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Excellencies, ladies and gentlemen,

Let me welcome you to the Business Forum on the Baltic Sea Region, which we are holding as part of the German Presidency of the Council of the Baltic Sea States.

When Germany’s economy is thriving, that’s also good news for German foreign policy. Germany’s influence in the world has nothing to do with the size of our armed forces. Our influence is rooted in astute diplomacy, humanitarian engagement and economic strength. That is why external economic promotion is a key concern of German foreign policy.

Economic ties mean more than just selling our products to one another. Germany exports not only goods and services, but also social and ecological standards. We seek genuine partnerships, not quick profits. The German economy is highly respected around the world for this. Our economy is an excellent “calling card” for our country.

The Federal Foreign Office and its missions around the world stand on the side of the German economy. This does not mean we are turning diplomacy into a money-making enterprise. Rather, this is the conclusion we have drawn from the realization that economic ties can forge and foster political closeness while also enhancing Germany’s influence in the world.

Right at our own doorstep – in the Baltic Sea Region – we have seen how well the principle of transformation through trade can work. Today we all benefit from the close political, economic and cultural ties among the countries around the Baltic Sea. Looking back, this intensive cooperation may now seem a matter of course, but that was not always the case.

Right up to 1989 the Baltic was a sea divided by the Iron Curtain, a part of Europe increasingly marginalized by Cold War tensions. Not until the achievement of German unity and European unification was the Baltic transformed from a sea of confrontation to a sea of freedom and cooperation.

Right now the efforts under way to tackle the so-called euro crisis are very much the focus of attention. The term “euro crisis” is a misnomer. The euro itself is not in crisis. Quite the opposite in fact: our common European currency is a remarkable success story.

In the wake of the financial crisis, governments had to mobilize billions to shore up the international banking system and produce huge stimulus packages. Levels of sovereign debt kept skyrocketing. In the end the financial markets questioned whether some euro countries would ever be able to repay their massive debts. The sovereign debt crisis turned into a crisis of confidence.

The provision of short-term liquidity alone will clearly not suffice to overcome the crisis. What we need to do is convince the markets that in future the euro area will be a place of enduring financial stability. There are three key points:

Firstly, all euro countries will introduce a new constitution-level budget rule or “debt brake” setting limits on expenditure. Germany, Poland and Spain have already done so. In 2011 this Federal Government succeeded in cutting the borrowing requirement to some 17 billion euros. Under the previous Government, the 2011 borrowing requirement had been put at 72 billion euros.

Secondly, if EU member states violate the budget parameters set out in the Maastricht Treaty, sanctions will be imposed automatically. So everything possible has been done to prevent the sanctioning of those running excessive deficits being interfered with by considerations of what’s politically opportune.

Thirdly, we will expand economic policy coordination within the eurozone. We are now taking the steps towards the creation of a political union which were not yet possible before.

We’re starting a paradigm shift. Public debt has reached its limits.

Growth cannot be bought on credit. The key to increased growth is competitiveness.

It’s up to member states themselves to create a growth-friendly environment – by introducing ambitious reforms in the areas of old age pensions, infrastructure and the labour market as well. In some EU countries youth unemployment is over 40%.

The internal market: this is where the greatest potential for growth lies. Extending the scope of the internal market to new sectors offers tremendous opportunities. That applies in particular to the digitized economy, online trade and the energy sector.

Free trade: in today’s world, free trade is becoming more and more important. The European Union and the Federal Government are extremely keen to conclude further free trade agreements.

The global balance of power is shifting. China is now the world’s second largest economic power. Brazil has overtaken Britain as the world’s fifth largest economy. By 2015, 90% of global economic growth will be generated outside Europe. In the Baltic Sea Region Russia is about to start a modernization phase. We as partners in the Council of the Baltic Sea States are prepared to play a part in this.

There was a time when the emerging economies depended on the economic performance of the industrialized countries. Today the industrialized countries’ economic performance depends on the dynamism of the emerging economies.

In a world of some seven billion people, new global challenges, too, can be effectively tackled – in the areas of energy, natural resources and climate, for example – only by working with these new major players.

We need to forge partnerships with the world’s new economic and political powerhouses. Turning towards new partners of course doesn’t mean turning away from our tried and trusted closest partners.

Germany is a big fish in Europe. In the world, however, it’s quite a small fish. Even an economically strong country like Germany cannot compete with new players on its own. That’s why we need an economically strong and politically united Europe. That’s why we need more Europe and not less Europe.