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Germany’s immigrants rise to fore of start-up scene



It was refugee customers at his pharmacy in Wuppertal, Germany that gave Ribal Dib his inspiration. Where, they asked, could they find the ingredients for a beloved Middle Eastern dish? A favourite Syrian cheese?

A year after almost 1m people, mostly Syrians fleeing war, reached Germany in 2015, Mr Dib realised the craving for a taste of home was a start-up opportunity.

 “A market in Germany was born overnight,” said Mr Dib, who fled his hometown of Damascus after his pharmacy was destroyed by shelling. “I could bring the homeland to them all, with the press of a button.”

Three years on, his online Middle Eastern food marketplace Mozzaik attracts 5m-6m site visitors a year and serves 180,000 regular customers. The entrepreneur is part of a promising German trend: immigrants are behind 26 per cent of the country’s start-ups — four percentage points higher than their share of the population, a study shows.

Ribal Dib’s Middle Eastern food marketplace Mozzaik attracts 5m-6m site visitors a year and serves 180,000 regular customers © Mozzaik

According to the research by development bank KfW, immigrants have also established Germany’s most innovative and growth-oriented ventures. These range from Mr Dib’s online market to popular new fintechs such as Raisin, which allows customers to deposit money to banks across Europe and make higher returns, and deep-tech start-ups such as peaq, a decentralised internet platform with a Maltese co-founder.

American start-up hubs such as Silicon Valley were once especially known for immigrant participation — US studies showed more than half of Silicon Valley companies started between 1995 and 2005 were founded by immigrants. But a report by Kaufmann Foundation pointed to an 8.5 per cent decline in numbers since 2005, presenting what some German entrepreneurs argue is an opportunity for their country of 21.2m immigrants to capitalise on.

“The United Kingdom and US are underutilising their opportunity now, and I think Germany has a huge chance of making a real success out of its immigrant population,” said Tamaz Georgadze, a co-founder of Raisin, which has raised €200m in investment.

Germany also has among the worst social mobility rates in OECD countries, which hits immigrants especially hard © Carsten Koall/Getty

German interest in immigrant success stories has grown since BioNTech, in partnership with US pharmaceutical company Pfizer, announced this month it was set to be one of the first companies to bring a coronavirus vaccine to the market. Glowing articles have highlighted the Turkish roots of Ugur Sahin and Ozlem Tureci, the couple who founded the company. Social media circulated grainy childhood photos of Mr Sahin’s family, who came to Germany as Gastarbeiter, or guest workers.

But behind the high-profile achievements the picture is more complicated.

Strong immigrant representation in start-ups is a reflection of both good and bad aspects of outsiders’ experience in Germany, often linked to difficulties in finding traditional employment.

Fintech Raisin allows customers to deposit money to banks across Europe and make higher returns © picture alliance / NurPhoto

Mr Georgadze, who left his native Georgia for Germany at the age of 16, might have sought a legal career, but he would have no chance of becoming a judge because he was not yet a German citizen. He worked at consulting firm McKinsey for ten years before founding Raisin, and initially struggled to operate within the established business community.

“My last name was already a barrier some people were reluctant to overcome, because it was too complicated, and obviously I was an outsider,” he said, noting that many generations-old German companies have established networks, which can be hard for foreigners to break into.

Immigrants also struggle with the language, and most of all with Germany’s labyrinthine bureaucracy, which can make it tough to transfer foreign degrees — another factor pushing some towards entrepreneurship.

Start-ups by immigrants in Germany. Chart showing percentage of those contributing to R&D activities, growth-orientated, digital andinternet-based start-ups, 2019

Paul Wolter, of the German Startups Association, said immigrant representation in German start-ups was still too low compared with other countries. Part of this reflects general barriers, like hefty tax regulations and red tape in founding companies, which are still so challenging that start-up hub Berlin created an office to help companies trying to bring in non-European employees.

Germany also has among the worst social mobility rates in OECD countries, which hits immigrants especially hard. “This is a poison for the economics of the country, because when you have less social mobility, you have less innovation,” Mr Wolter said.

But immigrants can also be more tolerant of risk than native-born citizens, having often made sacrifices to leave their homes.

Mr Dib was warned by a German consultant his plan had a 75 per cent chance of failure. He focused on the potential: “There are 27m Arabs and Muslims living in Europe. This is a huge sector without any big player directly targeting them all.”

Immigrants are crucial for the opening up broader economic opportunities in Germany, KfW’s chief economist, Fritzi Köhler-Geib, told the Financial Times in an email: “Society as a whole benefits from migrant entrepreneurship, because it reduces inequality.”

Mr Dib’s venture now employs dozens of Arab refugees, as well as Germans, while Mr Georgadze has a 350-strong team of Germans and immigrants from around the world.

Foreign entrepreneurs sometimes struggle to gain interest from German investors, who gravitate to entrepreneurs with similar backgrounds, Mr Wolter said. It is a problem for female entrepreneurs too, and his organisation is pushing investors to pledge more diversity.

Other immigrant founders say their main challenge has more to do with the traditional cautiousness of Germany’s small venture capital scene. They are still sceptical of projects focusing on growth before revenues — a necessity for the deep tech start-up peaq, which creates decentralised platforms for the Internet of Things and aspires to become a German tech unicorn.

Maltese co-founder Max Thake is still confident that his decision to leave home, drop out of university, and move to Berlin to establish the venture with his German partners will pay off. They have raised €3m so far, and aim to raise another €5m and although they plan to remain in Germany, they are now only seeking overseas investors.

“The future will change [Germany],” he said. “But right now, we can’t stop and wait.”

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Marine Le Pen falls short in French regional vote




Marine Le Pen’s far-right Rassemblement National party fell short of expectations in the first round of France’s regional elections on Sunday, leaving the Les Républicains party and other centre-right politicians in a strong position for the second and final set of ballots next weekend. 

The relatively poor results for the anti-immigration RN — in a record low turnout of about 33 per cent — will also provide some comfort for Emmanuel Macron, who is expected to face Le Pen when he seeks re-election as president next year. 

Le Pen described the low turnout as a “civic disaster” that gave a false impression of the political situation. “If you want things to change, you must vote,” she said in a short speech as the results began to emerge.

Xavier Bertrand, the centre-right leader of the Hauts-de-France region in the north, was on course for re-election and received a boost to his own presidential ambitions, with early estimates from BFMTV after polls closed giving him 44 per cent of the vote, against 24.4 per cent for Le Pen’s RN. 

Recalling that the RN had been ahead in the region after the first round in 2015, Bertrand boasted in a speech of “breaking the jaws” of his far-right rivals in this year’s electoral battle. Le Pen had campaigned in the north and hoped to flip the region to her party in Sunday’s vote. 

Xavier Bertrand after casting his ballot © AFP via Getty Images

Early estimates suggested that Le Pen’s party might be within reach of a first-round lead in Provence-Alpes-Côte-d’Azur in the south. But even there the performance was less impressive than predicted by opinion polls, which had suggested the RN would take control of the region after the second round in the first such victory in its history. 

That now looks less easy to achieve for the RN, since other parties have in the past tended to unite in a so-called “republican front” in second-round votes to keep the extreme right from power.

Nationwide, centre-right lists were forecast to receive about 29 per cent of the votes cast in the first round, against 19 per cent for the RN, 16 per cent for the Socialist party, 13 per cent for the Greens and 11 per cent for Macron’s centrist La République en Marche party. 

Incumbent parties performed well, with LR politicians in the lead in the Grand Est region in the east, Auvergne-Rhône-Alpes in the south-east and Ile-de-France around Paris. The Socialists expected to hold Occitanie and Brittany in the west.

Gérald Darmanin, interior minister, said the record low turnout was “particularly worrying”, adding: “Our collective effort must be to mobilise the French for the second round.” 

The low turnout did not fulfil the fears of Macron’s ally François Bayrou by benefiting the extreme right or the extreme left, and may have been the result of voter weariness with politics and a desire to enjoy themselves after more than a year of the Covid-19 pandemic. 

“The French have their minds on other things completely,” Brice Teinturier of polling group Ipsos told a webinar last week. “We are coming out of the pandemic . . . and the outlook for the economy is getting much better.”

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Delta variant begins to spread, threatening EU’s Covid progress




The Delta coronavirus variant that swept the UK has become dominant in Portugal and appeared in clusters across Germany, France and Spain, prompting European health officials to warn further action is needed to slow its spread. 

While the new strain, which first emerged in India, still only accounts for a fraction of the total coronavirus cases in mainland Europe, it is gaining ground, according to a Financial Times analysis of global genomic data from the virus tracking database Gisaid. It accounts for 96 per cent of sequenced Covid-19 infections in Portugal, more than 20 per cent in Italy and about 16 per cent in Belgium, the FT’s calculations show.

The small but rising number of cases have raised concerns that the Delta variant could halt the progress the EU has made over past the two months in bringing new infections and deaths down to their lowest level since at least the autumn. 

“We are in the process of crushing the virus and crushing the pandemic, and we must in no way let the Delta variant get the upper hand,” France’s health minister, Olivier Véran, told reporters at a Paris vaccination centre on Tuesday. 

Véran said that 2 per cent to 4 per cent of virus samples being analysed in France were showing as the Delta variant: “You might say this is still low but it is similar to the situation in the UK a few weeks ago.” The FT’s analysis of Gisaid’s data suggests this figure could be higher.

Chart showing that the Delta variant now accounts for more than half of sequenced cases in parts of the US, and is growing in prevalence across the country

In Portugal, community transmission of the variant has been detected in the greater Lisbon area, where more than 60 per cent of the country’s new coronavirus cases in the past week have been identified. Non-essential travel to and from the city has been banned in an effort to prevent the spike in cases spreading to the rest of the country.

Scientists across the continent are now looking to the UK — where Covid-19 cases have tripled in the past month and the Delta variant accounts for about 98 per cent of all new infections — for clues about what may happen next and which measures may need to be taken.

After official data showed the Delta variant appeared to increase the risk of hospitalisation by 2.2 times compared with the Alpha variant, the UK government this week imposed a one month delay to the removal of its remaining coronavirus restrictions.

“The decisions the UK makes to reopen life and society will serve as a laboratory for us in Europe,” said Bruno Lina, a virologist in Lyon who advises the French government and helps co-ordinate variant sequencing in the country.

Whether the clusters of Delta infections peppering the EU turn into bigger outbreaks will depend in part on how many people have been fully vaccinated, scientists said, as well as people’s behaviour now that many restrictions on life and business are being lifted.

Chart showing that there are signs that many states are now seeing a shrinking outbreak of the Alpha variant, and a growing one of Delta

Recent UK government research has highlighted the need to complete vaccination programmes as quickly as possible. According to data gathered by Public Health England, the first dose of a Covid-19 vaccine is generally less effective against the Delta variant than with the previous strains. Two doses increases protection against symptomatic infection with Delta from 33 per cent to 81 per cent. 

While in the UK about 46 per cent of the population has been fully immunised, vaccination rates in most countries in mainland Europe are hovering at between 20 per cent and 30 per cent. About 26 per cent of the population in France has been fully vaccinated.

French authorities are currently trying to contain an outbreak in the Landes region, near the Spanish border, where 125 cases of the Delta variant have been confirmed by genetic sequencing and another 130 are suspected, representing about 30 per cent of recent infections in the area. Clusters of the Delta variant have also been identified in recent weeks in the southern suburbs of Paris and an art school in Strasbourg. 

In each case health officials have responded with the same formula: increased contact tracing and a renewed push to vaccinate people in the affected areas.

“If we keep vaccination going at a good pace, and some non-pharmaceutical interventions like masks indoors, we can still repress the circulation of the virus this summer,” said Lina, the French virologist. “This variant will displace the other ones — we must keep that in mind — but it doesn’t mean that it will lead to a new epidemic wave.”

Vaccination site in Jutland, Denmark
Denmark has only identified a small number of Delta infections, even though the variant arrived in the country at approximately the same time as in the UK. © Henning Bagger/EPA-EFE

Some scientists fear the Delta variant may have already spread further but gone undetected given that less of the genomic sequencing needed to identify variants has been completed in mainland Europe. While the UK has sequenced more than 500,000 Sars-Cov-2 genomes, Germany, France and Spain have sequenced about 130,000, 47,000 and 34,000 respectively.

“It’s costly, it’s time consuming and it was neglected,” said Antoine Flahault, director of the Institute of Global Health at the University of Geneva.

Denmark, however, has sequenced a high proportion of cases and still only identified a small number of Delta infections, even though the variant arrived in the country at approximately the same time as in the UK.

This could be explained partly, experts said, by differences in demographics and movement, including the number of cases imported into the country from regions with a high prevalence, such as India, and the living conditions in the communities into which it is seeded.

The difference in the pace of Delta’s spread across European countries remained “a little bit of a mystery”, said Jeff Barrett, director of the Covid-19 Genomics Initiative at the Wellcome Sanger Institute in Cambridge.

Still, many experts believe that wherever the Delta variant is introduced, it will eventually become dominant. The key, they say, will be to increase the proportion of fully vaccinated people, while slowing transmission of the virus as much as possible.

“We have to keep the messaging very clear,” said Lina in Lyon. “This is not over.”

Additional reporting by Daniel Dombey, Peter Wise, Guy Chazan and Clive Cookson

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EU fails in legal bid to speed up AstraZeneca vaccine supply




The EU has lost a legal bid to force AstraZeneca to speed up delivery of Covid-19 vaccines or risk billions of euros in fines, the latest round in a bitter battle between the bloc and the UK-Swedish pharmaceutical company.

In a ruling on Friday, a court in Brussels criticised AstraZeneca for a “serious breach” of its contract with the EU after repeated shortfalls but refused to impose a new schedule demanded by Brussels that would have required the company to deliver 120m doses by the end of June or pay fines of €10 per dose per day.

The dispute between the European Commission and AstraZeneca has severely damaged the company’s standing on the continent and in February spiralled into a diplomatic row when Brussels threatened to exercise an emergency provision of the Brexit deal to stop vaccines entering the UK via Northern Ireland.

The Brussels court ruled that AstraZeneca should provide 80m doses by the end of September. However, in practice this should have no impact on AstraZeneca, which has already delivered 70m doses and plans to provide the remaining 10m before the end of this month.

The commission insisted that the court judgment would nonetheless put pressure on AstraZeneca because it had “laid the tracks for the delivery of future doses on the basis of clear contractual principles”, including supply from British manufacturing sites.

“The company will have to follow these tracks and it can no longer argue that it cannot use the UK plants for the production of vaccines for the European Union,” the commission said.

The ruling found that the pharma company’s failure to send the EU vaccines manufactured in the UK was inconsistent with making the “best reasonable efforts” on supply required by its contract. But it did not order AstraZeneca to use UK production to fulfil the EU order.

A UK plant operated by Oxford BioMedica is nonetheless expected to start manufacturing for the EU, according to a person familiar with the matter. 

AstraZeneca was originally expected to supply up to 300m doses to the EU in the first six months of this year but that forecast was cut sharply after production problems.

With the pace of the EU’s vaccine rollout improving, using mainly Pfizer/BioNTech and Moderna jabs, and some countries imposing restrictions on the AstraZeneca vaccine after the discovery of rare blood clots, there is less practical need for the doses.

Jeffrey Pott, AstraZeneca’s general counsel, said: “AstraZeneca has fully complied with its agreement with the European Commission and we will continue to focus on the urgent task of supplying an effective vaccine, which we are delivering at no profit to help protect people in Europe and around the world from the deadliest pandemic in a generation.”

Ursula von der Leyen, president of the commission, said: “This decision confirms the position of the commission: AstraZeneca did not live up to the commitments it made in the contract. It is good to see that an independent judge confirms this.”

The court is due to hold hearings in September on a second case brought by the Commission seeking judgment on whether AstraZeneca failed in its duty to deliver on the supply contract. 

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