At the end of last week, Germany officially labeled the far-right Alternative für Germany (AfD) party as a confirmed right-wing extremist group. 

This unprecedented decision was announced by the country’s domestic intelligence service.

Never before has a party with federal representation in Germany’s parliament been placed under such scrutiny. 

With the AfD polling near record highs and holding over 150 Bundestag seats, the news has set off a wave of legal, political, and international reactions.

The country now faces a serious test of how far democratic institutions can go to protect themselves.

Why is the AfD now considered extremist?

Germany’s Federal Office for the Protection of the Constitution (BfV) spent three years investigating the AfD, and their findings were published in a confidential 1,100-page report. 

The agency concluded that the AfD poses a threat to the democratic order.

According to the BfV, the party promotes an “ethnic concept of the people” that violates the principle of human dignity laid out in the German constitution.

The report cites repeated anti-Muslim, anti-immigrant, and anti-minority statements by senior officials.

The BfV had already classified regional branches in Saxony and Thuringia as extremist.

But this is the first time the national party as a whole has received this status.

The classification allows the intelligence agency to monitor the party’s activities using wiretaps, undercover agents, and digital surveillance.

Since its inception in 2013, the AfD has grown from a Eurosceptic fringe party into a major political force.

It won 20.8% of the vote in Germany’s February 2025 federal election and currently holds 152 seats in the Bundestag. 

The Christian Democrats (CDU/CSU) finished first with 28.6%.

But some of the most recent polls are even showing that the AfD is closing the gap in popularity.

How are politicians and states reacting?

The classification has triggered a nationwide debate about what happens next.

Several leading figures in the CDU and SPD have suggested that AfD members working in the public sector may no longer be suitable for government service. 

Officials in Hesse and Bavaria confirmed that reviews are underway to determine if civil servants affiliated with the party can remain in their roles.

North Rhine-Westphalia’s Interior Minister Herbert Reul warned against immediate dismissals.

He said individual assessments are necessary, and party membership alone may not be enough to remove someone from public service. 

But others disagree.

Former Parliamentary State Secretary Marco Wanderwitz argued that anyone in a confirmed extremist party should not be in the civil service or allowed to own a firearm.

At the federal level, there is growing discussion over whether to pursue a ban on the AfD entirely.

SPD leader Lars Klingbeil acknowledged it as a possibility but emphasized that such a move would take years and should not replace political engagement. 

CDU Bundestag member Roderich Kiesewetter said the conditions for a ban are improving.

However, legal experts have warned that a ban would face significant hurdles and would need to be approved by the Constitutional Court.

What does this mean for democracy?

The decision has also sparked a larger conversation about how democracies defend themselves.

Some critics of the case, including US Secretary of State Marco Rubio, described it as a form of political censorship. 

Rubio said on X that “Germany just gave its spy agency new powers to surveil the opposition” and called it “tyranny in disguise.”

Elon Musk also voiced support for the AfD, describing it as a “centrist party under attack.”

Meanwhile, German officials have pushed back.

The Foreign Ministry responded directly to Rubio, saying that the move was lawful, independent, and based on years of investigation. 

Overall, the classification does not ban the AfD from running in elections or forming alliances, but it gives law enforcement new tools to track its activity and monitor its communications.

The decision has highlighted a deeper challenge facing many liberal democracies.

How do open societies handle political movements that reject key constitutional values? 

Germany’s response suggests that it sees legal tolerance limits, especially when basic rights like equal protection and human dignity are at risk.

Who is standing behind the AfD?

While domestic support has become more fragmented, the AfD is finding allies abroad.

Hungarian Prime Minister Viktor Orbán quickly came to the party’s defense, asking, “What the hell is going on in Germany?” and pledging support to AfD leader Alice Weidel. 

In Russia, former President Dmitry Medvedev criticized the decision as politically motivated.

The AfD has previously taken pro-Russian positions, including questioning sanctions and opposing military aid to Ukraine.

The party also enjoys support from parts of the US conservative movement.

In addition to Rubio, AfD leaders have cultivated relationships with President Trump and his circle.

Alice Weidel attended Trump’s inauguration, and Elon Musk spoke at an AfD event earlier this year.

These international endorsements have helped the AfD position itself as part of a right-wing movement that challenges global institutions, immigration policy, and the post-war liberal order.

What’s really at stake here?

This is not just a domestic story about a controversial party.

It’s a larger test of how a post-war democracy reacts when one of its major parties stops playing by the rules. 

The AfD didn’t just attract protest voters. It built its base by attacking the very foundations of Germany’s constitutional system.

Its protections for minorities, the historical consensus on the Nazi era, and the belief in equality before the law.

This makes the BfV’s decision something more than a bureaucratic label.

It’s a line in the sand. Germany is saying: you can’t campaign against the constitution and still expect its protection.

There is a risk, of course. If democratic institutions overreach, they may reinforce the AfD’s message that the system is rigged.

But doing nothing would carry a bigger risk: that a party openly hostile to democracy could grow unchecked within it.

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With Warren Buffet announcing he will relinquish the role of chief executive officer at Berkshire Hathaway by the end of 2025, analysts appear divided over whether the development will have a long-term bearing on the Berkshire Hathaway stock.

While some market observers believe Buffett’s exit could erode Berkshire’s premium valuation over time, others remain confident in the company’s long-term prospects.

Berkshire stock had climbed around 20% this year through Friday, outperforming the broader S&P 500 index, which was down 3% in the same period.

The stock dropped sharply on Monday following the succession news and disappointing quarterly earnings.

Class A shares fell 4.4% to $773,493, while Class B shares declined 4.5% to $516.05.

In after hours trading on Monday, class A stock was up by 2.30%, while class B stock recovered by 0.3%.

The succession

Buffett announced his departure from executive leadership in a surprise declaration at the conclusion of the company’s annual meeting.

The 94-year-old investing legend recommended Greg Abel, the vice chairman overseeing Berkshire’s non-insurance operations, as his successor.

The Berkshire board of directors approved the transition plan on Sunday.

While Buffett will no longer serve as CEO after next year, Berkshire confirmed early Monday that he will remain chairman.

Buffett also said he expects to have an informal role at the company, acting as an advisor to Abel “when needed” starting in 2026.

Abel, who has been at the helm of Berkshire’s sprawling non-insurance businesses since 2018, is widely regarded as a steady hand and close confidant of Buffett.

His elevation had long been speculated, but the formal announcement ends years of uncertainty over the succession at one of America’s most closely watched conglomerates.

Q1 earnings miss, Berkshire’s high cash hoard raises questions

The decline in Berkshire Hathaway’s stock can be attributed, in large part, to Warren Buffett’s deep association with the company’s long-term success since investors have long viewed Buffett as integral to Berkshire’s identity and performance.

However, the company’s first-quarter earnings, coming in below expectations, also added pressure.

Berkshire reported operating profit of $6,073 per Class A share, trailing the consensus forecast of $7,077 and marking a decline of about 14% from the same quarter last year.

Additionally, Berkshire was a net seller of stocks during the quarter, offloading $4.7 billion while purchasing $3.2 billion, resulting in net sales of roughly $1.5 billion.

Its conservative capital deployment disappointed those who had anticipated Buffett would capitalize on recent market volatility.

Berkshire’s cash hoard continued to climb, reaching nearly $335 billion after accounting for the timing of Treasury bill purchases.

The massive war chest reflects Buffett’s continued struggle to find attractive investment opportunities in a market he deems overvalued.

KBW cuts EPS forecasts for on weak projections

This cautious stance, coupled with weaker earnings, led some analysts to temper their near-term expectations for Berkshire.

Meyer Shields of KBW lowered his 2025 and 2026 earnings forecasts by approximately 1.5% each, citing weaker projections across both insurance and non-insurance segments.

Shields wrote in a client note that profits fell short “in Primary and Reinsurance, Manufacturing, and Railroads, Utilities, and Energy, and other income, partly offset by outperformance in GEICO and Service and Retailing.”

He now expects 2025 earnings of $30,865 per Class A share and 2026 earnings of $32,605.

Shields maintained a “Market Perform” rating on the stock but increased his price target slightly from $730,000 to $735,000 per Class A share.

He wrote that the Berkshire valuation “very fully reflects its earnings prospects and balance sheet strength amidst ongoing macro uncertainty and the emerging management succession (which will probably impact investors’ view of Berkshire more than it will actual operations) in Mr. Buffett’s just-announced retirement plans.”

Doug Kass, president of Seabreeze Partners, urged caution, tweeting on Monday that “the company will likely — in the fullness of time — lose its premium valuation” without Buffett at the helm.

“Stated simply, don’t bottom fish in Berkshire Hathaway,” he wrote, adivising against buying the stock.

UBS expects “minimal disruption” from leadership change, stays bullish

In contrast, UBS analyst Brian Meredith maintained a bullish stance, reiterating a “Buy” rating and setting a price target of approximately $909,000 for Class A shares and $606 for Class B shares.

“While it is hard to imagine anyone with the investing talents of Buffett, the structural advantages of “permanent capital” and having the vast array of BRK’s business to gather information to aid investment decisions remains,” Meredith wrote.

Meredith expects minimal disruption from the leadership change, citing Berkshire’s stable mix of businesses and strong liquidity of around $347 billion in cash and short-term investments.

Meredith acknowledged the Q1 miss, driven by lower insurance investment income and softer manufacturing and retail results, but emphasized the strength of Berkshire’s insurance underwriting and operational resilience.

“Buffett leaves a company that is less reliant on his investing capabilities, with an array of leading businesses with strong cash flows,” Meredith wrote.

“Operationally, we expect little change at Berkshire.”

As Buffett prepares to pass the torch after nearly 60 years at the helm, investors will closely watch how the company navigates this historic transition—and whether Abel can command the same confidence in markets that Buffett has long inspired.

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Fueled by a weakening US Dollar and increasing Middle Eastern geopolitical tensions, gold prices continued their upward trend for the second consecutive day on Tuesday, with buyers showing strong momentum.

“Despite renewed optimism of the US reaching trade deals with some of its trading partners as early as this week, US President Donald Trump’s erratic trade policies continue to unnerve markets, allowing Gold price to recover lost ground,” Dhwani Mehta, analyst at FXStreet, said in a report. 

Gold prices hit a two-week high on Tuesday, reaching $3,394 today, its highest level since April 23. Prices had fallen to a two-week low last week.

At the time of writing, the most-active gold contract on COMEX was at $3,367.44 per ounce, up 1.4% from the previous close. 

Trump fuels safe-haven demand

US President Donald Trump announced late Monday that he intends to impose pharmaceutical tariffs within the next two weeks.

This announcement follows his signing of an executive order aimed at encouraging drug manufacturing within the US.

Additionally, Trump announced on Sunday a 100% tariff on movies produced overseas, though specifics regarding the implementation of this levy were scarce.

The US Dollar (USD) is still struggling to find significant buyer interest.

This lack of demand appears to be driven by increased economic uncertainty stemming from Trump’s tariffs.

Mehta said:

This turns out to be another factor lending some support to the Gold price.

Geopolitical tensions

Russian officials reported that Ukraine launched drone attacks on Moscow for the second consecutive night, leading to the shutdown of the city’s three main airports. 

Additionally, Ukrainian forces were reportedly attempting to advance in Kursk and attacked a power substation in Russia’s western Kursk region.

Ongoing geopolitical tensions involving Israel and Yemeni Houthi rebels, as well as the Russia-Ukraine conflict, persist in providing support for the price of gold as a traditional store of value.

Reportedly in coordination with the US, Israel conducted airstrikes on Yemen’s Hodeidah port following a ballistic missile attack by Houthi rebels on Ben Gurion International Airport on Sunday.

Mehta added:

Therefore, Gold price seems to remain in a constructive space heading into the two-day US Federal Reserve (Fed) policy meeting starting later on Tuesday. 

Fed meeting in focus

The key event this week is the Federal Reserve’s upcoming interest rate decision and subsequent remarks from Fed Chair Jerome Powell on Wednesday. 

These will provide insight into the US central bank’s future rate path. Since last December, the Fed has maintained its policy rate within the 4.25% to 4.50% band.

Commenting on the upcoming Fed event, Nick Timiraos, the Wall Street Journal’s Fed whisperer, noted that the Fed “prepares for difficult judgments and emerging divisions regarding when to cut interest rates,” according to FXStreet’s report.

Despite reduced expectations for a June interest rate cut due to a stronger economy, gold optimists remained unfazed, according to Mehta. 

Their focus remained on trade news and geopolitical tensions, as well as the rate decision and Powell’s subsequent remarks.

Technical outlook

Technically, the gold price’s significant intraday upward movement has pushed it above the $3,350 resistance. 

This level also aligns with the 50% Fibonacci retracement of its recent decline from the record high, according to Haresh Menghani, editor at FXStreet.

“This, along with positive oscillators on the daily chart, suggests that the path of least resistance for the commodity remains to the upside.”

Sustained buying interest exceeding the 61.8% Fibonacci level, approximately at $3,385, would strengthen the positive outlook. 

This could propel gold past the $3,400 threshold and towards the subsequent resistance area near $3,425, Menghani said.

The subsequent move up should allow bulls to make a fresh attempt to conquer the $3,500 psychological mark.

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European Union officials said that plans will be published on Tuesday to prohibit any new Russian gas agreements by the close of the current year, according to a Reuters report. 

Furthermore, existing contracts with Moscow are slated to be phased out by the end of 2027.

Following Russia’s full-scale invasion of Ukraine in 2022, the bloc established a non-binding objective to cease imports of Russian fossil fuels by 2027.

EU Commission officials informed Reuters about a planned commitment to propose a ban in June on new Russian gas import deals and spot contracts, aiming for implementation by the end of 2025.

Proposal to ban Russian gas

European Union officials, speaking anonymously due to the confidential nature of plans that are subject to change before publication, stated that a formal proposal will be made to prohibit Russian gas and liquefied natural gas imports by the close of 2027. This ban would apply to existing contracts.

To be enacted, the proposed legal measures must be endorsed by the European Parliament and a qualified majority of EU member states.

Despite EU sanctions on Russian coal and seaborne oil, gas remains exempt due to opposition from Slovakia and Hungary. 

These nations, reliant on Russian pipeline gas, argue that alternative suppliers would lead to increased energy costs. Notably, EU sanctions necessitate unanimous agreement from all 27 member states.

Russian gas continues to flow to Europe

Europe continues to source approximately 19% of its gas supply from Russia through the TurkStream pipeline and deliveries of liquefied natural gas.

Though significantly reduced from pre-2022 levels (approximately 40%), Russia still supplies some gas to Europe. 

A key factor is the existence of “take-or-pay” contracts with Gazprom, obligating European buyers who decline gas deliveries to compensate for a substantial portion of the agreed-upon amounts.

The European Commission is exploring legal avenues for European firms to terminate their current Russian gas agreements without incurring financial repercussions.

EU officials have not detailed their intended approach. Legal experts suggest that invoking “force majeure” to withdraw from these agreements would be challenging, potentially leading to penalties or arbitration for buyers.

US LNG to Europe

Facing the imperative of severing long-standing energy dependencies with Russia, the European Commission has indicated a growing openness to significantly increase liquefied natural gas (LNG) imports from the United States. 

This strategic shift reflects a multifaceted effort to bolster energy security, diversify supply sources, and mitigate the economic and geopolitical risks associated with reliance on Russian energy. 

The potential for enhanced US-EU LNG trade presents both opportunities and challenges, requiring careful consideration of infrastructure capacity, pricing dynamics, environmental implications, and long-term energy policy objectives on both sides of the Atlantic. 

This move also has broader implications for the global energy landscape, potentially reshaping trade flows and geopolitical alliances as Europe seeks alternative energy partners.

This is also a move demanded by US President Donald Trump from Europe as a way of shrinking its trade surplus with the United States.

The Commission expresses concerns regarding energy prices and emphasises that any restrictions on Russian energy imports should inflict more damage on Moscow than the EU. Such measures must also carefully consider their impact on fuel costs.

The US is urging Russia to negotiate a peace agreement with Ukraine. A successful resolution could lead to the reinstatement of Russian energy supplies and a relaxation of existing sanctions.

The European Commission initially intended to release its roadmap in March but postponed the publication, partly because of the ambiguity surrounding these unfolding events.

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