The German Association of the Automotive Industry (VDA) has criticised the European Commission’s decision to initiate an in-depth review of Germany’s trade surplus to investigate “macro-economic imbalances.” Matthias Wissmann, VDA President and Vice President of the Federation of German Industries (BDI), said, “The export surplus is not the result of political intervention in the market, but of a competitiveness that the German companies work on every day. German businesses do not benefit from an artificially devalued currency or from foreclosure of the domestic market. On the contrary, Germany is one of the most open markets anywhere in the world. We have much higher per-capita imports than France. The importers take around 30 per cent of the German passenger car market – an exceptionally high figure for a country with such strong home brands.” Wissmann added that the European partner countries were also benefiting from Germany’s success, and continued, “Our exports help Europe.” For example, the Cologne Institute for Business Research has calculated that when German exports rise by ten per cent, upstream imports from EU partner countries increase by nine per cent.
Wissmann therefore stated, “The Commission must now proceed with moderation. It has given its word that this investigation will not lead to automatic imposition of sanctions. Financial penalties (and rigid export caps) would be a disastrous signal to those countries that are right now putting in a lot of arduous work on improving their own competitiveness.”
The German automotive industry, which accounts for a large portion of German exports, oriented itself on the growth markets at an early stage. German group brands now cover more than 20 per cent of the Chinese new car market, while in the USA one new passenger car in eight is from a German maker. Wissmann stressed, “In both regions we produce most of these vehicles locally. Here we have never restricted ourselves to exports; instead we have expanded local production. This brings increasing benefits to suppliers in other European countries. The German manufacturers also have large passenger car plants in southern, central and eastern Europe. Germany has become the engine driving Europe’s economy. It would be absurd for the European Commission to penalise the strong players. Europe must not weaken the strong, but strengthen the weak.”
Wissmann went on to say that it was, however, also clear that Germany’s economic success was not writ in stone: “This applies to the general economic conditions both at European level and at national level. We do not need a bureaucratic CO2 Regulation calling into question the business models of certain German manufacturers, nor should we limit our discussion in Germany to tax increases, expansion of the toll, and redistribution. In Europe and in Germany we need a better, stimulating investment climate. Alongside public investments in important sectors for the future, such as the infrastructure, overall conditions conducive to private investment are also urgently necessary.”