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Can Germany Globalize?

How can Germany stay on top of the challenges brought by the global economy?

June 28, 2001

How can Germany stay on top of the challenges brought by the global economy?

Germany is the third largest economy in the world — behind the United States and Japan. Yet, in an increasingly competitive world, the old trademark, “Made in Germany” is not sufficient to maintain this position. The global economy is forcing the country to make adjustments to its cherished time-worn traditions. Our new Read My Lips feature looks at how German politicians and businessmen are dealing with the challenges.

How has the global economy affected Germany?

“Competition is not unknown here. But it was always understood as Germany against the rest of the world. Now it is internalized. Now it is right here in my village.”

(Adolf Rosenstock, Nomura economist, November 1999)

Why do Germans have a hard time adjusting?

“We lived with the old model of Germany Inc. very successfully over the last 50 years. But in a globalized environment, you have no chance to pursue an island model — and it was an island model. It was very German.”

So, what exactly are people afraid of?

“There will be hunters and hunted, winners and losers. What counts in global competition is the right strategy and success.”

(Heinrich von Pierer, Siemens CEO, February 2000)

How about the famed German focus on consensus in all this?

“To agree on keeping a status quo that can’t be kept has nothing to do with a consensus. It’s decadence.”

(Hilmar Kopper, chairman of Deutsche Bank, October 1997)

Is the public willing to accept changes?

“It seems part of German nature to talk about globalization — but when it arrives not to want any part of it.”

(Editorial in the Frankfurter Allgemeine Zeitung, November 1999)

For example…?

“The inflationary use of Americanisms in advertising and the media is foolish and stupid.”

(Germany’s President Johannes Rau, on the frequent use of English words in German, February 2001)

What is the government doing to try to alleviate this fear?

“We must take care that globalization does not become something people become afraid of.”

(German Chancellor Gerhard Schröder, on globalization motivating nationalistic and protectionist groups, November 1999)

And how do opposition politicians aim to do this?

“We want a society that will reconcile markets and people.”

(Angela Merkel, leader of the German Christian Democratic Party, April 2000)

What is the government’s answer?

“Politics must strike a sensible balance between employees’ needs for security and the necessity for flexibility in the era of globalization.”

(Gerhard Schröder, Germany’s Chancellor, June 2001)

What do others think about Germany’s position in the global economy?

“The Germans are waking up about a decade late. The United States has already taken the cream of our talented computer people. All that remains for the Germans are the leftovers.”

(Vinod Kymar, political counselor at the Indian Embassy in Germany, April 2000)

Is it all the Americans’ fault?

“There is no question, compared to a year ago, the world economy, led by the United States, looks more gloomy.”

(Gerhard Schröder, German Chancellor, June 2001)

And finally, where does today’s Germany stand in historic terms?

“Germany is ending the 20th century very much like it began — newly enlarged, still affluent, though economically declining, and increasingly inward-looking.”

(Financial Times columnist Wolfgang Münchau, November 1999)