WSJ What’s News - German Vote Boosts Europe’s Centrists

Episode Date: February 24, 2025

A.M. Edition for Feb. 24. Markets signal relief after conservative Friedrich Merz’s victory. WSJ Berlin bureau chief Bertrand Benoit says Merz wants Europe to be more independent from the U.S. Plus, federal agencies push back on Elon Musk’s “What did you do last week?” email. And a bundle of Disney+, Hulu and Max seems to have a stronger hold on viewers than Netflix. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Want to own part of the company that makes your favorite burger? Now you can. With partial shares from TD Direct Investing, you can own less than one full share, so expensive stocks are within reach. Learn more at td.com slash partial shares. TD, ready for you. Federal workers get a new ultimatum from Elon Musk. Plus, Ukraine's allies try to convince President Trump to offer Kiev an American security guarantee

as the war enters its fourth year. And German elections deliver a win for the center-right alongside a historically strong showing by anti-establishment nationalists. The meta picture here is that the whole country is lodurched to the right, in a way much like the whole of Europe has. It's Monday, February 24th. I'm Luke Vargas for The Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today.

U.S. federal government employees are beginning the week with a weighty message in their inboxes. Reply by the end of the day with details about what you got done at work last week. We report that email came together in a matter of hours on Saturday after President Trump directed Elon Musk to get more aggressive in his government cost-cutting efforts, and by that evening the message had been sent to more than two million federal workers, with Musk adding on social media that quote, failure to respond will be taken as a resignation. Journal reporter Scott Patterson in Washington says that compared with other recent actions by Musk and his Department of Government Efficiency, this one is being met with more pushback from top administration officials, including Trump's recently approved FBI Director, Cash Patel.

Cash Patel, FBI Director, FBI Department of Government, FBI Department of Government The heads of multiple agencies, including the FBI, are telling their employees to hold off on responding to this request. Or maybe they might give them like a form email to use, because a lot of these employees do very sensitive and often secretive work. Another issue that some people pointed out is the agency that sent this request, the Office of Personnel Management, doesn't really have the management ability to tell employees and other agencies what to do. So that's created another level of confusion and pushback over this latest demand."

Musk and a representative for Doge didn't respond to a request for comment. An OPM spokeswoman declined to comment. Meanwhile, the U.S. military and Congress are processing a sweeping overhaul of top Pentagon leadership announced by President Trump on Friday, which included the firing of the military's highest-ranking officer, the admiral leading the Navy, and several other senior figures. Out are Chairman of the Joint Chiefs of Staff, Air Force General C.Q. Brown Jr., the military's highest-ranking black officer, and its top woman commander, Admiral Lisa Frank Heddy.

Trump gave no reason for replacing Brown, though his appointees have said diversity policies by the Biden administration had resulted in promoting unqualified officers. To replace Brown, Trump is nominating retired Air Force Lieutenant General Dan Kaine, a supporter of the president and strong critic of the top military leadership. Kaine will require Senate confirmation. Britain and France are working on a plan to deploy 30,000 European peacekeepers in Ukraine if Moscow and Kiev reach a ceasefire deal.

According to European officials, the plan wouldn't require the U.S. to deploy its own forces in Ukraine, something Washington has all but ruled out, but would seek to draw on U.S. military capabilities to protect the European troops in Ukraine if they were put in danger and deter Russia from violating any ceasefire. The proposal hinges on persuading President Trump to agree to the U.S. acting as what the British call a backstop to any peace deal. French President Emmanuel Macron is scheduled to meet with Trump to discuss Ukraine today with British Premier Keir Starmer following suit on Thursday.

The National Security Council and the British Embassy in Washington declined to comment. Meanwhile, Ukrainian President Vladimir Zelensky has been pressing for better terms to a mineral rights deal that the Trump administration has been pushing for, in which the U.S. would get preferential access to minerals such as titanium and lithium as payback for American aid. Zelensky said yesterday that any offer should include security guarantees and better financial terms, adding that the demand that Ukraine return $500 billion for aid provided during the war far outstripped the $100 billion that the U.S. had given. I agreed with Biden and agreed with the American Congress.

I'm grateful to Congress. Both parties were present and supported the grants. A grant is not a loan and we don't have to repay the debt." Trump administration officials this weekend urged Kiev to quickly accept the proposal already on the table. And the first phase of a fragile ceasefire deal between Israel and Hamas drew closer to completion over the weekend when six Israeli hostages, the last to be released until the next phase of the deal is negotiated, were handed over in ceremonies in which the men were forced to wave to crowds

and one kissed militants. Hundreds of Palestinian prisoners were also supposed to be released from Israeli custody on Saturday. However, Israel says it's temporarily withholding their release until Hamas stops staging what it called humiliating hostage handovers. Hamas says Israel's move violates the ceasefire. President Trump's Middle East envoy, Steve Wichoff, is heading to the region this week to try and hash out the next phase of the ceasefire. If agreed, it would lead to a permanent ceasefire and Hamas's release of its remaining hostages.

However, we report today that Israel is trying to push Hamas to extend the first phase of the ceasefire in a bid to put off discussing the hardest parts of a pact to end the war. Coming up, German stocks and bonds are ticking higher after weekend elections look set to usher in a business-friendly government. We'll recap the vote with our bureau chief in Berlin after the break. Let's turn now to Berlin to get some analysis on yesterday's German elections. The winner of that vote, conservative Friedrich Merz of the Christian Democratic Union, while current Chancellor Olaf Scholz's Social Democratic Party scored its worst election

result since the late 1800s. To put this all into context, I'm joined by the journals, Germany Bureau Chief Bertrand Benoit. Bertrand, for those of us with no knowledge of German politics, what should we know about Merz, his domestic politics, of course, but especially how he'll be expected to work with the rest of Europe and of course, the US. Bertrand Merz is an establishment conservative. He has a pretty middle of the road conservative agenda. But the twist now is that he has said that Europe would need to become more independent of the US. And that's of course related to the support that some people around Trump gave to the right-wing

AFD, which is a rival of the CDU party, Merz's party, during the campaign. For anyone listening, if Merz's CDU party sounds familiar, that's because that was Angela Merkel's party. So in some ways Bertrand, maybe German politics reverting back to some of the norms of recent decades and yet so much has changed, of course, namely with the rise of the Alternative for Germany party or AFD that had seen a real rise in popularity in recent years thanks to concern over high levels of immigration, a party that recently received the backing of Elon Musk.

The AFD last night secured almost 21% of the vote, the second highest vote total. What should we make of that? So the meta picture here is that the whole country is lurched to the right in a way much like the whole of Europe has. So it's not just the rise of the AFD. Mertz has pushed his party back to the right after Merkel pushed it to the center. And he's campaigned for a much more conservative agenda including on the economy and immigration. The AFD is aligned with the CDU on some issues, but it's also very, very different on other issues. It's called for the lifting of sanctions on Russia.

It's pretty Moscow friendly. It's also in favor of Germany leaving the European Union and abandoning the euro. And it's a little bit ambivalent about Germany's culture of Holocaust commemoration. The FDS called for Germany to stop emphasizing that part of its history which again sits very uncomfortably with the CDU. Finally Bertrand, it sounds like up next will be talks to form a new government, a process that's taken months in the past and could take that long again. However, markets are already seeming to breathe a sigh of relief here. German government bond yields are edging

higher today as is the euro. But beyond those early moves, what is the outlook here for the German economy under Merz? So I think the market reaction reflects the thinking that Merz's path to forming a government is probably a little easier than it might have been. We had a more split parliament. Mertz has called for tax cuts and lower regulation and generally a pro-business supply side economic program. The SPD, the likely coalition partner, wants the state to invest a lot more. And that could also boost growth. So the market is seeing an outcome that is likely to be favorable for them. Whether

all the policies can be agreed quickly, we'll have to see. Bertrand Benoit is The Wall Street Journal's Germany Bureau Chief. Bertrand, thank you so much. Thank you, Luc. And in other news that could move markets today, Disney and Warner Bros. Discovery's streaming bundle which offers Disney+, Hulu, and Max is retaining more customers than Netflix. According to new data from subscription analytics firm Antenna, about 80% of subscribers who signed up for the bundle between July and September were still paying for it three months later compared with 74% for Netflix. Representatives from the companies declined to comment.

And that's it for What's News for this Monday morning. Today's show was produced by Kate Bulevant and Daniel Bach, with supervising producer Christina Rocca, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.