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The German scion who sees it as his duty to house refugees and young offenders

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Tobias Merckle, an heir to one of Germany’s largest fortunes, lives in prison. The 50-year-old’s modest two-room residence is above a joinery workshop at a juvenile detention centre on the outskirts of Stuttgart. He founded the institution to rehabilitate young offenders almost 20 years ago and still runs it, overseeing everything from cooking to carpentry to sanctioned cigarette breaks.

It is an unusual vocation for a scion of a wealthy dynasty. Although the precise value of the Merckles’ assets is undisclosed (they include more than a quarter of the Dax-listed HeidelbergCement and all of pharma company Phoenix), the family are multibillionaires, with the sale of drugmaker Ratiopharm alone fetching €3bn in 2010.

“My father was always clear that I should go into the business,” says Merckle in his heavy Swabian accent. “He would obviously have preferred that.” That future was derailed in the 1990s, after Merckle spent a year in Chattanooga, Tennessee, as part of his studies of social work with drug addicts. Frustrated at the imprisonment of people he felt could be rehabilitated, he decided to dedicate himself to reforming prison systems.

Back home, Merckle opened and seed-funded the first Seehaus, or “lake house”, in 2003 after reaching a deal with his native state of Baden-Württemberg, which for the first time in modern Germany allowed young offenders to serve prison terms in a non-governmental institution. With a sister institution near Leipzig in eastern Germany, the project has had roughly 250 youths — male, as there are very few females of that age in German jails — pass through its doors.

Those chosen from jails by Merckle’s organisation with the help of the prison system live on the leafy campus and its 17th-century manor, and receive on-site vocational training in woodwork, masonry, metallurgy or landscaping, as well as the chance to work on a small farm or a bakery. The inmates are housed in spacious flats, which they must keep clean, and are overseen by families who live in the same building to provide a semblance of structured life. There are no gates, but if inmates abscond and are caught, they are sent back to jail, forfeiting their Seehaus place.

Their daily regime, however, is hardly permissive. “We have to wake up at 5.30am twice a week and go jogging,” says one 21-year-old, who asked not be named. Television viewing is restricted to bi-weekly news programmes, and mobile phones are only allowed for four hours a week, for those who have accumulated the most privileges. “It’s hard to remain motivated,” says the young man, who has three job offers for when he is released. “But you learn many things here that you can take with you into the outside world.”

On Seehaus’s leafy campus, access to TV and mobile phones is strictly limited © Patrick Junker
Tobias Merckle © Patrick Junker

While some of the offenders come from Muslim families, and are encouraged to deepen their faith, there is a strong Christian ethos at the complex. Inmates are invited to say grace before meals, and much of the available literature is religious in nature.

The programme is not always successful. Some 30 per cent of inmates find they cannot comply with the rigid routine and return to jail. But 98 per cent of those who do complete a Seehaus programme have found a job, according to Merckle, and only a quarter have ended up behind bars once again, compared with almost 45 per cent of those released from regular prisons.

Merckle’s philanthropic projects have extended beyond the penal system. Five years ago, at the height of the refugee crisis, German chancellor Angela Merkel opened the country to almost 1m migrants, a policy reflecting Willkommenskultur, or welcoming culture. But he began to notice cracks in the system. A former student of social pedagogics at Lüneburg university, Merckle says he believes in some controls on immigration, but is critical of the lack of development opportunities available to those who arrive in Europe.

Those chosen from jails by Merckle’s organisation live on a leafy campus and receive on-site vocational training © Patrick Junker

He embarked on a campaign to build bespoke housing for refugees and asylum seekers in Germany. Frustrated by the sight of migrants living in converted shipping containers on industrial sites and being excluded from work, Merckle invested an undisclosed sum in Hoffnungshäuser, or houses of hope, where Germans and foreigners live side by side.

Among the first to move in was Alyaa Elkhudary, now 31, who fled Damascus in 2015 with her brother, leaving the rest of her family behind. “It was hard at the beginning. The situation was different; my immigration status was unclear,” says Elkhudary, who shared a flat in Leonberg, near Stuttgart, with German and Chilean women. “But we danced and we laughed together. With respect, with understanding, you can bridge the cultural divide.”

Matthias Seitz, who lives in and runs a Hoffnungshäus © Patrick Junker
Alyaa Elkhudary, 31, who fled Damascus in 2015 and now lives in a ‘Hoffnungshäus’ © Patrick Junker

Rental agreements at the Hoffnungshäuser are unlimited, meaning refugees can stay as long as they like until they are ready to move out. That can prove difficult, even for those who have found employment. On top of the general housing shortage in Baden-Württemberg, “we still have discrimination on the housing market”, says Matthias Seitz, who lives in the Leonberg complex with his wife Cathrin. The couple manage the building and its projects, which include language classes, especially for young mothers; help navigating German bureaucracy, healthcare and education; and employment schemes.

When the Leonberg building opened in 2016, roughly 80 per cent of refugee residents were unemployed; today just 11 per cent are. Many work in the car industry — Daimler is just down the road — as well as hospitality and gardening.

The focus of the Hoffnungshäuser, however, is on broader integration into society, and organisers try to avoid housing people of the same ethnicity in the same flats, preferring to mix religions and cultures. “Maybe you will live with someone with whom you have [had] an historical conflict,” says Seitz. “Regular interaction is incredibly valuable — you only get that when you live together.” As well as meeting each other casually every day, residents — there are 80 in Leonberg, half of whom are locals — meet once a month to share their experiences.

The Seehaus complex in Leonberg © Patrick Junker

“These evenings really help us to understand the system here in Germany,” says Elkhudary, who has found work co-ordinating interpreters for the local authorities. “Those from around here taught us about things like Kehrwoche [a cleaning rota system integral to Swabian culture] or how to divide the recycling.”

Merckle, a devout Christian, says such schemes are about more than just charity. “Integration will be a part of Germany, otherwise we won’t have enough people [to fill jobs] here,” he says. Rather than letting people languish until their immigration status is settled, it would be “much better if we taught them German and a trade from the first day”. Even if those who have benefited from the Hoffnungshäuser are eventually deported they can take the skills they gained back to their home countries, Merckle says.

A resident of Seehaus, where young offenders can access vocational training © Patrick Junker

The idea is catching on. Merckle’s foundation, which has commissioned a local architect to design homes that can be rapidly and cheaply built, runs 15 houses across six locations in Baden-Württemberg and is expanding to 27 houses with 180 flats in total, partly funded by crowdsourcing campaigns.

Merckle does not share the views of those rich Germans who have criticised the accumulation of wealth and is at peace with the country’s social market economy. He will not disclose how much he spends on his philanthropic projects, but he sees his work as symbiotic with the values that drove his Lutheran family to build successful businesses in the first place. “Germany’s basic law says property entails obligations,” he says. “It’s very important to have that mindset. If I am entrusted with something, I have to be a good steward of it.”

Merckle’s father Adolf killed himself in 2009 after losing money in the financial crisis, leaving his heirs to restructure the family fortune. Publicity, Merckle says, is “something that we as a family never searched for”, although as part of his informal campaign to convince others to share their wealth, he is forced to speak out about the imperative for wealthy Germans to do more with their money.

But he will continue to orchestrate such efforts from his home at a correctional facility. “I can’t live somewhere else — I have to lead by example,” he says. “I have a life-long sentence.”

This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment



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Fears grow over media independence in Czech Republic

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European media groups have warned that the independence of the Czech public broadcaster is under mounting pressure, ahead of a parliamentary election in the central European nation later this year.

Czech Television (CT) remains one of the few independent public broadcasters in central Europe, where governments in countries such as Poland and Hungary have reduced public media to their mouthpieces.

However, media groups and Czech opposition politicians are worried that new appointments to CT’s governing body, which are due to be voted on in the next parliamentary session starting today, could lead to CT’s autonomy being undermined.

Czech MPs are set to pick four new members of CT’s governing body, the Council. The Council does not directly control the broadcaster’s content, but has the power to fire its director-general.

Opposition MPs have claimed that candidates on the shortlist for the four open positions on the 15-strong Council have been picked not for their media expertise but because their views align with those of the ANO party of prime minister Andrej Babis and its allies.

Czech Republic prime minister Andrej Babis owned various media titles including two big newspapers through his company Agrofert © AP

MPs from ANO deny this. “For us, the only criterion is whether the candidates have met all the requirements for selection required by law,” Stanislav Berkovec, an ANO MP, told the website iRozhlas.cz last month.

However, the situation in Prague has prompted the European Broadcasting Union, which represents public service media, to issue an unusually strong warning about governments across Europe “trying to silence opposition voices by restricting freedom of the press”.

EBU director-general Noel Curran and Delphine Ernotte, the chief executive of France Televisions and EBU president, have written to Czech MPs urging them to protect the independence of the national broadcaster.

“In recent months, it has become alarmingly clear that the Czech Republic’s government is trying to exert pressure on [the independence of Czech Television], directly and indirectly,” the EBU said in a statement.

“It may be that only pressure from outside will preserve the hard-won independence of a public-service broadcaster that is crucial . . . to the democratic future of a nation often seen as a bulwark against authoritarianism in central and eastern Europe.”

The Vienna-based International Press Institute, a media watchdog, has expressed similar concerns, warning that the manoeuvring around the Council appointments could, in the worst case, pave the way for the removal of the current director-general of CT, Petr Dvorak.

“We find it hard to avoid the conclusion that the real aim is to fill the CT Council with enough figures who are critical of Dvorak to ensure that there is a majority to vote to dismiss him when the opportunity arises,” it said.

Observers say that CT’s independence is particularly important, given that many private Czech media groups are controlled by oligarchs. Prime minister Babis, himself a billionaire, owned various titles including two big newspapers through his company Agrofert, before he put his assets in trust in 2017.

“Czech public television, especially its information channel, is one of the most trusted of sources of information, especially concerning the pandemic . . . It is also one of the few which has overall reach and can get to everyone in the country,” said Martin Ehl, a senior journalist at Hospodarske Noviny, a leading Czech daily, and senior associate at the think-tank Visegrad Insight. “It is very important in this media environment, where different oligarchs own different media.”

The battle in Prague comes ahead of a parliamentary election in October, in which Babis’s ANO, which has headed a coalition government for the past four years, is facing a serious challenge from opposition parties. A poll last month put ANO second behind the centrist Pirate party.

The battle also has echoes of conflicts around Europe as public broadcasters in various countries are fighting to preserve their independence against governments who are aggressively seeking to influence output, or hobble the organisations by cutting taxpayer funding. 

Poland and Hungary are the most striking examples of how public broadcasters have been turned, through management and staff changes, into enthusiastic champions of the ruling party’s illiberal political agenda. But MEPs and campaigners fear the tactics are spreading to countries such as Slovenia, the Czech Republic and beyond. 

Adam Cerny from the Czech journalists’ group, Syndikat Novinaru, said there was “increasing risk” that the Czech Republic could go in the same direction as Poland and Hungary. But he expressed scepticism that ANO would want to have a such a big fight before the election. “I don’t think that Babis wants open political confrontation because of Czech TV,” he said.



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CDU leadership backs Armin Laschet’s bid to be German chancellor

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Armin Laschet won a key victory in his campaign to succeed Angela Merkel when the party he leads, the Christian Democratic Union, backed him as their candidate for chancellor in September’s Bundestag election.

The CDU governing executive’s decision to back Laschet was a setback for Markus Söder, governor of Bavaria, who has also laid claim to the title.

The move was expected, but could prove controversial. Söder is by far the more popular politician, and many CDU MPs had argued in recent days that the party would have a much better chance of winning September’s election with Söder as their candidate.

After throwing his hat into the ring on Sunday, Söder said he would accept the CDU’s decision. However, it is still unclear whether his party, the Bavarian Christian Social Union, will accept Laschet as the CDU/CSU’s joint candidate. The CSU’s executive is meeting later on Monday.

Sunday’s events threw the process for finding a successor to Merkel, who will step down this year after 16 years as Germany’s leader, into confusion. The CDU and CSU traditionally field a joint candidate for chancellor: that person is usually the leader of the CDU, which is by far the larger party.

Volker Bouffier, governor of the western state of Hesse, said the CDU’s executive had unanimously backed Laschet at a meeting in Berlin on Monday morning. He added, however, that no formal decision had been made on the issue.

Bouffier said the executive had made clear “that we consider [Laschet] exceptionally well-suited and asked him to discuss together with Markus Söder how we proceed”. He added that “the current polls should not determine the decision over [who we choose as] candidate”.

Since Laschet was elected CDU leader in January, the party has suffered a precipitous slump in the polls and that created an opening for Söder. He has frequently argued that the CDU/CSU’s joint candidate should be the politician with the best chances of winning in September.

Voters have blamed the CDU for the government’s recent missteps in its handling of the coronavirus pandemic, in particular the slow pace of Covid-19 vaccinations. Revelations that a number of CDU and CSU MPs earned huge commissions on deals to procure face masks also badly damaged the party’s image.

The malaise in the CDU was highlighted last month when it slumped to its worst ever election results in the two states of Baden-Württemberg and Rhineland-Palatinate, which for decades had been Christian Democrat strongholds. National polls currently put support for the CDU/CSU at between 26 per cent and 28 per cent, way down on the 33 per cent it garnered in the last Bundestag election in 2017.

There was more bad news at the weekend for Laschet, who as well as being CDU leader is also prime minister of North Rhine-Westphalia, Germany’s most populous state. A poll for broadcaster WDR in NRW found that only 26 per cent of voters in the state are satisfied with the work of the regional government Laschet leads and only 24 per cent of voters consider him a suitable candidate for chancellor.

The slide in the CDU’s fortunes contrasts with the rise of the Greens. The party garnered 8.9 per cent of the vote in 2017 and is now polling at 23 per cent. It is seen as a racing certainty that it will be part of Germany’s next government.



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EU and UK edge towards accord on trade rules for Northern Ireland

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The UK and the EU are making progress in talks on how to apply post-Brexit trade rules in Northern Ireland, raising hopes of an agreement that could help reduce tensions that have spilled over into violence on the streets of Belfast.

Officials on both sides said that recent days of intensive contacts had given cause for optimism that the UK and EU can craft a “work plan” on how to implement the Northern Ireland protocol, which sets the post-Brexit terms for goods to flow between the region and Great Britain. EU Brexit commissioner Maros Sefcovic and his UK counterpart David Frost may meet to review progress this week. 

“They are advancing on a technical level and probably we will see a [Frost-Sefcovic] meeting rather sooner than later”, said one EU diplomat, while cautioning progress depended on firm commitments from the UK and its “unequivocal support” for the Brexit withdrawal agreement.

Other EU diplomats and officials said strong UK engagement in the technical talks on implementation of the Northern Ireland protocol had raised hopes that an understanding could be reached. 

“The mood seems to have warmed up a bit — the tone of the discussions is quite good,” said one British official. 

The talks are a follow up to a draft plan about implementation of the Northern Ireland protocol that was submitted by the UK to Brussels at the end of last month — a step the EU said was essential to rebuilding trust after Britain unilaterally extended waivers for traders from some aspects of the rules in March. This move prompted EU legal action.

The discussions between British and EU officials in recent days have taken place against the backdrop of violence in Northern Ireland, stoked in part by resentment within the unionist community at how the protocol treats their region differently to the rest of the UK.

From April 2 there were eight consecutive nights of unrest in Northern Ireland, involving both unionist and nationalist areas. The police responded by deploying water cannons for the first time in six years.

The Brexit deal placed a trade border down the Irish Sea in order to keep commerce seamless on the island of Ireland. The Northern Ireland protocol requires customs and food safety checks for goods entering Northern Ireland from Great Britain.

Officials said the EU-UK talks now under way about implementation of the protocol cover a wide array of practical issues ranging from trade in steel and medicines to the policing of food safety standards, how to deal with residual soil on plant bulbs, and the construction of border inspection posts. 

“Technical talks are ongoing”, said an EU official. “Depending on the progress made at technical level, a political-level meeting may be held soon.”

But EU diplomats and officials also cautioned that more work remains to be done, especially on the thorny issue of applying food safety checks. Difficult talks also lie ahead on the timetable for putting particular measures in place.

Meanwhile Downing Street played down a report in The Observer that it was resisting proposals by Dublin for a special crisis summit to address the outbreak of violence in Northern Ireland.

“We have not refused anything,” said a Number 10 official. “It’s something we will consider.”

However there are concerns on the British side about the wisdom of holding a summit in Northern Ireland with Irish government ministers at a time when pro-UK loyalist groups have been engaged in street violence.

Irish officials said taoiseach Micheál Martin and British prime minister Boris Johnson have spoken and would “maintain close contact over coming days”.



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