The world without Merkel

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Under Angela Merkel, Germany came to be known as Europe's indispensable nation. Her successor will soon feel the weight of that responsibility. Merkel made her mark on the global stage, steering Europe's response to multiple crises over almost 16 years in office. Yet the campaign for Sunday's election that will determine her succession has been notable for the lack of international focus: little discussion of transatlantic relations, hardly a mention of China, barely a whisper of the European Union's future. The domestic navel gazing is all the more striking as the U.S. under President Joe Biden forges global alliances to further his administration's central goal of confronting China. As the world's No. 3 exporter, Germany has core interests at stake that demand political engagement to keep Europe's biggest economy humming. Of course, elections aren't won on foreign policy. Social Democratic front-runner Olaf Scholz and his conservative opponent Armin Laschet have seemed content to slug it out over digital infrastructure and fiscal matters. The global issue of climate change has only been discussed through a domestic prism. The Greens have a muscular "values based" foreign policy, but lead candidate Annalena Baerbock hasn't been asked about it in three televised debates. Even so, a majority of Europeans see a new cold war between the U.S. and China, and many look to Germany to define the bloc's interests on economic, financial and security matters, according to a new survey from the European Council on Foreign Relations. That trust in Berlin may be Merkel's enduring legacy. Whatever the election outcome, the next chancellor won't have the luxury of focusing simply on German concerns. — Alan Crawford

Olaf Scholz, Annalena Baerbock and Armin Laschet during the final televised debate on Sept. 19. Photographer: Sean Gallup/Getty Images Europe Click here to follow Bloomberg Politics on Twitter and tell us how we're doing or what we're missing at balancepower@bloomberg.net.

Global Headlines

Fresh outreach | Biden shifted his push to convince Democratic lawmakers to approve his proposed $3.5 trillion economic package into high gear yesterday with three separate meetings at the White House. The entire Democratic caucus in the Senate and all but three members in the House must reach agreement to move the president's agenda forward, with failure likely leaving his long-term economic plan in tatters. Stress test | Sunny Peninsula, a seaside development in the southern Chinese city of Guangzhou, was supposed to house 5,000 white-collar worker families. But the project with its half-finished apartment blocks now looks more like the set of a disaster movie, emblematic of the troubles at China Evergrande Group, until recently the world's largest property developer. Click here for our big read on Evergrande's debt crisis. Global investors remain on tenterhooks even after Evergrande said it resolved a domestic bond coupon, with the focus on a $83.5 million interest payment also due today on a five-year dollar note. China's central bank net-injected the most short-term liquidity in eight months into the financial system, with markets roiled by concerns over Evergrande. More than 1.5 million households in Britain are being forced to switch energy suppliers after two more retailers collapsed yesterday. The announcements follow a prediction made by Business Secretary Kwasi Kwarteng that more companies would be in trouble after natural gas and power prices surged to record highs. China's reach | The U.K. government is alerting people in Britain who were named in a Hong Kong national security case to avoid countries that have extradition treaties with the Chinese territory. As Kari Soo Lindberg reports, it underscores concerns that China might reach beyond its borders to prosecute people under the law that asserts global jurisdiction for cases involving terrorism, secession, subversion and collusion with foreign powers. China's ambassador to America says Beijing's political system exemplifies the ideals of former U.S. president Abraham Lincoln. Click here for more. Best of Bloomberg Opinion China Is Destined to Lose an Arms Race With the U.S.: Minxin Pei In Russia's Election, Tech Was a Big Loser: Leonid Bershidsky U.S. Debt Limit Constrains Nothing But Honesty: Ramesh Ponnuru Arctic boom | Oil and gas companies are being bankrolled by some of the biggest names in finance to tap the Arctic's vast natural wealth, even as warnings grow about the melting ice cap due to global warming. Banks provided more than $314 billion to expand the industry from 2016 to 2020, according to watchdog Reclaim Finance, raising concern that businesses are flouting their oft-touted green credentials. More than 150 nonprofit groups warned the EU must resist pressure from some members to put new gas-fired power stations in its green rule book if it's serious about fighting global warming. Taxing the rich | The former banker who pulled off an upset victory to become Ecuador's president has some bad news for wealthy friends at home: You're going to pay the bill for the pandemic. Speaking in an interview, Guillermo Lasso said he is confident his approval rating of 75% will suffer little from a planned overhaul of tax rates, capital market rules and labor regulations as higher levies will target only the top 3.5% of earners. Bloomberg TV and Radio air Balance of Power with David Westin weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online here or check out prior episodes and guest clips here. Guests today include Colombian President Ivan Duque and U.S. Senator Jon Ossoff, a Democrat from Georgia. What to Watch The Biden administration will today press companies involved in the semiconductor supply chain to be more transparent as the global chips shortage continues to wreak havoc across many industries. The U.K. government is facing a backlash over its refusal to recognize visitors as vaccinated unless they received their Covid-19 shots in a handful of select countries. South African President Cyril Ramaphosa accused developed countries of acting immorally by hoarding vaccines needed in poorer nations. Biden plans to meet in person with French President Emmanuel Macron in October, seeking to mend ties after a U.S. nuclear-powered submarine deal with Australia outraged Paris. A Florida legislator has proposed banning most abortions in the state and allowing lawsuits against doctors who violate it, mirroring a Texas law that instituted the strictest abortion restrictions in the U.S. And finally ... While climate scientists have warned for years about the wildfires and hurricanes now overwhelming many communities, new alarms are ringing about a related danger for the biggest part of the global debt market. Investors, academics, policymakers and regulators are questioning whether credit ratings — the scores that underpin much of the financial system — are factoring in risks that could trigger chaotic asset collapses and potentially set off a new global financial crisis. Firefighters attempt to protect a house near Meyers, California, on Aug. 31. Photographer: David Odisho/Bloomberg

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