking hold in the biggest markets of Asia. In Western Europe, a "populist zeitgeist" is dawning, with long-term consequences, says Antwerp University political scientist Cas Mudde. "Populism will be permanent. With so much insecurity, resentment will express itself much more readily."...
  • Don't Worry ... Be Happy!

    The Italian paparazzi had a field day. Staking out German Chancellor Angela Merkel during her Easter vacation on the island of Ischia, one of them caught her bare-bottomed as she changed into her bathing suit. In a flash, the British newspaper The Sun bought the buttocks and spread them across page two--and just as quickly, an indignant German press rushed to save Merkel's honor. The tabloid Bild, usually the lead dog in a pack of media Rottweilers, clothed the chancellor with a chaste red bar. "You whisky-bloated butt-faces! Our chancellor has a doctorate in physics and can explain Einstein!" gushed the paper in Merkel's defense.If the German media are predictably thin-skinned when it comes to British barbs, it's Bild's glowing adulation that more tellingly reveals the national mood. Long after the pundits expected the new government's honeymoon to end, Germans are still aglow over their not-so-new-anymore chancellor. Merkel's approval rating is still at 70 percent five months...
  • Rebuilding the Past

    A 14-hectare site, just off Unter den Linden, Berlin's old imperial boulevard, has long been the city's most fought-over chunk of real estate. There, after 15 years of heated debate, demolition began last month on the Palace of the Republic, the empty 1970s-era home of communist East Germany's rubber-stamp "Parliament." Once upon a time, the plot was occupied by an even vaster edifice: the 1,200-room Stadtschloss, the 12th-century palace of Prussian kings and German kaisers, damaged in World War II and razed by the communists in 1950. Now, the Bundestag has decreed, a replica of the old imperial palace will be rebuilt on the same spot, with a historically accurate façade and a mostly modern interior.Berlin is not alone in catching reconstruction fever. Projects to rebuild prominent landmarks lost to Allied bombs and postwar wrecking balls are underway in Frankfurt, Potsdam and a host of other German cities. Destroyed monuments, of course, have been reconstructed as long as there...
  • Designed by Human Hands

    What do the Austrian alps, Philippine rice terraces and India's Kerala Backwaters have in common? True, they are some of the world's most beautiful--and ecologically diverse--landscapes. But they're also the product of centuries, if not millennia, of human care and cultivation. Now a triple whammy of shifting demographics, rural development and globalization is threatening some of the most stunning man-made environments.Take the Cordillera mountain chain on the Philippine island of Luzon, where, for a thousand years, villagers have farmed rice in a vast network of ancient water-filled terraces. Hugging steep hillsides at impossible angles, they're fed by a complex system of drains and canals. Not just a masterpiece of premodern engineering, they're also a unique man-made ecosystem supporting fish, birds and amphibians, says Mechtild Rössler, head of UNESCO's Cultural Landscapes program.Now those rice terraces are under threat. Thanks to increasing trade, rice imported from Thailand...