"Germany Faces Three Challenges
Of Considerable Importance
To Our Future"
by Federal Chancellor Angela Merkel of Germany
Federal Chancellor Angela Merkel
Coming back to my own country, to Germany, I can tell you that we still have a strong economy which, however, has been shaped to a very large degree by the industrial age. In our country, the manufacturing sector still produces much of our wealth. And the automotive industry certainly still plays a very important role in this generation of our wealth. If we look at the revolutionary development in the automotive sector then, of course, we can see there are potential risks: risks in terms of jobs; risks in terms of data management. For example, the question as to who owns data is of crucial importance. If, as it were, data always belongs to plat-forms then our prospects are less favorable than if they belong to the car manufacturers themselves. The fact that we in Germany, for instance, but also in Europe, aren't able to this very day to produce battery cells ourselves is certainly a major problem for Europe's future as a car manufacturing base. That is why I remain convinced that we should make policy decisions concerning this industry - as we have already done in the case of chip manufacturing - and use our cooperation in Europe to close the gap in areas of technology where we have fallen behind. For I believe that we cannot simply leave a large portion of the value added in relation to tomorrow's cars, for example in the sphere of emobility, to other continents if we want to be a competitive player on a durable basis. Germany faces three challenges of considerable importance to our future, which I woud like to mention here. First of all, the energy transition - the issue of affordable but also sustainable energy which meets our climate protection objectives. I am quite certain - and this, after all, is becoming more evident from year to year - that climate change is of huge importance to us and to the world as a whole. Industrialized countries therefore have a responsibility to develop technology which can also benefit others. That's not because the CO2 emissions of 80 million people, as in Germany's case, could have a great impact on overall global emissions. Rather, it's because we have the capability to do so and because we have already emitted so much CO2 in the course of industrialization. I am therefore very happy to be able to say to you - even though it has an impact on our energy prices - that renewable energy is now the cornerstone of our energy supply in Germany and accounts for the largest percentage in our overall energy mix. We will have phased out nuclear energy by 2022. We have a very difficult problem, namely that almost the only sources of energy that will be able to provide baseload power are coal and lignite. Germany has now phased out its own coal production. That means that sub-sidies have been discontinued. We have therefore set up a commission which is examining the phasingout of coal-based power in Germany and is now in the final stage of its work. Naturally, we cannot do without baseload energy. Natural gas will therefore play a greater role for another few decades. The dispute about where our natural gas comes from is thus a bit over the top. For, on the one hand, it is perfectly clear that we will continue to obtain natural gas from Russia. However, it goes without saying that we want to diversify. We will therefore also purchase liquid gas - perhaps from the United States and other sources. We are thus expanding infrastructure in all directions. However, I believe we would be well advised to admit that if we phase out coal and nuclear energy then we have to be honest and tell people that we'll need more natural gas. What is more, energy has to be affordable. This brings us to a subject on which we in the coalition have resolved to do better. For, being honest, I have to say that compared with elsewhere in the world, we are far too slow with construction projects. We are too slow when it comes to the expansion of the grid - the generation of renewable energy requires entirely different transmission structures. We are too slow when it comes to our infra-structure as a whole. Our aim must be to become quicker, obviously without neglecting the rule of law. The second point is digitization. Here, too, it is a matter of infrastructure - but of very much more besides. One thing that particularly worries me - and this is something else we can only resolve at European level - is that we have fallen far behind in the platform economy. Maybe it is the case that countries with a fairly saturated and relatively well-functioning administration do not feel such a drive to innovate as developing countries and emerging economies do. In particular, nothing the state does with its citizens is anywhere near as digitized as it should be. So we plan to ensure that all administrative services are available to our citizens in digital form as well, by 2022 at the latest. Here, too, though, we really are not up with the front-runners at European level. We're actually a bit behind. I think the digital transformation is going really well in our big companies. Things are getting better in SMEs; B2B is working really quite well. But business-to-customer is where it all unravels. Here we are in a competition. That is absolutely clear. And it is a competition that will decide whether those who operate the platform or those who offer the product gain the value added, as it were. I don't think this battle is over, certainly not from the German perspective. We can win it, but we will have to be fast. The third point is demographic change in Germany. Here, freedom of movement within the European Union is a big help. But on top of this we in Germany have now decided - after decades of discussion, it has to be said - to adopt an immigration act for skilled workers. Of course, this also means that we will have to manage migration better. Here, too, though, we have made considerable progress in recent years. We have seen - and here I am adding a fourth point - that we can only truly move forwards if we stop believing that we can go it alone. The war in Syria and terrorism in Iraq have shown us how globalization is reaching us in Europe and especially in Germany too, in the form of many refugee flows. That is why I am very proud to be able to say that Germany is one of the major donors helping to bring stability to the arc comprising Syria, Jordan and Lebanon. For we know that it is much better if people can stay in their home countries and not fall into the hands of human traffickers. Our development, too, goes better, if we provide help on the spot. That is why our focus will be on this region, but also on partnership with Africa. That is why we did so much with Africa during our G20 presidency.★