On my way to the airport, I usually come past this publishing house building, where I see Stephan Balkenhol’s sculpture of a person walking along a high wall. Its official title is “Balancing Act”.

Mr Döpfner, when this work of art was unveiled over 16 years ago, you said: “Dealing with the freedom gained will always entail uncertainty and unsteadiness – in other words, a balancing act.” And of course, that still holds true today. In the balancing act to preserve this freedom, we currently need to take more care not to be thrown off course than we have had to in a very long time.

We are experiencing war in Europe and witnessing the crumbling of the postwar order. Global power relations are being reshuffled. Certainties with which we grew up for generations are being shaken to their very core. And this also includes the transatlantic relationship, which I firmly believe nevertheless remains the guarantor for our common security.

At the same time, we are observing a great-powers conflict between our ally, the United States of America, and the People’s Republic of China – that is, between our two largest trading partners outside Europe. In this conflict, economic ties and energy relations are being overtly exploited for political ends. State subsidies are being deployed in a targeted way and supply chains are being systematically exploited in order to attack the German and European industry basis on a massive scale.

We can feel this very clearly. We literally need to defend our place in the world! Our security is in danger. Our prosperity is in danger. Our freedom is in danger.

To sum up, the situation in which the world finds itself has not been more threatening, crisis-ridden or challenging than since the end of the Cold War. The old foundations are becoming ever weaker, and we need to rebuild while the ground below us is still shaking. After the fall of the Berlin Wall, there were great hopes that the world would agree on democracy and free-market capitalism. Unfortunately, the opposite is true. The forces that should actually bring the world closer together, namely trade, energy, technology and information, are instead being used to divide it at times.

Ultimately, the markets curb ideological excesses and economic reality restricts political maximalist positions in the long term. But in the short term, the impact of misguided policies is unfortunately often not felt. That is why we must think about how to respond politically to economic coercion, without distorting markets ourselves. In an age of the supposed primacy of geopolitics and great powers, we must constantly remind ourselves about this.

And that is why I am also grateful to have the opportunity to discuss these topics with you shortly. In your firms and projects, you, too, face the challenges of a balancing act.

We are meeting here today in a building where the term “disruption” is frequently heard. I just described the global situation, which is characterised by great disruption. Much of this is negative, but of course some disruption is also necessary and indeed even beneficial. As business people, you are familiar with this. And let me say that in the international system, we need to reform our world order, which has developed over the course of decades. Disruption that adds value is the task of the business sector, not of the political sphere. It requires entrepreneurial courage and creativity. The political sphere must provide a reliable framework for this and defend a level playing field to the outside world, too. And this means that when others call partnerships into question and exploit trade relations, then we must deliberately position ourselves as an alternative and a reliable global partner.

Although the German economy is demonstrating greater resilience than many expected of it, Germany on its own will only overcome this phase by liaising closely with its partners and engaging in global partnerships worldwide with partners who do not share our values in every single way, and perhaps think very differently to us, but who have the power to shape things geopolitically and geoeconomically. Partners, who, for their part, have an interest in resilient and reliable relations. And indeed, that is what we can offer.

However, these partners won’t wait for us, and nor will their markets for cutting-edge technologies ranging from AI to cleantech. Moreover, these partners have no qualms about doing business with other countries that harm our interests. But that is precisely why it is so important to build up these relations. And we are doing that.

Something I repeatedly notice on my trips is that Europe is a very important argument here. We got good news from New Delhi this morning. Following intensive negotiations, the EU and India have reached consensus on a free trade agreement. This is an absolute gamechanger. We are talking here about a common market with a population of almost two billion. Naturally, this has enormous geostrategic potential. And at the same time, the EU and India are sending a strategic message on free trade at a challenging time. And this also shows that we stand together as democracies. We now need to ensure that German companies can make use of this huge potential by formally finalising the agreement now that political consensus has been reached. This demonstrates that the EU is able to act and that we are a reliable and sought-after partner.

With regard to Mercosur, let me say that it is almost incomprehensible that we are now struggling to get to the finishing line. However, we are doing everything we can to ensure that we can provisionally apply the Agreement once it has been ratified by the first Mercosur country. The political will in Europe to do so is unwavering. And it is very much thanks to the Chancellor, who liaised closely with European partners, particularly Italy, that we have taken a crucial step forward.

However, strengthening these global partnerships is just one side of the coin because despite declining exports, particularly to the US and China, and a difficult situation in the ASEAN countries, German exports increased slightly overall by 0.25 percent by the third quarter of 2025. Why?

Because our exports to Europe in particular – to the EU, but also to neighbouring countries such as Switzerland, the UK and Norway – rose by just under three percent during the same period and because our service exports increased by as much as 3.3 percent. This is not a boom, but it does show that we need Europe.

And that brings me to our actual strengths – German and European strengths, which count for twice as much in these uncertain times and are less showy than subsidies, but more sustainable. These strengths are continuity, stability, the rule of law, a level playing field and the protection of intellectual property, especially in the age of artificial intelligence.

During my trips, in talks with partners beyond the US and China, in India, Indonesia, Japan and Bolivia – and most recently, in Ethiopia and Kenya – I constantly hear the same refrain: reliability beats arbitrariness! And these countries make up almost 60 percent of global economic output.

We Europeans offer access to the single market, but we want our companies to be treated fairly in return. We are choosing resilient openness over protectionism. We see and share your concerns about Germany as a location for industry. And we have the tools we need to address them. The EU will not stand by and watch as its supply chains and markets become the pawn of geopolitical ambitions.

On our own, we, Germany, would be too small globally. That is why we must now shape Europe in such a way that it is of even greater benefit to the German economy in the long run. Over half of our trade is already with EU partners. Trade volume within the EU is six to seven times greater than our trade with China – and also much greater than with the US. Just think about it: our trade volume with the Netherlands was only a fifth lower than with the United States.

A study by the International Monetary Fund shows the potential still slumbering here. Complete integration of the single market, particularly in the service sector, could increase EU GDP by three to four percent and create 3.6 million new jobs in the long term. If we also dismantled internal barriers in goods trade and multinational production, EU GDP could rise by as much as seven percent.

The costs for cross-border services currently reflect a de facto tariff of 110 percent. It’s as if we were putting obstacles in our own way. Removing these obstacles and integrating the capital markets would significantly increase productivity – and reduce the gap between Europe and the US as regards GDP per capita.

And of course, another thing is also important here, namely cutting red tape and reporting obligations that create unnecessary costs. The European Commission is aiming in the right direction with its omnibus package on simplifying regulations, particularly in the field of sustainability reporting, and on increasing competitiveness. At the national level, we are heading in the same direction with the Federal Government’s modernisation agenda aimed at reducing the business sector’s bureaucracy costs by 25 percent and cutting compliance costs for companies, the public and the administration by at least ten billion euro.

The image of a balancing act applies here, too. We cannot allow ourselves to be fooled by verbal window-dressing. In the front row, Eurosceptics promise freedom from bureaucracy, while in the second row, the foundations of our prosperity – our openness to the world and the stability of our institutions – are already being undermined. We must draw a clear line. We must say “yes” to streamlining and cutting red tape and “no” to calling European integration as a whole into question. Those who encourage populist forces could wake up tomorrow in an isolated country – without skilled workers or reliable partners.

In this regard, I am also counting on you to help raise awareness of this among the general public. In the end, it always comes down to a balancing act.

Thank you for listening.