Reiche is scheduled to travel to Saudi Arabia from February 1 to 3 to expand economic relations

International News via Reuters:

German industry bosses including the CEOs of Siemens Energy and Thyssenkrupp will join Economy Minister Katherina Reiche on an upcoming trip to Saudi Arabia, highlighting a push by Europe’s biggest economy to further diversify its energy supply.

Reiche is scheduled to travel to Saudi Arabia from February 1 to 3 to expand economic relations, a spokesperson for her ministry said, only days after she highlighted the need for new alliances in light of rising geopolitical tensions.

The trip will focus on energy, a critical issue for Germany — Saudi Arabia’s most important economic partner in the European Union — which has suffered from soaring costs after losing access to cheap gas from Russia.

Christian Bruch, CEO of power equipment maker Siemens Energy, and Miguel Lopez, who leads industrial conglomerate Thyssenkrupp, will be part of the business delegation travelling with Reiche, the sources said.

Uniper boss Michael Lewis, EnBW CEO Georg Stamatelopoulos and Egbert Laege, in charge of SEFE Group, will also take part, they added.

Thyssenkrupp, EnBW and Sefe confirmed the participation of their CEOs.

Siemens Energy and Uniper declined to comment.

The ministry spokesperson said a number of memorandums of understanding would be signed on the trip, “focusing on energy projects, innovation, deep technology, artificial intelligence, and especially in the start-up sector”.

Reporting by Christoph Steitz; Additional reporting by Andreas Rinke; Editing by Hugh Lawson

U.N. Secretary-General Antonio Guterres has repeatedly spoken about the organisation’s worsening liquidity crisis but this is his starkest warning yet

International News via Reuters:

The U.N. chief has told member states that the organisation is at risk of “imminent financial collapse”, citing unpaid fees and a budget rule that forces the global body to return unspent money, a letter seen by Reuters on Friday showed.

U.N. Secretary-General Antonio Guterres has repeatedly spoken about the organisation’s worsening liquidity crisis but this is his starkest warning yet, and it comes as its main contributor the United States is retreating from multilateralism on numerous fronts.

“The crisis is deepening, threatening programme delivery and risking financial collapse. And the situation will deteriorate further in the near future,” Guterres wrote in a letter to ambassadors dated January 28.

The U.S. has slashed voluntary funding to U.N. agencies and refused to make mandatory payments to its regular and peacekeeping budgets.

U.S. President Donald Trump has described the U.N. as having “great potential” but said it is not fulfilling that, and he has launched a Board of Peace which some fear could undermine the older international body.

Founded in 1945, the U.N. has 193 member states and works to maintain international peace and security, promote human rights, foster social and economic development, and coordinate humanitarian aid.

In his letter, Guterres said “decisions not to honour assessed contributions that finance a significant share of the approved regular budget have now been formally announced.”

He did not say which state or states he was referring to, and a U.N. spokesperson was not immediately available for comment.

‘KAFKAESQUE CYCLE’

Under U.N. rules, contributions depend on the size of the economy of each member state. The U.S. accounts for 22% of the core budget followed by China with 20%.

But by the end of 2025 there was a record $1.57 billion in outstanding dues, Guterres said, without naming them.

“Either all Member States honour their obligations to pay in full and on time – or Member States must fundamentally overhaul our financial rules to prevent an imminent financial collapse,” he said.

Guterres launched a reform task force last year, known as UN80, which seeks to cut costs and improve efficiency. To that end, states agreed to cut the 2026 budget by around 7% to $3.45 billion.

Still, Guterres warned in the letter that the organisation could run out of cash by July.

One of the problems is a rule now seen as antiquated whereby the global body has to credit back hundreds of millions of dollars in unspent dues to states each year. 

“In other words, we are trapped in a Kafkaesque cycle expected to give back cash that does not exist,” said Guterres, referring to author Franz Kafka who wrote about oppressive bureaucratic processes.

Reporting by Emma Farge, Editing by Miranda Murray, Ludwig Burger and Hugh Lawson

Pierre Gramegna, managing director of the European Stability Mechanism, said the ESM could give credit lines for defence and would not demand stringent economic reform in return

International News via Reuters:

A European crisis fund with more than 430 billion euros ($514 billion) of firepower could lend money to countries for defence, the head of the European Stability Mechanism told Reuters, as the bloc scrambles to reinforce its military.

Pierre Gramegna, managing director of the European Stability Mechanism, said the ESM could give credit lines for defence and would not demand stringent economic reform in return, in part to dispel any stigma that might arise from asking the emergency euro zone fund for money.

“In these times of geopolitical turmoil, which have triggered higher expenditure, defence costs for all countries, we must use the full potential of the ESM,” said Gramenga.

He pointed to the use of credit lines for defence for countries in good financial health but whose budgets are stretched, in particular smaller euro zone states.

“We have instruments,” he said. “It is in the best interests of Europe … to use the full potential.”

“It is obvious that the relationship between Europe and the United States is becoming more and more bumpy.”

REPURPOSING DEBT CRISIS FUND

Any such financial support would be symbolically important, repurposing a fund set up at the height of the euro zone debt crisis to stave off the collapse of national economies, banks and shore up the currency.

U.S. President Donald Trump’s open hostility towards Europe is forcing its political leaders to scour for alternative means of defending the region against Russian aggression.

Gramegna’s remarks suggest a willingness to use the vast European reserve to reinforce euro zone countries, in particular smaller Baltic nations bordering Russia, although loans first need to be signed off by the euro zone nations backing the ESM.

Only countries in the euro zone could get the loans, excluding those who do not use the currency, such as Poland. The ESM makes no explicit mention of defence in its mission and any such shift would require the blessing of member states, including from militarily neutral countries like Austria, Cyprus, Malta or Ireland.

Europe’s attempts to boost its defences, four years after Russia’s full-scale invasion of Ukraine, have taken on greater urgency since Trump threatened trade tariffs on countries that rejected his claim on Greenland, a Danish territory.

Gramegna hinted at a potential role for the ESM, which was set up during the debt crisis to lend to countries such as Greece but has since become largely redundant.

“It is one of our instruments,” he said, referring to using so-called precautionary credit lines for defence. “It’s available. We need to rediscover the potential of that instrument.”

“You need to guarantee that this facility … has to be used for defence expenditure,” he said, adding that it would not come with draconian terms. “The whole goal here is to avoid that this type of tool is combined with restructuring of the economy.”

‘DEFENCE SUPPORT LINE’

His comments breathe fresh life into a “defence support line” earlier suggested by former Italian prime minister Enrico Letta to lend up to 2% of a country’s economic output at low interest rates for defence.

The proposal faces hurdles, however.

“When the euro area countries designed the ESM, they never intended it to be available for everyday use,” said Rebecca Christie of Brussels-based think tank Bruegel.

“Adding defence would be powerful. But Germany would need to make a complete about-face on how the fund can be used,” she said, referring to Europe’s largest economy.

Gramegna’s proposal mirrors an ESM crisis support scheme worth up to 240 billion euros set up during the COVID pandemic to help countries spend on healthcare. That ultimately remained unused.

The Baltic states of Lithuania, Estonia and Latvia could stand to benefit. They have almost quadrupled spending on defence since Russia invaded Ukraine to roughly 5% of their economic output, borrowing heavily to cover the bill.

Those countries, which border Russia and its close ally Belarus, have suffered an increasing number of sabotage attacks that law enforcement agencies blame on Russia.

They borrowed billions of euros from the EU’s oversubscribed SAFE loans scheme for defence projects, where the EU jointly borrows money on the market to lend it on at cost to EU governments for defence. ESM support would work similarly.

If set up like the pandemic support, the loans would have considerable weight across the EU. Estonia had a gross domestic product of roughly 40 billion euros in 2024 – 2% of that would be less than 1 billion euros.

Gramegna said countries could make “collective requests”, which would avoid any stigma attached to asking for assistance from the ESM. “The impetus has to come from the member countries,” he said.

Additional reporting by Andrius Sytas in Vilnius and Jan Strupczewski in Brussels; editing by Mark Heinrich