We’ve got to keep on setting the standards!” – Interview in Produktion with Foreign Minister Westerwelle on the euro crisis

12.01.2012 - Interview

Foreign Minister Guido Westerwelle on the euro crisis. Published online in the trade journal Produktion (www.produktion.de) on 12 January 2012

Lots of businesses are worried by the euro crisis. What chance do you think individual European countries would have on their own, given the increasing economic power wielded by countries such as China, India and Brazil? And what role would the collapse of the euro play in this context?

The answer to both the debt crisis and the rise of new powers is one and the same: we need more Europe, not less. By taking Europe one step further and making it an internationally competitive stability union we are creating the conditions needed to overcome the crisis for good. The stability union will oblige Europe to exercise greater budgetary discipline. It will simultaneously strengthen the European institutions. They will monitor the pact and will be able to intervene if rules are broken – without politics getting in the way. I am certain that this way we will be able to win back confidence in the euro as a stable currency.

Could Germany and the EU end up as the losers of globalization?

Globalization is an economic, political and social reality. International trade, investment and cash is flooding into the new economic powerhouses on the world stage. Brazil, India, China and South Africa have more than doubled their share of global GDP over the past ten years. For Europe to remain a power in shaping globalization, it must be economically competitive and politically united. We have to maintain and strengthen our existing partnerships, such as those with our transatlantic partners in the USA and Canada. But if Europe is to be fit for globalization, we also have to enter into new partnerships with the rising economic and political powers.

What advantages do these emerging economies have, in your opinion? What could we learn from them, economically speaking? And what could they learn from us?

Many countries envy us our dynamic, innovative and creative SMEs. German business is well prepared for the challenges of globalization. Few are profiting more than us from the opportunities presented by the rise of the new powers. But it is also true that on its own, Germany would be hard pressed to adapt to the changes brought by these global shifts. If we want to effectively assert our interests and be listened to in the world, for that too we need a Europe that speaks with one voice and continues to rigorously improve its internal market.

How well do you think German businesses are positioned on the international stage?

Germany is one of the leading world economies. Our companies are globally competitive; their products are in demand around the world. German businesses, and in particular SMEs, are doing better now than they have done for many years. Employment figures are at a high, unemployment is going down. All in all, our country has emerged stronger from the economic and financial crisis. The responsible policies pursued by this Federal Government have made a key contribution to this recovery.

What must Germany do in order to preserve its leading position in the world economy?

Above all, it is the highly skilled staff in our firms that enable German business to do so well on the world markets. Germany will only be able to maintain its leading position with its strong industries and skilled trades if we continue to set standards with regard to innovation and creativity. That has to be our starting point. Investment in education and research, as well as in the development and marketing of new technologies, will be crucial if we are to maintain our leading role in the world economy and preserve our current level of prosperity.

What role do German firms have to play, especially industrial SMEs? What, in your view, are our assets? What do we still need to work on?

No country in the world has as many “hidden champions” – global market leaders that are largely unknown to the wider public – as Germany. A competitive, innovative and internationally active SME sector is one of the distinctive features of the German economy which sets us apart from all others. It is the envy of our competitors. It is vital to maintain and cultivate this asset. But to do so we will have to tackle many difficult issues. To name but a few, we will have to continue our campaign to reduce administrative costs for businesses. Due to demographic change, we will also have to make even greater use of the skills and expertise of older people on the labour market. And we will have to improve Germany’s attractiveness to highly skilled foreign workers. An issue of special importance to small and medium-sized firms is creating the conditions for a smooth handover from one generation of owners to the next.

On 25 January you will address the “Congress of World Market Leaders” in Schwäbisch Hall. What importance do businesses that are global market leaders have for Germany?

Without global market leaders Germany would not be one of the most successful and competitive economies in the world. Their economic success gives Germany a greater voice on the world stage. It gives us political leverage – in foreign policy, too – that we would otherwise not have had.

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