Speech by Foreignl Minister Guido Westerwelle at the opening of the Business Forum at the Ambassadors Conference on 28 August 2012 in the Federal Foreign Office

29.08.2012 - Speech

-- Translation of advance text --

My honoured friend the Deputy Chancellor,
Ladies and gentlemen,

I would like to welcome you warmly to this event, especially if this is the first time you have attended a Business Forum at the Federal Foreign Office. I am delighted that interest in our Business Forum has grown every year.

Ladies and gentlemen,

In some countries it is considered natural. But here in Germany its naturalness still needs to be worked on. What I am talking about is the fact that foreign policy and external economic affairs are inseparably entwined. The noble pursuit of diplomacy and the promotion of business are not mutually exclusive goals, nor are values and trade. For in truth interest led and value oriented foreign policy are two sides of the same coin.

For that reason I have made a point of taking action to ensure that the Federal Foreign Office and our missions abroad regard themselves as service points and door-openers for German business. For big firms, this is hopefully a pleasant extra. As a rule, however, the big firms are able to set up and maintain their own offices abroad. For Germany’s Mittelstand, our small and medium-sized businesses, it is not just a pleasant extra, but an absolutely essential service.

The Mittelstand is not only the backbone of our economy here in Germany. It is increasingly becoming the driving force behind our international business, our exports and our global networks. Many ideas originate in small and medium-sized firms, which, in this age of globalization, are becoming more and more active on the international stage. Vocational training is for example something that many small and medium-sized businesses in particular are asked about by their partners abroad, as many of you here today can confirm.

We must consider it natural – as other countries do – for our political relations and diplomacy to open doors for our companies, since Germany lives from its links with the wider world. I still remember the debate in the 1980s and early ’90s, when much of the German business world took the strategic decision to invest abroad. At the time, businesses were criticized for moving assets abroad. Right up until the beginning of the last decade, people said it was unpatriotic as it involved outsourcing jobs abroad. But today we can only be grateful that the German business community was not swayed from its course. If we hadn’t invested abroad before others did, if German businesses had not made so many links with firms around the world, Germany would not be as healthy and strong as it is today. Our international links are one of the key factors on which our country’s reputation and success are built, as is the prosperity we now enjoy in our country.

And that is why it is important to continue thinking strategically, to continue this trend. Foreign policy and external economic affairs are inseparable. This truism is underscored by the fact that I am today opening a Business Forum together with the Federal Economics Minister, something I have already done several times since becoming Foreign Minister. The days of ministry rivalry should now be a thing of the past. It is important for us to work hand in hand. For Germany’s standing in the world most certainly does not depend primarily on military might, but on economic competence, on diplomatic prowess, as well as on the compassion and solidarity we show for other regions in the world which still find the going tough and where the lives of most people are marked by poverty. Germany’s excellent reputation as a business partner bolsters our influence in the world. The successes of German businesses are a factor in German foreign policy. Their successes are in our common interest.

International competition is getting tougher. In this climate, political support is more important than ever for commercial success abroad. That’s why the heads of our 230 or so missions abroad are ready and willing to provide you with advice and help.

Today and every day, they are your contacts in the countries they are posted to. With their networks, their knowledge of local conditions and their tact, they can help clear away a good many obstacles or stop them arising in the first place. That is why I attach so much importance to telling you this, especially those of you who are attending our Business Forum for the first time. Take us up on this offer – don’t be afraid to get in touch. In the age of globalization, the time is past for any artificial divides between diplomacy and economic promotion.

“Europe: the Future” was the title of this year’s Ambassadors Conference.

Both the political and the business worlds are concerned with the future of Europe. The debt crisis has given rise to a crisis of confidence in the European project.

The debt crisis began when too much was asked of states and state spending. But what has emerged, and what was aggravated in the two years following the Lehman Brothers crash, is in truth nothing other than a basic structural problem – that of excessive public debt. Too much was expected of the state, while too little was expected of society. I still recall very well how extremely controversial it was when we passed an austerity plan in early 2010, shortly after taking over the reins of government and after two years of recession with economic growth at -5%. In a democracy it is of course normal to argue about the details of such austerity packages. But the fact that Germany was the first country to adopt such measures, and the scale of the package – making savings of 80 billion euros – was extremely contentious.

Today we can see that we were indeed wise to end the economic stimulus financed by borrowing so quickly, as it were counter-cyclically, thereby also creating confidence in ourselves. If we had not been so quick to stop the excessive spending financed by borrowing, who knows if we might not also have been caught in a psychological downwards spiral.

If we look at the published figures in Europe, and at the figures here in Germany, it is obvious that we are far from complying with the Maastricht criteria. The Maastricht criteria include not just new debt, but also total national debt. And that is why it was and remains important to change course here too. I can only encourage the German Economics Minister to stick to this policy, which is obviously intended to address budget consolidation and growth as two sides of the same coin. I believe this is the right path. We will only regain our psychological momentum when confidence has been restored. We will not overcome the debt crisis in Europe by making it easier to create new debt or by Germany assuming joint and several liability for all the debts in Europe. That would place too great a burden on us. And it would also reduce the incentive for our partner countries in Europe to implement reforms.

We have to justify new confidence in Europe. Confidence in our currency, confidence among our European neighbours, confidence among the citizens of Europe and, last but not least, the world’s confidence in Europe.

That is why it is important to realize that Europe is on trial not only in the eyes of its own citizens, but in the eyes of the world. What the world thinks of Europe for many years to come will be determined by what we do now. Are we to be considered a forward-looking continent by other regions and growth regions around the world? Or will we be viewed as “old Europe”, a continent that can be written off with no ill effect.

Europe’s image and reputation are currently in the forge. We not only need to prove that we can come up with viable European policies, but also that we can convincingly stand up as a community with a shared culture, with a specifically European way of life, in the eyes of the world. In particular, we have to win over the new growth markets and countries with young populations who think that the future automatically belongs to them – and that we automatically belong to the past. This is a problem that we are all faced with time and again. At the heart of any solution is our determination to make it as a European community bound together by a common destiny and a shared culture. For we really are a cultural community, even though many diverse cultures are united in Europe.

Anyone who gets around the world knows that there is a European way of life. Where the individual is worth something. Where security, including social security, is important. And where so called post-material values are respected and treasured, because they are a crucial part of our quality of life.

Confidence is won through action. We have made vital progress since the last Ambassadors Conference. The fiscal compact, the permanent stability mechanism and the growth pact have ushered in a fundamental paradigm shift. We believe there are three key pillars: discipline in public spending, solidarity in Europe and policies that promote growth. But not growth as the product of debt, growth as the product of competitiveness.

The states which were hit worst by the crisis have adopted far-reaching reforms. I would like speak up on behalf of the countries which are currently struggling. On behalf of the countries which are experiencing a low. On behalf of the countries which have been forced to take the stony road of painful reform. Because it is clear that many of these countries are making good progress.

Ireland is making good progress in general and also with regard to a return to the capital markets. Portugal has just achieved a surplus on goods and services for the first time in 70 years. Spain aims to have saved almost 10% of its GDP by 2014. These tremendous efforts and encouraging progress deserve our respect.

But we also have to think beyond the crisis. We have to conduct a Europe-wide debate on the kind of Europe we want to have in the future. We want more Europe. But we also want a better Europe.

There are three crucial issues here. Firstly, we have to correct the euro’s “birth defects”. We have to complement monetary union with closer cooperation on economic and fiscal policy. Secondly, we need to provide Europe with effective and democratically legitimate institutions. We have all noticed that many people are rightly questioning the transparency and democratic basis of European decisions. And thirdly, we need to make Europe a real power in shaping globalization, a power that asserts its political and economic interests with vigour. Those of you who are active beyond Europe’s borders know that this really is a necessity.

It really is something that will go down as an oddity in the history books. Europe with its 500 million people is the richest region in the world. Nowhere else do so many people live in such prosperity. And yet we Europeans have sought assistance from the IMF. We take funds that were intended for much poorer regions, and redirect them to Europe. The fact that Europe needs the world with its many much poorer regions in order to get back on its feet really is rather questionable. On the face of it, and morally speaking, it should be up to us to master the crisis on our own. It’s our problem. It’s our neighbourhood. Other regions in the world are far worse off. I think we have to remind people of that from time to time.

It will be hard work for us. Europe has its price. But it also, more importantly, has its value.

Europe is not just the answer to centuries of war, Europe is also our financial insurance in the age of globalization. It is true that Germany is relatively big within Europe, but it is relatively small in the world at large. Just look at India, where I went recently, and note that in a few years time it will be home to more than three times as many people as the entire European Union. It is the largest democracy on the planet.

Europe has brought us Germans unprecedented prosperity. Last year, almost two thirds of German exports went to destinations in the European Union. We still export more to Belgium than to Brazil. Of the 13 million cars built by German firms in 2011, more than 60% were for the EU market. Some three million jobs depend on our exports to the euro area – jobs that are spread throughout the country, in all federal states.

Let’s take Bavaria as a random example. It is obvious there just how economically dependent we are on our European roots and links. Just raise the issue of withdrawing from Europe and the euro with Bavarian businesses such as Audi, Siemens or BMW. Nobody in Bavaria would seriously favour such a step. In Baden-Württemberg and Bavaria, for instance, exports are so important to the economy that it would be practically unpatriotic, and counter to the states’ interests, if someone in Bavaria for example were to consider giving up Europe or permitting Europe to fray at the edges. That would backfire on us.

Europe is also highly beneficial to us when it comes to trade policy. The European Union presents our interests more assertively than any individual European state would be able to on its own. The free trade agreement recently signed with Korea provides new opportunities for German businesses. We are also seeking to conclude free trade agreements with Japan, Canada, India and Indonesia. The discussions are not always easy, bearing in mind non tariff trade barriers. This is another important area of cooperation between the Federal Foreign Office and the Ministry of Economics.

New powerhouses are emerging in Asia, Latin America and in other parts of the world. They have become driving forces behind the global economy. Their economic strength lends them political clout. Our public debate still focuses very closely on the BRICS countries. But we really need to pay much more attention to the next wave of up and coming countries, which are well on their way into the first league. The Next Eleven are the latest countries to move up a class. Earlier this year I attended a conference with the ASEAN countries. It is fascinating to see how the ASEAN countries are keen to seize their opportunity, as China and India, for example, were a few years ago. It is fascinating to talk to people in Southern economies, in Latin America for example. But even there we are still very much focused on the big players, on the three South American countries that are part of the G20. But the countries in the second row are the new success stories, catching up with breathtaking speed. These countries are not yet fully on our radar. I can only encourage you to pay attention to these up and coming new powers. I think this is part of the same forward-looking philosophy that we fortunately adopted in the 1980s and 1990s, that we don’t only focus on the major players, who we have long treated as equals in the G20, but that we also take account of the next wave of up and coming countries, and seek to strategically include them in our policies and investment decisions through offers of partnership.

The Federal Foreign Office’s strategy paper on enhancing relations with the new global players was adopted by the Federal Government this spring. We want to enhance our relations with these states for our mutual benefit and in line with our shared responsibility for global issues. Climate change, food prices, natural resources and the stability of the financial markets are increasingly pressing issues in a world of seven billion people, issues we all realize can only be addressed at global level. In the age of globalization, talk of repatriating policies would be counter-productive. It would be taking a wrong turn, a step backwards.

Germany is sought-after as a partner across the globe. We have much to offer, for example our system of vocational training. This we are putting to good use, for example with the “jobs pacts” we have concluded as part of our transformation partnerships with North African countries following the dramatic changes in the Arab world. I know that many of you will be curious to talk to our diplomats to learn more about the changes we foresee in specific countries. People still speak misleadingly of the “Arab spring”. A more accurate term would be the “Arab seasons”. For the situation varies greatly from country to country. Some places have seen revolutions which have ushered in a new, healthy stability remarkably quickly. Tunisia is the prime example of this. In other countries, such as Morocco, change has come gradually, and in yet others we can only offer our assistance in the hope that democracy will take firmer root. Egypt, a key regional player, falls into this last category. A meaningful response to these “Arab seasons” – from a business point of view, too – can only be made if we duly differentiate between the countries and take account of the specific situation in each. To fail to distinguish between the situations in Egypt, Tunisia, Algeria, Libya and Morocco would be totally inappropriate and would be as unhelpful as comparing the Arabian Peninsula with these Maghreb countries along the southern Mediterranean coast.

We have established strategic partnerships with China, India, Viet Nam and Indonesia, we have signed raw materials partnerships with Kazakhstan and Mongolia, as well as energy partnerships with Nigeria and, somewhat closer to home, with Norway.

The Federal Economics Minister has taken on a particularly difficult job with the transformation of Germany’s energy system. It is a task that the entire Government will have to work on, but will demand especially much of the Economics Minister. His aim of shifting to green energy whilst also attaching great importance to the affordability of energy strikes the right and necessary balance. But this energy shift is yet another goal that we can only achieve if we work together. The energy won from hydropower in the north, and from wind power here, can perhaps be supplemented by new deliveries of solar power from the south. Supporting the consolidation of this “green battery” is an intelligent project. It is something we can achieve – and indeed must achieve, for the sake of us all.

Tomorrow we set off for the 2nd Sino-German intergovernmental consultations. We want to further intensify our cooperation with China in all fields and will in the process clearly communicate to the Chinese Government our interest in the further opening up of the Chinese market in accordance with WTO rules.

We are very concerned by the protectionist tendencies which we have also observed in many other countries. Protectionism stands in stark contrast to German interests. The German Government will remain a staunch proponent and supporter of free trade, in Europe and internationally.

But if we attach great importance to the protection of intellectual property in other countries, so that our inventions can’t be copied, I would advise us not to raise doubts about the protection of intellectual property at home. This, too, is a question of credibility. Intellectual property must be comprehensively protected, in the commercial sphere as in the intellectual and artistic spheres.

Let me put it clearly once again. Germany lives from its openness and its international and European links, even if this view is perhaps not shared by all actors on the German political stage. This is also why we need a visa policy that reflects this modern, open, cosmopolitan spirit. We need a visa policy that doesn’t put people off, but encourages them to come here. We need a visa policy that encourages not only entrepreneurs to come here, but also young students and school pupils who are interested in our country. We have to dare to be more open. That is a political decision of principle, and I will do all I can to make it come about. But we can also take steps to improve visa issuing practices within the existing framework. We have made significant progress here. For example, we have abolished visa requirements for people from a number of states in the Western Balkans. We are working towards liberalizing visa rules for Russia and Ukraine. Business travellers already benefit from our practice of issuing multiannual visas and from other procedural simplifications. We are working on further improvements to make the visa application process more service-oriented. These include empowering our larger visa sections abroad to receive visa applications, a procedure that will be launched in Turkey in a few days time. In the course of the year, we intend to do the same in Russia and China. This should significantly speed up the process and improve our service. Of course, I am ready to admit that there are still problems, such as over-long waiting times. That’s par for the course. But I can assure you that where we are aware of the problems, and where we are able to, we will tackle them straight away.

But we must remember that these are all practical improvements within the existing framework. What we still need to do is to improve the framework and make changes to our visa policy as a whole.

Ladies and gentlemen,

As the host of today’s event, I would like to say a big thank you to the companies who have supported this Business Forum. My thanks go in particular to Siemens AG, METRO AG, Linde AG, SAP AG, Secunet and Giesecke & Devrient. On behalf of all those present I would like to thank these firms for their sponsorship. We are lucky to have it.

To conclude, I would like to say thank you to you all for your interest in this event, and for listening so carefully to my words. I would now like to take the liberty of making a very personal remark. I know that it is sometimes considered fashionable to make disparaging remarks about Europe. But we must not forget what we have in Europe. It shouldn’t be taken for granted. If we let some of our European achievements come off the rails, are we really to believe that our other achievements, such as freedom of travel, will remain unaffected? What about freedom of investment? Or freedom of movement in Europe as a whole? Things are going well for us, we Germans are doing very well. But that was not always the case. More than 10 years ago we were the “sick man of Europe”. We worked hard to get better. We have to show other countries that it’s possible. We will have to insist that our agreements are honoured. But we will not just have to negotiate firmly, we will also have to treat others with courtesy. In business it’s just the same. You can point out your differences. But you have to do so respectfully. The times when the peoples of Europe allowed prejudice and stereotyping to stand between them must be put behind us. Germany is strong, there can be no doubt about that. But Germany will not remain strong and well in the long term if Europe itself becomes the sick man.

Thank you very much for your attention.

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