{"id":24449,"title":"Roadmap 2030: 3 Ways to Ensure the German Economy\u2019s Competitiveness in the Coming Decade","link":"https:\/\/bst-europe.eu\/de\/globalization\/german-economy-challenges\/","date":"13. Dezember 2019","date_unix":1576251215,"date_modified_unix":1584454571,"date_iso":"2019-12-13T15:33:35+00:00","content":"<p><em>German Economy: The catching-up of emerging markets (especially China); demographic change; and digitization are the three central challenges that could have a significant impact on Germany\u2018s competitiveness in the future. Germany must be better prepared for this. Germany can focus on <b>three fields of action<\/b> to achieve this: <\/em><\/p>\n<ul>\n<li><em>securing its <strong>competitiveness<\/strong>; <\/em><\/li>\n<li><em>creating stable framework conditions in the EU; <\/em><\/li>\n<li><em>and supporting a rules-based international order.<\/em><\/li>\n<\/ul>\n<h2>Securing Germany\u2018s future competitiveness<\/h2>\n<p>In order to survive in international competition in the future, <strong>productivity<\/strong> in Germany must be increased. This is the only way to secure jobs, and thus income, in Germany, otherwise products manufactured in Germany will no longer be in <strong>demand <\/strong>by consumers \u2013\u00a0 abroad or domestically. In view of the expected <strong>aging of society<\/strong>, higher productivity increases are urgently needed. The entire education system needs to be looked at, starting with early childhood education via general schools, the dual <strong>vocational<\/strong> training system and the entire <strong>higher education system<\/strong> through to <strong>learning<\/strong> in adulthood.<\/p>\n<p>A nationwide quantitative and qualitative expansion of childcare, particularly in the under-three age range, is also an important basis for ensuring the employment of both men and women and continuing to support the now rising<strong> birth rate<\/strong> in Germany. In addition, increased investment is needed \u2013 both in the private and public sectors \u2013 because high productivity requires not only a well-trained workforce, but also efficient <strong>machinery<\/strong> and <strong>technology<\/strong>.<\/p>\n<h2>Create stable framework conditions in the EU<\/h2>\n<p>Germany needs a long-term stable EU with a <strong>stable Euro<\/strong>. If necessary, transfer payments will be necessary to prevent the Eurozone from disintegrating. As mentioned above, a further measure to stabilize Europe\u2018s economy is to reduce Germany\u2018s high <strong>export surpluses<\/strong>, which are increasingly met with criticism in the rest of the world (see Petersen 2015 for the following remarks).<\/p>\n<p>In other European countries, accusations have been growing that <strong>German exports<\/strong> are displacing domestic products, and thus increasing <strong>unemployment<\/strong> in the affected countries. There will be no automatic reduction of German export surpluses within Europe because membership of the monetary union means that there will be <strong>no appreciation<\/strong> of the German currency, which in terms of a flexible exchange rate for the individual European currencies would<strong> reduce this surplus<\/strong>. However, the necessary reduction in Germany\u2018s current account surpluses should not be so <strong>abrupt<\/strong> as to lead to massive losses in production and employment in Germany. Such an economic loss would cause Europe to lose its \u201c<strong>economic upswing locomotive<\/strong>\u201d. As a result, other European economies would have to accept economic loss as well. No one would benefit from this development.<\/p>\n<h2>Support a rules-based international economic order<\/h2>\n<p>As an export-oriented economy, Germany has a central interest in functioning world trade. Germany should support the expansion of<strong> free trade<\/strong> and help to shape corresponding agreements. Ideally, this should be done within the framework of a multilateral agreement such as the World Trade Organization. However, this is currently undergoing a difficult reform process. The second-best alternative, is therefore<strong> regional free trade agreements (FTAs)<\/strong>, in order not to have to do without an intensification of international trade. Examples for FTAs include the <strong>EU-Japan<\/strong> and the <strong>EU-India FTA<\/strong> (see figure below for the potential welfare effects of the latter).<\/p>\n<p>Central principles of the social market economy, such as labor, social and environmental standards, must be considered in the negotiations of these agreements. Within this framework, Germany should generally advocate <strong>open markets<\/strong>, but at the same time make it clear that reciprocity and fair competitive conditions are central prerequisites for this. If a global economic actor, such as China, systematically violates them, measures should therefore be possible to <strong>protect<\/strong> German and European interests from <strong>unfair competition<\/strong>. In general, the principle of non-discrimination must be upheld.<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN.png\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\" ><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24451\" src=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN.png\" alt=\"Effects_EU-India_FTA_EN\" width=\"2150\" height=\"1299\" srcset=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN.png 2150w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN-300x181.png 300w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN-1024x619.png 1024w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN-768x464.png 768w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN-600x363.png 600w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN-1536x928.png 1536w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/12\/Effects_EU-India_FTA_EN-2048x1237.png 2048w\" sizes=\"auto, (max-width: 2150px) 100vw, 2150px\" \/><\/a><\/p>\n","excerpt":"<p>German Economy: The catching-up of emerging markets (especially China); demographic change; and digitization are the three central challenges that could have a significant impact on Germany\u2018s competitiveness in the future. Germany must be better prepared for this. Germany can focus on three fields of action to achieve this: <\/p>\n","thumbnail":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/10\/AdobeStock_149599830_KONZERN_ST-MT.jpeg","thumbnailsquare":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/10\/AdobeStock_149599830_KONZERN_ST-MT.jpeg","authors":[{"id":2725,"name":"Cora Jungbluth","link":"https:\/\/bst-europe.eu\/blogger\/dr-cora-jungbluth\/"}],"categories":[{"id":152,"name":"Globalization","link":"https:\/\/bst-europe.eu\/category\/globalization\/"}],"tags":[{"id":151,"name":"Publications","link":"https:\/\/bst-europe.eu\/tag\/publications\/"}]}