ABU DHABI (dpa-AFX) - The focus is on closer partnership, investment, and natural gas: German Federal Minister for Economic Affairs Katherina Reiche is traveling in the Gulf region with an economic delegation. The CDU politician will be holding political talks in the United Arab Emirates and Qatar until Wednesday. "With this trip, we are deepening our cooperation and opening up new opportunities for the economies of both sides," said Reiche.
German partners
"In a world of increasing geopolitical tensions, Germany must actively shape its strategic partnerships," said the minister before her departure from Berlin. The United Arab Emirates and Qatar are important partners in the Middle East – "economically ambitious, technologically strong, and financially powerful." Partnerships in technology and raw materials should be deepened.
According to the ministry, both countries are key economic players in the region and important strategic trading partners for Germany. "We are sending a clear signal: Germany is once again focusing on economic rationality, reforms, and investment friendliness," said Reiche. However, there is also likely to be a political dimension in the Gulf region. Qatar plays an important mediating role in the conflict between Israel and the Islamist Hamas. Qatar has been criticized in the context of the 2022 World Cup, but also for human rights violations.
Energy
In Qatar, there is also likely to be a threat by Qatar to freeze or completely stop liquefied natural gas (LNG) exports to Europe because of the European supply chain directive. The planned EU directive would require companies to prevent negative impacts on human rights and the environment throughout the entire supply chain. According to the original plans, companies would have to develop and implement a plan on how they intend to contribute to achieving the climate protection goals of the Paris Climate Agreement – with heavy penalties for non-compliance.
However, the EU Parliament has approved a watering down of the supply chain law; there will no longer be an obligation to draw up climate plans. The Parliament is now entering into final negotiations with EU member states on the proposal.
According to the German Gas and Hydrogen Industry Association, LNG deliveries from Qatar to the EU accounted for around 10 percent of the total in the first half of this year. Referring to estimates by the International Energy Agency, it went on to say that by 2030, new liquefaction capacities will be created almost exclusively in the US and Qatar.
In addition, no Russian liquefied natural gas is expected to enter the EU from 2027 onwards. At the beginning of Russia's war of aggression against Ukraine in February 2022, Germany was still dependent on Russian gas and was desperately seeking alternatives. In March 2022, Reich's predecessor Robert Habeck (Green Party) traveled to Qatar and agreed on a long-term energy partnership.
Investments
Accompanying Reiche on his trip is former Commerzbank CEO Martin Blessing, Chancellor Friedrich Merz's (CDU) personal representative for investments. The German government's goal is to increase investment in Germany again.
The Emirates and Qatar have strong sovereign wealth funds that have already invested heavily in Germany – Blessing and Reiche are likely to send the signal that further investments are welcome. Take energy, for example: expanding the power grids is very expensive. The coalition leaders have announced a Germany fund – a paper also mentions a new energy infrastructure fund as one area. "Attractive financing and investment opportunities" should be created to enable urgently needed investments in energy grids and the expansion of renewable energies.
Covestro
The talks in the Emirates are also likely to focus on the planned billion-dollar takeover of the chemical company Covestro by the oil company Adnoc from the United Arab Emirates. The EU has approved the transaction subject to conditions. The German government's decision is still pending. The Ministry of Economics is also reviewing the deal. Reiche could also give the green light./hoe/DP/zb
