Wissmann: Export strength stabilises Europe
German industry drives European economy
Berlin, 10 November 2011. "The industrial sector is once again proving to be a rock of strength in the storm of the debt crisis currently sweeping over Europe. German industry in particular is driving business in Europe. It generates around 26 per cent of the industrial gross value-added in the European Union,” said Matthias Wissmann, President of the German Association of the Automotive Industry (VDA). He was speaking during a panel discussion in Berlin marking the 70th birthday of Martin Kannegiesser, President of Gesamtmetall (the federation of German employers’ associations in the metal and electrical engineering industries). In Germany the manufacturing sector accounts for the largest proportion of gross value-added, i.e. around one quarter; taken together with closely related services, the share actually comes to one third.
The industrial sector provides 90 per cent of German exports. The automotive industry alone, which sells abroad three out of four cars built in Germany, makes up around one fifth of exports. "The strength in exports demonstrates the international competitiveness of German industry and ensures growth and employment at home,” Wissmann stressed. The crisis of 2008 to 2009 had shown, he said, that the finance business and services were indeed important, but that national economies could not be founded on them alone. "Only with a strong manufacturing sector, with a strong industrial basis, will we overcome the challenges in Germany and Europe,” Wissmann said.
In this connection the VDA president also spoke about the economic governance package (called the "six pack”) passed by the European Council and the European Parliament a few weeks ago. The package will enter into force in December and is intended to be a type of early debt warning system creating more transparency and allowing faster action. Its measures provide such things as a regular check on national reform programmes by the Commission and automated sanction procedures. Wissmann welcomed these measures: "We need a European debt ceiling and effective sanctions on the ‘unwelcome culture of debt.’ Politicians must get to grips with the turbulence on the finance markets, push through convincing regulatory plans, and tackle the debt crisis with credible savings strategies. This is the only way to avoid ‘infection’ of the manufacturing sector from the erratic finance markets.”
On the other hand, the VDA president criticised another regulation in the "six pack” according to which, in the future, also countries with a current account surplus will be called to account for macroeconomic instability, required to undertake reforms and may even have to pay fines. "Even though we are currently hearing different signals from Brussels, we see these resolutions as a cause for concern Export strength serves the EU’s internal market as a whole and helps to stabilise Europe particularly in the present situation. If Europe wishes to maintain its place in global competition, the standards must not be set by the weakest members, but by the most innovative and the best,” Wissmann emphasised.