Welcome

Speech by Foreign Minister Annalena Baerbock at the Business Forum of the 20th Conference of the Heads of German Missions

06.09.2022 - Speech

I’m glad that we can finally meet here together in person once again.

I’m pleased that this is the case, although it feels a bit like it’s the wrong way round. Since becoming a politician, I’ve been on dozens of company visits.

I can’t tell you how many assembly lines, laboratories and turbines I’ve admired. Today, for the first time, it’s the other way around.

All of you, as representatives of business and industry, are coming to see us at the Federal Foreign Office. I’m very pleased that you’re here – a warm welcome to you all!

Unfortunately, we cannot offer you yellow hard hats here, or indeed blue or green ones. But we’re also doing a kind of factory tour today and this week, with our ambassadors and with our premium products: foreign expertise, foreign trade and investment policy and climate diplomacy.

With this in mind, I cordially invite you to take a close look at these products both today and in the coming days.

Only a few years ago, when I visited companies, I had to point out in a friendly manner, at times a little more vehemently, that it wouldn’t be a bad idea to get the experts from the sustainability department on board, because the many questions about CO2 emissions weren’t always immediately answered by the upper echelons of corporate management.

Today, CEOs present their sustainability plans themselves. I think this is a genuine step forwards that’s indicative of the positive direction we’re heading in together.

As we all know, the business of the future is climate-neutral.

And if the business of the future is climate-neutral and if the question is no longer whether, but how we go about this, then it’s up to us now to define this path to the future together.

Joseph Beuys once said the following: “The future we want must be invented. Otherwise we will get one we don’t want.”

And I believe that’s precisely what we must do. We have to decide now what our future should look like. I said yesterday that we must spread our wings and self-confidently determine our flight path and not hope that tailwinds will somehow propel us.

Because otherwise – as we have now experienced in a brutal way – the headwinds will be fierce. And these headwinds aren’t just coming from the Russian side, but also from the climate crisis, because for far too long we didn’t spread our wings self-confidently, but hoped that the climate crisis wouldn’t be all that bad.

The climate crisis is threatening millions of lives. My most poignant trip in the last eight months was to the Sahel. Sweltering at 48 degrees Celsius in the shade and being told that there were once cotton fields in Mali 30 years ago and now all you see is dust and drought – the impact of this climate crisis is palpable.

It’s palpable that it’s the greatest security threat to this region – and, if we don’t get a grip on it, to our region as well in the future.

The impact of the climate crisis manifests itself as extreme drought in some countries and in the form of water in others. We’re currently witnessing in a dramatic way that a third of Pakistan is under water.

And, at the same time, alongside this climate crisis, war has been raging right here in Europe for six months.

People in our country are rightly worried about their security, about global security and about the future of Ukraine. Food prices are rising, as are energy prices.

That’s why it was such an important signal that we, the Federal Government, adopted a third relief package at the weekend. This not only helps people who don’t know how to pay their electricity or gas bills, but it also sends a clear message to the Russian regime that we will not be divided.

We will not be divided – not only in our country. We will not be divided on the energy issue in Europe.

In the latest relief package, too, we always had the global perspective in view. That’s why the 65 billion euro set aside to relieve the situation in Germany also includes one billion euro for the Global South.

We’re also aware of the concerns expressed by the business world, which are great. Many entrepreneurs have bent over backwards to get through COVID-19.

And now energy prices are so high again that they don’t know whether they should rather close down operations than continue to keep their businesses open.

That’s why we’re also supporting companies and the municipal utilities with the relief package, because they also have concerns and fear for the future.

All of this is founded on the principle of solidarity. I’m very grateful to those of you who have made it clear that if we relieve the burden together now, if we stand together now in solidarity, as a society, as consumers, but also as businesses, then it’s only right that even windfall profits can be tapped into.

The German business community has spoken clearly and unequivocally in the run-up to this relief package. Thank you so much for doing this.

Because one thing is clear, which is that we will only be able to tackle this brutal Russian war of aggression, just like the climate crisis, together as a society and in the synergy between politics and business.

The world in which our children grow up will depend on the responses we find to these crises, on how we define our future together.

Ms Maurer, you recently said quite clearly that if we want to define our future, we have to change course in a number of areas.

For me, it’s clear that we need a joint effort by society as a whole here, with an innovative, resilient German business sector.

This means that we don’t just think sector by sector, but that we think of industry and business as two sides of the same coin, just as we, the Federal Government, have resolved to move away from the compartmentalised mentality of each individual ministry, thus making climate policy a focus across all ministries, for example.

That’s why climate diplomacy is also firmly part of the Federal Foreign Office’s remit, because it is, of course, the main task of German foreign policy to counter, from within our ministry, the greatest security threat of our time.

It’s precisely this integrated approach to security that is the focus of our National Security Strategy, which we’re currently in the process of drafting.

I’m most delighted that many of you were actively involved in the first rounds of discussions on this. After all, this Security Strategy will clearly state the fact that Russia’s war of aggression not only catapults our security, but also the German economic model, into a new era.

As an exporting nation, we remain committed to openness and connectivity. But we’re also coming to grips with something that many in this country have long ignored, namely that interdependence also involves risks. And that trade is not necessarily followed by democratic change.

It’s therefore clear to me that the 2020s will be a decisive decade for the German and European economic model.

We must, and we will, define our flight path here at the Federal Foreign Office, together with the Ministry for Economic Affairs and Climate Action, together with the Federal Chancellery, together with the Federal Government.

I’d like to address two areas in which change is particularly fundamental. Firstly, in climate action. By investing in climate action, we’re also unlocking innovation in the future. Those who miss the boat now will lose out. And the good thing is that this realisation is already there.

So the question isn’t whether Germany should play an active role in the markets of the future, but how we do this and how fast we do this.

Time is the key factor here – not only with a view to the 1.5 degree limit, but also with a view to where the markets of the future will be based.

The example of steel shows how profound this change is, because it’s akin to the lifeblood of German industry.

But also because there is this long tradition, and because in the beginning there was resistance to intervening with regard to CO2 threshold values and CO2 emissions. And then it was precisely this industry, when there were excess capacities in the global steel market, that began to acknowledge that if we don’t tackle this change head-on now, if we don’t see the issue of climate action as an opportunity, then we won’t stand a chance on the international stage.

For decades, steel was one of the motors of Germany’s economic miracle. But steel production also took and continues to take its toll on the environment with its smoking chimneys and its virtually unquenchable thirst for energy.

And now German companies and sites operated here in Germany by global companies are leading the way on how we can recycle steel in a climate-neutral way in the future and what CO2-neutral steel production with the help of green hydrogen could look like.

Thyssenkrupp wants to produce climate-neutral steel by 2045, and Salzgitter AG is working on well-nigh CO2-free steel production.

When I visited these various locations, we often talked about how quickly this will happen. That’s also one of the most important things we have to understand in this profound crisis – for example the question as to how quickly the wind turbines will be built. What’s happening right now, the fact that we have to break free from Russian fossil fuels in very short order, also means that debates that took up much of our time in recent years are fortunately no longer being held.

It’s clear that if we want to become climate-neutral, then we must speed up the expansion of renewable energies quite considerably.

The acceleration act, also for the expansion of wind power, is not only a response to the brutal war in Ukraine, but it is also, at long last, the response that we need to transform the German economy, this innovation.

That’s why steel is a good example. Firstly, people all over the world associate steel with Germany. But, secondly, if the steel sector can do this, then other sectors in our country can do this, too.

This is important because, of course, millions of jobs depend on these energy-intensive industries in Germany and across Europe. This makes the question of the green transformation a profoundly social issue.

It means that this joint effort, which we have launched with the relief package, must also be tackled together in this area.

We will only manage this transformation together as a society. And that’s why it’s important for us as politicians to offer you parameters and support you along the way by promoting development and innovation – reliably and with foresight.

And by identifying untapped potential from an early stage. Not only in Germany, because, unfortunately, we don’t have that much space here.

But we must, above all in our immediate neighbourhood, actively work on a foreign trade and investment policy that acknowledges the potential of the green transformation, especially in Europe.

It was with this in mind that I opened Kosovo’s biggest wind farm in March. This wind farm supplies electricity for 100,000 households – clean and green energy – and is also one of the largest foreign investments in Kosovo’s history – with strong backing from German companies.

We have just signed a cooperation agreement with Namibia to promote the development of green hydrogen.

And Jennifer Morgan said a few words about our energy partnerships just now. After all, it’s clear to us that we don’t have the time to say let’s try this out in each of the more than 190 countries and see what works in the end.

Maybe we could have done that 20 years ago. Now we have to strategically go where the greatest potential is.

Be it for the expansion of renewable energies or where we can reduce emissions the fastest, because countries are still so strongly dependent on fossil fuels.

This strategic alignment informs our foreign and security policy, especially in the G7 context.

In the EU, we’re facilitating investments in Africa to the tune of 150 billion euro over the next five years. And smart policy these days means seeing the climate crisis and our geostrategic challenge as two sides of the same coin. This is about making investments where we can achieve the most for our climate goals. But this is also about investing where it’s clear that we’re providing geostrategic responses.

We will only be able to do this if we act together as Europeans. If Germany turns to one country and France to another and one of us then also cooperates with the Chinese as well, then that’s not a geostrategic approach.

And so I have an important message for you at this juncture: we have a joint responsibility here not only to look at short-term investments, but to define our flight path in such a way that we don’t have the same problem in 20 years’ time that we’re facing today – that we then say if only we had thought about things more strategically.

That’s why we’re trying to coordinate our investments as Europeans in the context of the G7 as partners with shared values, with partners in the US and the UK, but also with our Japanese friends.

Of course, it’s also true that we’re all competitors at the end of the day. So it’s not all smiles and sunshine.

But we should think about crucial aspects together: how can we take advantage of this situation geostrategically in such a way that we support each other as partners with shared values? This conviction lies at the heart of our foreign trade and investment policy.

The potential here is enormous. So there’s no need to worry so much about competition.

Overall, experts estimate that power generation in Africa will double by 2030. Making this expansion climate friendly is an opportunity for all of us.

Our network of missions abroad will support this transition around the world.

As part of our foreign policy, we are therefore turning our missions abroad into climate embassies, whose key tasks will include linking up climate and economic diplomacy.

On the one hand, they will monitor climate policy in the respective countries, advocate our position especially in the run-up to the Climate Change Conference, implement projects on the ground accordingly with our partner governments and also act as a central point of contact for you as German business representatives.

And this is the time to point out that of course we, the Federal Foreign Office, in our role as ambassadors are on board. We will make our contribution with our own ministry and want to be climate neutral by 2025.

Supporting the green transformation will be a core task of German foreign policy in the coming years. That is why we are also working now on a climate strategy for export guarantees so we can use Euler Hermes to promote more climate-friendly projects.

At the same time it is clear that our efforts in Germany alone will not be enough to halt climate change.

We will prevent our successes being undercut by firms from other countries who are doing less to mitigate climate change. That in turn is the reason why we are developing suitable instruments in the EU as clear parameters for investments which Europe now has to make in climate neutrality.

Because we do not consider regulatory law to be something that punishes or disadvantages German industry. In fact, regulatory law, used smartly, helps create a level playing field to underpin a strong social market economy and promote German industry and the European internal market.

After all, we have seen all too often in recent years what it means when others fail to respect the rules, when rules are broken.

This brings me to my second point: our National Security Strategy is going to strengthen Germany’s economic resilience, as reliability is the best way to rule out the risk of supply chain disruptions, the best way to avoid unpleasant surprises.

We remain dependent on partners who do not offer this reliability. COVID-19 made us painfully aware just how vulnerable our global supply chains and our foreign trade are.

Russia’s brutal war of aggression is another case in point, albeit in a different sphere. 600 international businesses have left the Russian market in the last six months. Siemens closed its doors after 170 years. Many of you have had to take similar painful decisions. So I would like to take this opportunity to say in all clarity: it was important that you, the German business community, took your decisions in concert with us and embarked on this shared path.

If we had become embroiled in a heated debate about this sanctions package, about whether we could stay a bit longer, it would not have been the powerful response it was.

As important and significant as I considered this step to be, I would also like to make another point here because I have talked to some of you a lot about the Russia question in recent years: please let’s make sure we don’t just stand together in the face of this brutal war of aggression and read the writing on the wall, let’s also draw the right conclusions from recent years.

I don’t want to get into Nord Stream 2 now and who was right when and how. That’s water under the bridge.

But I do want to talk again about gas storage. The Federal Economics Minister pulled off a great feat by doing everything to enable us to fill our gas storage facilities as much as possible, meaning we now have levels of around 80 percent.

But criticism has rained down on the Federal Government. Some called for us to announce a full gas embargo or an oil embargo. The German Chancellor, the Economics Minister and I as Foreign Minister have always said that we do not want to repeat the mistakes made in the past by German politicians and promise things we can’t deliver.

And that is why we said that we cannot completely phase out fossil fuels from Russia from one day to the next.

Particularly at European level, that did make us the target of considerable criticism. But it was right because we chose a path where we phase out step by step and in turn ensure that we have energy supplies for the winter.

But it costs a fortune.

This is German taxpayer’s money, money that we generate together. And that is why with regard to gas storage I would like to say: It was not all that surprising that storage capacity went down to one percent. It was actually predictable on closer examination.

The swap of storage facilities was also not an act of God. By chance I visited the Yamal Peninsula in Russia just before with a Bundestag delegation. People there, even the German business representatives on the ground, spoke very bluntly about what was to happen with North Stream 2 and what that meant for storage facilities.

In 2013 preparations were made for a potential swap between Gazprom and Wintershall, a subsidiary of BASF. That was then put on hold in 2014 due to the annexation of Crimea. And in 2015 the Minsk negotiations were taken as proof that the problems had been “ironed out”

No-one has a crystal ball. But we can learn from the mistakes of the past.

Simply keeping your fingers crossed and hoping that everything will be fine has a high price-tag and other people are currently paying with their lives.

That is why, looking to the future, we have to be clear that gas from Russia did not actually ever come cheap. At times, the price might have been low. But what generated this low price were blind dependencies or infrastructure swaps which in fact posed a security risk.

We paid for every cubic metre of Russian gas twofold and threefold with our national security.

The Kremlin thinks it has more leverage now, as the ever more blatant attempts at blackmail prove. Recently they presented spurious technical grounds. Now those in the Kremlin are citing our sanctions as a whole which are apparently impeding further gas deliveries. We must state in all clarity that we will not accept this blackmail.

That is why there is no going back, also not in the energy sphere. It is Russia that is threatening our energy security at this time. The only way to counter this threat is to liberate ourselves once and for all from this dependency on fossil fuels. We are working all-out on this.

And the good thing now is that we are searching for alternative energy sources together with all of you. We are building new energy and climate partnerships. But what is crucial is that these energy partnerships now need to be reliable. That is why we are looking very carefully what countries and regions we take as partners so that the economic toll is never again so high.

Firstly with a view to our climate targets when we conclude energy partnerships: particularly when it comes to LNG, it is clear that this will change to green hydrogen in the future.

This is the only path we are pursuing with our new energy partnerships. And the second point is: we need to have reliable partners. Simply keeping our fingers crossed and thinking it won’t be all that bad with these autocratic regimes, is a mistake we can’t afford to make a second time.

And that is also why for the first time we are developing a China Strategy as a separate, self-contained element of our National Security Strategy. For the Federal Government and for me it is important that we use our dialogue to anchor what we have learnt from our dependency on Russia in the China Strategy.

In recent years, key voices from industry have presented various thoughts which are feeding into our work. They are in close dialogue with the Economics Ministry. But it is important that we don’t ignore what is currently happening and that we realise things are different than they were ten years ago.

China is still blocking almost all imports from Australia on political grounds. Last winter, Beijing issued a trade embargo against Lithuania. We should not simply paper over this.

Not with regard to our China Strategy and I hope also not with regard to your future economic activities. We, and I believe also you, cannot afford to act following a “business first” mantra alone, without taking due account of the long-term risks and dependencies.

That is why for us, for the Federal Foreign Office, for the Federal Government it is clear that the broader the base of the German economy, the more stable it is. Particularly in the Pacific region, there are many countries where cooperation makes sense.

It is no coincidence that Apple is currently relocating part of its manufacturing to Viet Nam.

Also for us at the Federal Foreign Office, this means stepping up our contacts and our relations in this region.

To give you the opportunity of tapping new markets there more easily, we will press ahead with our trade agreements also with a view to setting global sustainability standards in this very region.

To make our supply chains more secure and reliable, we are strengthening Europe’s political, economic and above all digital sovereignty, for example with the European Chips Act.

We are investing hugely in semiconductor production and also here we will work together with other global partners. Of course when it comes to this key sector, you know better than me what is actually going on in our German factories when semiconductor production falters. None of us can afford to let this happen again.

That is why we are working, now in our National Security Strategy and the China Strategy, to look at each sector individually.

We have talked to you a lot about this.

But we are not just talking about chips. The same holds true for critical raw materials. For e-car batteries alone, Europe will need around 18 times more lithium by 2030.

Most of the lithium used in the EU – 78% – comes from Chile. But before the lithium arrives with us in the EU, it is processed in China. It isn’t just that this is anything but good for our carbon footprint but it also makes clear that even if the original product comes from another country, supply chains are not automatically secure.

I spoke yesterday to one of our Ambassadors to South America about precisely this question.

He quoted figures which are only somewhat reassuring. There are eight firms sourcing lithium in the region. There is also cooperation between France and China. But not a single one of these eight firms is German.

All in all, we will not just need to look where are raw materials are actually coming from, but also what companies are active in the respective countries and what cooperations are in place. And we will also have to engage in discussions with our European partners on this.

I very much hope that you will continue your intensive involvement in this process. After all, it is important to look at each individual raw material and identify dependencies in each sphere.

Thankfully, the European level has at least moved more quickly than we have in recent years in Germany. The European Commission regularly analyses dependencies and potential supply risks for the EU.

I have studied this European analysis in detail and to my mind everyone should take a look. The list of raw materials is, I admit, very long but it is also very interesting.

Analysing this together with our European partners is our central task as German politicians, European politicians and as the European business community.

After all, for 75 to 100% of almost all metals, particularly those which are key to the energy transition and which are only set to grow in importance, the EU is dependent on imports.

The EU sources 85% of its niobium from Brazil, 68% of its cobalt from the Congo and 98% of its borates from Turkey.

Here, too, we have 98% coming from one country – a very high degree of dependency.

What is more, in other spheres, particularly when it comes to rare earths which are crucial for magnets for electric motors and generators, 98% of EU imports come from China.

I have bombarded you with figures but the message is simple: raw materials partnerships are going to be important. That is why we have just worked hard to launch such a raw materials partnership with Australia in precisely this sector.

Rare earths are also mined there. China is not the only source.

Moving on from raw materials, we see the situation is similar when it comes to precursors.

Here, too, we see a worrying level of dependency on individual countries. According to International Energy Agency figures, China’s share in global production of key elements for solar panels, polysilicon and wafers is approaching 95%. This also needs to feed into our Security Strategy. We’re not just talking about raw materials but also about precursors. After all, part of the EU’s economic sovereignty is our ability to make our markets secure. Our ability to ensure we are not dependent on one single actor and to protect our markets from unfair competition.

That is why in the EU we are going to prohibit the import of products of forced labour. Values and interests are not opposite poles, but are two sides of the same coin. The best way to protect investment for businesses is to provide rules they can rely on. We know that lasting prosperity and security can only materialise in the medium and long term when people’s rights are upheld.

Yet all these steps can only flank your decisions, ladies and gentlemen. I am more than aware of that.

Here, politics is setting parameters. But I also believe that these parameters offer opportunities to provide the best possible protection from the risk of supply chain disruptions.

“The future we want must be invented.” That’s how Joseph Beuys put it.

It isn’t just than I am relying on you.

But through our many conversations not just in the last eight or nine months but also the years prior to my taking office, I have been impressed by your creativity, your spirit as entrepreneurs, also by your courage to try something new. We can build on all this together.

To make our society fit to weather the hardships that will define this decade – from the climate crisis to dealing with authoritarian regimes.

I am convinced we will succeed if we embark on this journey together. After all, we shouldn’t downplay our strengths. We can gather the best and brightest minds from 27 member states of the European Union and together develop the best solutions.

Europe is a giant when we stand together.

Let us spread our wings together as Europeans. Let us together define the future in this spirit. So that others don’t do it for us. Thank you very much.

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