Stefan Theil

Stories by Stefan Theil

  • The End of Tolerance

    The world has long looked upon the Dutch as the very model of a modern, multicultural society. Open and liberal, the tiny seagoing nation that invented the globalized economy in the 1600s prided itself on a history of taking in all comers, be they Indonesian or Turkish, African or Chinese.How different things look today. Dutch borders have been virtually shut. New immigration is down to a trickle. The great cosmopolitan port city of Rotterdam just published a code of conduct requiring Dutch be spoken in public. Parliament recently legislated a countrywide ban on wearing the burqa in public. And listen to a prominent Dutch establishment figure describe the new Dutch Way with immigrants. "We demand a new social contract," says Jan Wolter Wabeke, High Court Judge in The Hague. "We no longer accept that people don't learn our language, we require that they send their daughters to school, and we demand they stop bringing in young brides from the desert and locking them up in third-floor...
  • The Empire Strikes Back

    No need to call in the Kremlinologists. Russia's latest messages to the West and its close neighbors are clear. First came the New Year's Day gas war, when Moscow cut gas supplies to Ukraine over a pricing dispute--and demonstrated to the world that it was ready and willing to use energy as a weapon. Then came an essay from Defense Minister Sergei Ivanov entitled "Russia Must Be Strong," full of nuclear swagger and warnings that foreign interference would not be tolerated in Russia's backyard. And now, as neighboring Belarus and Ukraine prepare for elections in March, Moscow is doing everything in its power to ensure that wayward former satellites return to its orbit.Delusions of empire? Clearly, after years of weakness, a resurgent Russia is striking back. "Russia is a very different place from the way we saw it just three or four years ago," says Katinka Barysch of London's Centre for European Reform. Its rulers believe they don't need to defer to anyone anymore, and the reason is...
  • The New Old Age

    The Japanese senior citizens who founded Jeeba knew they were making history when they coined their company motto: "Of the elderly, by the elderly and for the elderly." By the time the 25 founders met one another in the mid-1990s, at a series of business-networking events hosted by the government of southern Saga prefecture, many companies were making products for the elderly, the fastest-growing demographic market in Japan. But those goods were not made by the elderly. All the Jeeba founders were older than 60 and believed they had a special insight into the needs of older consumers. In 1997, they launched Jeeba (the name means "old man and old woman") to build senior-friendly bathtubs, toilets and hammock lifts to help the infirm into wheelchairs. They do not hire young people, and the oldest of their workers is 75. Annual sales are only $272,000, but senior director Kazuhiro Noda, 67, expects revenues to start growing soon, as the company is putting more money and resources into...
  • Periscope

    Back in September, 40-year-old Ayman Nour was busy mounting an electoral challenge to Egyptian President Hosni Mubarak. A liberal with little funding but a flair for the dramatic, Nour had the gumption to belittle Mubarak as an impotent old man afraid of his own people. That, however, may have been the beginning of his undoing. Nour won just 7.6 percent of the vote, and on Nov. 26 he will go on trial for forgery. He also faces an additional 12 charges dealing with alleged election violations, bribery and corruption, including insulting the president.In the intervening weeks Nour has also become the victim of a deeply personal campaign of slander. He has been depicted as an American stooge by political opponents, and the campaign has even been directed at Ayman's wife, Gameela Ismail, who is now a key adviser in his Ghad Party. (Ismail has also worked as a special correspondent for NEWSWEEK, but went on leave when she began working for her husband and his party.) In recent weeks Nour...
  • Close The Door

    At long last, Tony Blair actually played the role of European Union president. Hoping to prevent last week's gathering of EU leaders from turning into another verbal fistfight, he downgraded the meeting from an official summit to an "informal" confab. Two days of talks were cut back to one. All the while he kept his eye on the real prize: a historic deal to conclude the current Doha trade round, swapping cuts in European farm tariffs and subsidies for similar concessions by the United States....
  • The Price Of Power

    Angela Merkel will be the first woman to lead Germany since Empress Theophanu in A.D. 991. Yet what's greeted her unwieldy coalition of Christian Democrats and Social Democrats, to be painstakingly hammered out over the coming weeks? Nothing but skepticism. QUEEN WITHOUT POWER trumpeted a typical headline last week in Stern. "Chancellor walled in by a dungeon," wrote Wirtschaftswoche, a leading business weekly. Its editor, Stefan Baron, dubs Merkel a likely Fruhstuckskanzler --a "breakfast chancellor" who shows up to host morning meetings but has little real say.Such, pundits say, is the price of power. Those warnings go far beyond the compromises Merkel must make in negotiations with the SPD. Indeed, the new chancellor's real problem may be less her socialist rivals than more shadowy enemies within--CDU heavyweights whose full backing she has yet to win.First for the formal opposition. It's easy to see how Merkel might seem hemmed in. The SPD, barely outnumbered in Parliament at...
  • Rise Of The Left

    Politics Italian style? Normally, that's the last way anyone would describe the German political scene. But these days? It's apt. To speak of the Sept. 18 election results as "confusing" would--well, be a charitable understatement. Commentators have outdone themselves in coming up with synonyms for logjam and chaos. Some speak ominously of a "breakup" of the country's traditional political system. It's not just that neither the ruling Social Democrats nor the opposition Christian Democrats won a mandate to govern. The bigger problem is that the whole calculus of power politics has shifted, perhaps forever.Talks to put together a "grand coalition" between Chancellor Gerhard Schroeder's SPD and Angela Merkel's CDU were still going on late last week, with solid prospects for success. But that didn't stop politicians in both parties from speculating about all sorts of hitherto unthinkable constellations. Despite Schroeder's opposition, some members of his party won't rule out the SPD...
  • It's Decision Time

    For those old enough to remember, there was a distinct echo in last week's big TV debate. Looking her audience square in the eye, Angela Merkel posed a question made famous by Ronald Reagan way back in 1980. Are we Germans better off today than last year, or the years before? Are our futures brighter? "If you have your doubts," she concluded, "then vote for the Christian Democrats."It was more than Reaganesque rhetoric, delivered shortly before a pivotal election. Like Merkel herself, many Germans see their country at a political and economic watershed--very much like that which swept America's Republican Party to power 25 years ago. And like America of that era, Germany is stuck deep in an almost existential funk. A decade of close-to-zero growth and record unemployment has sapped its confidence. There's also a clash of competing visions, again as in Reagan's time. One promises to defend social gains seen to be in jeopardy--Germany's great welfare state, under assault by the tides...
  • Radical Reform: A Modest Proposal

    Filing one's taxes is always a pain, nowhere more than in Germany--home to the world's most byzantine tax code. German citizens have to abide by 118 tax laws, consider 96,000 regulations and choose among 185 different forms. They must distinguish between seven types of income, 69 sources of tax-free earnings and 419 categories of loopholes and write-offs. The average German spends 1,036 euros each year to do his taxes; demand sustains an army of 75,000 tax consultants and 70 percent of the entire world's output of tax literature. Generations of politicians have promised to tame this chaotic monster, only to end up "fixing" the problem with yet more regulations.That's why the most electrifying news coming out of the German election campaign so far has been the sudden rise of Paul Kirchhof. Recently nominated by Christian Democratic leader Angela Merkel as shadow Finance minister, the former constitutional-court judge has promised a radical new tax system if Merkel wins the...
  • CAN MERKEL MAKE IT?

    Gerhard Schroeder was at it again. "Take the military options off the table," he roared at a campaign rally in Hannover. "We've all seen they're no good!"Bashing George W. Bush worked the last time the German chancellor was locked in an uphill election battle, in 2002 on the eve of the Iraq war. So he was understandably tempted to try it again, this time hoping to ride to victory in next month's ballot by denouncing possible U.S. military action in Iran. And like last time, the salvo appeared to catch his opponent, now Angela Merkel, off guard. More than 80 percent of Germans support Schroeder's antiwar stance, she knew, and reject her own pro-U.S. foreign policy. What to do? Waffle, obviously. A spokesman lashed out at Schroeder and called for unity with Washington, while Merkel herself said she agreed with Schroeder.This election should have been a slam dunk for Merkel. Her opponent, after all, presides over record 12 percent unemployment, five straight years of close-to-zero...
  • POLITICALLY CORRECT

    They were hidden inside flowerpots, a sand-filled aquarium and a black handbag. Tiny skeletons of nine newborn babies, found by police recently in the east German village of Brieskow-Finkenheerd. The prime suspect: their mother, Sabine Hilschenz, 39, charged in the killings dating from 1988 through 1999. Police say the unemployed dental assistant admits she had "something to do" with the deaths--but adds she was too drunk each time to remember either the infants' births or the killings. Whenever she moved, she took the pots with her, using them to grow flowers and vegetables. She would sit by them and smoke a cigarette, she told investigators--because she "wanted to be near" her children.Almost as shocking as the crime itself was the environment in which it happened. At the apartment building where the woman lived--known as the Stasi Haus because most of the tenants once worked for the communist secret police--no one saw or heard anything amiss. Neither her husband (also ex-Stasi)...
  • GERMANY'S ODD COUPLE

    It ain't over till it's over, especially in this quirkiest of German election campaigns. That there is an election at all is strange enough: the surprise call for next month's national vote by embattled German Chancellor Gerhard Schroder amounted to a virtual resignation a full year before the end of his term. Now, the return to politics of two charismatic, populist leaders is sending even more tremors across Germany's political landscape--and may yet throw a wrench into the conservative opposition's plans to succeed Schroder after September.It's an odd couple that is upsetting German politics. The diminutive Gregor Gysi, a rhetorically gifted ex-communist dialectician, has returned from his private law practice to lead the election campaign for the successor party to East Germany's communists. Oskar (Red) Lafontaine, the rabble-rousing former chairman of the Social Democrats and Finance minister under Schroder, has quit the SPD in a huff. Last month, he installed himself at the...
  • THE NEXT PETROLEUM

    A couple of years ago, when the cost of oil started to soar, Joel Rosado didn't think twice. The owner of an air-taxi service in Mineiros, Brazil, with a fleet of 12 planes, he needed to do what he could to contain fuel costs--he spends 20 percent of his revenues each year on 300,000 or so liters of fuel. So he rang up aircraft-maker Embraer, put in an order for the latest-model single-propeller Ipanema plane and tanked up--with alcohol. Flying on ethanol (a form of alcohol) distilled from sugar cane slashed the fuel bill for his Ipanema by 40 percent, at no cost to performance. Now Rosado is buying another brand-new Ipanema and plans to convert his 11 other planes to alcohol, too. The only problem: Embraer, the world's first manufacturer of ethanol-fueled planes, now has so many customers that there's a two-year wait list to convert gasoline engines to alcohol. Embraer is now looking into converting the T25, a military-training turbojet, to alcohol. "At this rate," says Embraer...
  • THE GREENS ARE WILTING

    Twelve months ago Germany's Greens were at the peak of their power. With 13 percent support in polls--their highest ratings ever--they had become the party of choice for a broad, educated elite. Observers saw their handwriting all over the policies of the government they had formed with Chancellor Gerhard Schroder's Social Democrats in 1998: new mandates for renewable energy and recycling, an agreement to phase out nuclear power, a modern citizenship law that did away with ancient blood-based rules, even gay-partnership rights. Their leader, Foreign Minister Joschka Fischer, was easily the most popular politician in Germany.Just a year later, the Greens are floundering. In May elections in North Rhine-Westphalia, voters kicked them out of the last of five state governments where they once shared power. Fischer is under investigation in a scandal involving human trafficking from Eastern Europe--critics say he approved a controversial 2000 directive abolishing background checks on...
  • INTO THE WOODS

    Germans are getting used to a new kind of immigrant. In 1998, a pack of wolves crossed the shallow Neisse River on the Polish-German border. In the empty landscape of Eastern Saxony, speckled with abandoned strip mines and declining villages, the wolves found plenty of deer and rarely encountered humans. They multiplied so quickly that a second pack has since split off, colonizing a second-growth pine forest 30 kilometers further west. Soon, says local wildlife biologist Gesa Kluth, a third pack will likely form, possibly heading northward in the direction of Berlin.Wolves returning to the heart of Europe? A hundred years ago, a burgeoning, land-hungry population killed off the last of Germany's wolves. Today, it's the local humans whose numbers are under threat. Wolf-country villages like Boxberg and Weisswasser are emptying out, thanks to the region's ultralow birthrate and continued rural flight. Nearby Hoyerswerda is Germany's fastest-shrinking town, losing 25,000 of its 70,000...
  • A RADICAL CHANGE AGENT

    Her offense was wearing jeans and listening to Western music. As a gesture of protest, when her classmates sang the "Internationale"--the global socialist anthem--she sang it in English, not German or Russian. As it was, she was a Lutheran pastor's daughter and practicing Christian. In communist East Germany, that was enough for even a 12th-grade science whiz to get a visit from the dreaded Stasi, or secret police. Eventually she was barred from teaching, her chosen profession.Today there are no more bars to Angela Merkel's rise. The 50-year-old leader of Germany's conservative Christian Democrats is poised to replace Gerhard Schroeder as the country's chancellor in less than four months, if elections proceed as planned. Though his term isn't up until 2006, an embattled Schroeder called an early vote after his party, the left-wing Social Democrats, suffered crushing defeats in two regional elections. Germans are largely fed up with Schroeder's seven-year record: 12 percent...
  • IS IT DAS MADCHEN'S DAY?

    Angela Merkel's foes like to paint the Christian Democrats' leader as a neoliberal extremist who'll sacrifice Germany's welfare state to the free market. But even her supporters concede she is no fire-breather. The question really is whether Merkel possesses the force of character and political strength to push the economic reforms Germany needs.Whatever Merkel, 51, might lack in Thatcheresque zeal, she makes up for in candidness. If Chancellor Gerhard Schroeder is all personality and charisma, she is his antithesis: plain, almost boring on the stump--yet often refreshingly clear and direct. And much like Margaret Thatcher, her status as an outsider to German politics (and her own party) gives her the freedom to rethink a system in obvious need of change, says Dominik Geppert, a political scientist and author of a book in which he compared Merkel to the former British prime minister. As an East German physicist who came late to politics, he says, Merkel is a welcome addition to...
  • WHAT'S GOING RIGHT

    What do Chinese breweries, Brazilian water bottlers and Italian dairy cooperatives have in common? Krones AG. The German company controls a quarter of the world's market for state-of-the-art bottling equipment. It ships 82 percent of its production abroad; its order book is backlogged to the tune of 686 million euro. With revenues doubling since 1995, its 7,300 highly trained specialists in the Bavarian town of Neutraubling have grown used to working overtime.A rare success story in low-growth, high-cost Germany? Think again. For all the cliches of Germany as the sick man of Europe, thousands of world-beating companies like Krones have made Germany the unsung hero of globalization. Driven by strong demand for its machinery, cars and industrial components, Germany surged past the United States in 2003 to become the world's No. 1 exporter. Exports jumped another 10 percent last year to a record 730 billion euro--making Germany, along with China, the only leading country to raise its...
  • A TARNISHED MERCEDES

    These days auto giant DaimlerChrysler is a two-family house divided between function and dysfunction, with all the trouble on the side everyone thought was perfectly well adjusted. In the United States, former money pit Chrysler is hot. After years of red ink, including an incredible 5.3 billion euro loss in 2001, Chrysler is lean and healthy. As rivals Ford and GM lose market share, Chrysler has gained for six consecutive quarters, and earned more than 250 million euros from January to March. Last week it reported a sizzling 9 percent rise in April sales, led by popular new models like the 300 sedan and the Dodge Viper. While the rest of Detroit lives off the SUV, Chrysler is now the only member of the Big Three automakers that makes even one popular car in the U.S. market.Meanwhile, DaimlerChrysler's flagship German brand and erstwhile cash cow, Mercedes-Benz, is in deep and serious trouble. Sales are down. Worse, once standard-setting Mercedes now scores near the bottom in...
  • CAPITALISM? NEIN!

    Listen to some of Germany's most powerful politicians these days, and it's as if Karl Marx had risen from the grave. "The growing power of international capital" with its "unbridled greed for profit" represents nothing less than a 'threat to democracy'," the chairman of the ruling Social Democrats, Franz Muntefering, railed at a recent party conclave in Berlin. Days later Chancellor Gerhard Schroder himself thundered against the evils of an "unrestrained neo-liberal system." Other SPD leaders have warned of "predator capitalists" waging an "undeclared war" on Germany. The "asocial" and "faceless" foreign investors were descending on Germany "like swarms of locusts," Muntefering warned darkly."Schroder's rediscovery of Marxist rhetoric is more than a sign of political desperation. True, the SPD is turning up the heat ahead of a crucial May 22 election in North Rhine-Westphalia, Germany's most populous state and traditional socialist power base. With the opposition Christian Democrats...
  • A Pyrrhic Victory?

    The populist tabloid France Soir hailed a new national hero last week. HOW CHIRAC IS DEFENDING FRANCE blazed the headline to an article that presented the French president as a modern-day "Zorro"--battling not the evil governor of 19th-century Spanish California, but European Commission President Jose Manuel Barroso and his push for free-market reforms. After the European Union summit in Brussels on Thursday, le Zorro francais declared victory, having forced Barroso to water down a key proposal to advance Europe's future....
  • A PYRRHIC VICTORY?

    The populist tabloid France Soir hailed a new national hero last week. HOW CHIRAC IS DEFENDING FRANCE blazed the headline to an article that presented the French president as a modern-day "Zorro"--battling not the evil governor of 19th-century Spanish California, but European Commission President Jose Manuel Barroso and his push for free-market reforms. After the European Union summit in Brussels on Thursday, le Zorro francais declared victory, having forced Barroso to water down a key proposal to advance Europe's future....
  • The Barbarians Within

    Hatun Surucu's crime was that she wanted to be free. Forced by her family to marry her cousin at age 16, the Turkish-born Berliner had divorced her husband, gone back to school and begun dating other men. On Feb. 7, after getting a call from a relative to come out on the street, the vivacious 23-year-old was shot three times in the head in what police describe as "an execution-style killing." Three of her brothers, one of whom boasted to friends about the murder, are now in jail.Surucu's murder is only one of a series of high-profile "honor killings" sending shock waves through Europe. In Berlin since October, six Muslim women have been brutally killed by their husbands or brothers, who felt the women had besmirched the family honor. In London on Friday, the Metropolitan Police announced that 18 cases of reported "suicide" in the last two years had turned out to be honor killings; another 59 suspicious suicides are still under investigation. These cases, authorities say, are likely...
  • Fear and Loathing

    BRACE FOR THE DELUGE, the newsweekly Der Spiegel recently warned Germans. A wave of modern-day "serfs" is heading your way. Migrants from Poland and the Czech Republic--working for as little as 3 euro an hour, one third the standard wage--are coming to steal jobs from hardworking Germans.Far-fetched? You bet. But there's no denying that Der Spiegel has its finger on a nervous nation's pulse. Last week the official number of jobless Germans reached an astonishing 5,216,000, or 12.6 percent, deepening an already palpable national angst. A new survey by the Consumer Research Group in Nuremberg finds that 77 percent of Germans worry about unemployment--a European anxiety record. With joblessness on a scale not seen since the 1930s, newspapers are replete with fraught references to Weimar, and to the economic chaos that engendered Hitler.Overblown or not, Germany's state of fear is real--and so are its consequences. Worries about unemployment are a big part of the reason behind a three...
  • Real Estate: History In Reverse

    It's our dream house," says Tomasz Pawlik, clicking through the slides on his laptop. In a few days, the 33-year-old restaurant owner in Szczecin, Poland, expects to sign the contract that will make him the owner of a handsome two-story country house, built in 1917 for a Lutheran parson. What's unusual about this homeowner's bliss is that the house is in a different country. He and his girlfriend, a painter, will soon commute to Szczecin from the German village of Wetzenow, a 25-kilometer hop across what used to be a tightly guarded border.Before their countries joined the European Union, the Poles' and other Eastern Europeans' biggest fear was an invasion of rich Germans and other Westerners who would buy up land in the much poorer East. In Pawlik's corner of the Polish-German border, however, the invasion increasingly looks to be going the other way. There it's the German side that's poor and depressed, while Szczecin, a boomtown of 450,000, has seen incomes rise and prices...
  • OSTRICH POLITIK

    A black day for Germany. So trumpeted last week's newspaper headlines. According to the latest official numbers, German unemployment is the highest it has been since the Great Depression of the 1930s--more than 5 million jobless, or 12.1 percent of the work force. Factor in millions of people in state-funded training programs and those who've given up, and the real tally exceeds 20 percent. Is it time to panic yet?The grim news comes on the heels of an alarming report by the Chamber of Industry and Commerce, warning that German companies are outsourcing an accelerating number of research and engineering jobs to China and Eastern Europe. Fresh consumer data show that, in 2004, worried Germans cut back personal spending for the third year in a row, helping fuel a record pace of 60,000 business bankruptcies. As if adding insult to injury, even the country's favorite source of escapism--football--was mired in deepening scandal. At major-league sports clubs in several cities, police were...
  • GERMANY: Ostrich Politik

    A black day for Germany. So trumpeted last week's newspaper headlines. According to the latest official numbers, German unemployment is the highest it has been since the Great Depression of the 1930s--more than 5 million jobless, or 12.1 percent of the work force. Factor in millions of people in state-funded training programs and those who've given up, and the real tally exceeds 20 percent. Is it time to panic yet?The grim news comes on the heels of an alarming report by the Chamber of Industry and Commerce, warning that German companies are outsourcing an accelerating number of research and engineering jobs to China and Eastern Europe. Fresh consumer data show that, in 2004, worried Germans cut back personal spending for the third year in a row, helping fuel a record pace of 60,000 business bankruptcies. As if adding insult to injury, even the country's favorite source of escapism--football--was mired in deepening scandal. At major-league sports clubs in several cities, police were...
  • VW'S PICKUP MAN

    He won't start his job until February--and Wolfgang Bernhard has already earned his future employer, German auto giant Volkswagen, many times his salary. When, in October, VW announced the 44-year-old turnaround specialist would become the new No. 2 under CEO Bernd Pischetsrieder, investors celebrated by raising VW's market cap by 1 billion euro in a single day.Volkswagen obviously needs a shot in the arm. Only four years ago it was the hottest brand in America, enjoying bidding wars for its New Beetle and a cult following for its revamped Passat sedan, "the poor man's Audi." Now VW is barely breaking even, dragged down by high costs, poor sales and the aging of those once hot models. In North America persistent quality problems inspired headlines like EUROTRASH, to describe an article about a reliability report that ranked VW models near the bottom. In the United States alone, VW now loses 1 billion euro a year; if it weren't for the highly profitable Audi brand, the company would...
  • ALL THAT GLITTERS...

    In Germany, American investors have lately been snapping up just about everything. Last week New York-based Blackstone Group, one of the biggest buyout funds, paid 1.4 billion euros for 32,000 rented apartments from struggling Hamburg-based WCM Real Estate. In May, Texas Pacific bought Grohe, Europe's largest maker of bathroom faucets, for 1.1 billion euros. Last month Kohlberg Kravis Roberts--the corporate raiders of "Barbarians at the Gate" fame--took over Duales System Deutschland, a money-losing, nonprofit recycling monopoly, for 975 million euros. In KKR's eyes, it seems, German trash is gold.What's going on here? As German investors stay mainly on the sidelines, American "vulture" funds are snapping up more and more of the country's assets. In the first three quarters of 2004, they invested 12 billion euros, or 84 percent of all private equity. Ten of the 20 biggest corporate mergers and acquisitions this year involved U.S. financial investors. AMERICA IS REMODELING GERMANY...
  • Dangerous Liaisons

    Europeans are swept up by 'Sinophoria.' But this love affair is double-edged.
  • EUROPE: RUSSIAN RUMBLINGS

    European diplomats called it "the Polish path." In this rosy view, Russia would--like Poland and other post-communist countries before it--proceed down a slow but steady path of democratization and free-market reform. Never mind George W. Bush's talk of forging a special U.S.-Russian relationship; an upwardly mobile Russia would inevitably gravitate into the European Union's orbit, irresistibly attracted by the EU's geographical proximity, its 10 trillion euros market and common bonds of history and culture. One fine day, it seemed, Russia might even become a member.These days the view from EU capitals couldn't be more different. As Europe sees it, President Vladimir Putin is taking Russia down a very un-European track by sharply curtailing democratic rights. The economy and media are coming more and more under state control. The bloody military campaign in Chechnya--with some 150,000 civilians dead--is deeply offensive to soft-power Europe. The idea that Russia is becoming more and...
  • NOT MADE FOR WALKING

    There's a scene in Michael Moore's "Roger & Me," the 1989 documentary featuring GM factory closings, in which a laid-off worker in depressed Flint, Michigan, can't leave town. All the moving companies and truck rentals are booked for six months, it seems, as a daily trek of job-seekers set out for brighter prospects in California or Texas....