The CDU and CSU are presenting a new economic policy agenda for the first time since losing government responsibility at federal level. The country’s economy must be made crisis-proof in the long term. The aim is “to make Germany the export world champion again,” says the draft of a position paper. The executive board of the Union parliamentary group, led by the CDU federal leader and Union parliamentary group leader in the Bundestag, Friedrich Merz, wants to decide this at his closed meeting in Murnau and Garmisch, Bavaria.
Germany is the largest economy in the European Union and the fourth largest in the world after the USA, China and Japan. The German economy owes its competitiveness and global networking to strong innovative power and a high export orientation. The paper, which is available to WELT, states that all “growth forces in our country must be bundled” in order to master the current challenges and future crises. The Union faction calls for a reduction in corporate taxes and a relocation of industrial production to Europe in order to become more independent from the increasingly sensitive and disrupted global supply chains.
According to the Union plans, the promotion of innovations, especially with a view to the German medium-sized companies, which are important for the overall economic development, is to be expanded, and the strong focus on the Chinese market is to be weakened by new free trade agreements. Finally, for the domestic automotive industry, a key sector of the German economy, the Union is focusing on the further development of clean combustion engines.
The companies are currently facing the greatest challenge in German economic history. Many industries are still struggling with the consequences of the corona pandemic. The supply chains of globally highly networked and export-oriented companies continue to be disrupted. Among other things, the order of new lockdowns in China leads to supply bottlenecks. The industry is being slowed down primarily by the lack of computer chips. The Russian invasion of Ukraine is further disrupting global trade.
In addition to the already high energy costs in Germany, there are now sharply rising prices for gas and subsequently for electricity and oil. For many years, cheap gas from Russia was one of the few cost advantages over competitors from the Far East in Germany, where wages are high. This advantage is now gone due to the Russian energy policy, which relies on targeted shortages to achieve political goals.
In addition, the entire economy is in a comprehensive transformation process – towards sustainable, CO₂-free processes and a comprehensive digitization of production and administrative processes. According to experts, the German economy is not well positioned for many of these challenges.
The CDU and CSU now want to master these challenges with a competition and economic policy that focuses on increasing the range of goods and services and thus stabilizing prices. “The preservation of well-paid jobs and the preservation of the industrial basis of our prosperity must have priority from now on,” demands the Union.
The opposition has sharply criticized the traffic light coalition. After eight months of traffic lights, Germany is well on the way to developing into what it was after seven years: the sick man of Europe. The decisive instrument to prevent this are tax cuts. Without this, Germany threatens to fall behind in international competition. “We therefore now need a clear signal of departure for our economy with a courageous corporate tax reform,” the parliamentary group proposes. “If the traffic light deprives companies of the money they need for innovation and investment, there will be no new impetus for growth,” says the “Taxes” section.
Unemployment figures rose in August, and inflation in the euro zone is at a record high of 9.1 percent. The Dax, on the other hand, is in “long-term downward mode” and the euro will “not get back on its feet in the medium term”, according to capital market analyst Martin Utschneider.
Source: WORLD / Dietmar Deffner
Domestic companies will continue to be strongly export-oriented in the future; this is one of their strengths in global competition. However, the Union also identifies the global supply chains as one of the weak points. Her suggestion: “In order to strengthen the resilience of the German economy, we must increasingly produce key technologies and products in Europe again in the future.” Germany should thus once again become a top international location for innovations, investments and production.
China has been a key trading partner for Germany for many years: as a large sales market, a cheap production location and increasingly as a supplier of raw materials that are crucial for the energy transition, as well as increasingly high-quality products and high-tech. This creates a concentration of risk: Germany is becoming increasingly dependent on Beijing’s policies and the economic development of the People’s Republic.
“In order to become more independent of the Chinese market, we have to intensify trade agreements with the countries that are close to us,” the Union faction demands. This includes, for example, a free trade agreement with the most European country outside of Europe, Canada. “The fact that the traffic light finally put the ratification of Ceta on the agenda after months of blockade is overdue,” the CDU and CSU say.
Incentives for innovations and investments in companies must be set much more strongly than before. According to the plans of the Union faction, this includes setting up the agency for leap innovations “independent of departments and expanding them into a real laboratory”; Enable company formation online within 24 hours; and to only tax investments in start-ups in the future if profits are made from the investments or the shares are sold.
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