Policy Paper: A New Course for Industrial Strength
German industry has presented a new policy paper calling for a growth-oriented economic and trade policy. The paper focuses on improving business conditions, implementing a more effective industrial policy, and pursuing a foreign trade policy that combines openness with strategic safeguards.
A unified approach is possible. The business community is leading the way.
Despite adverse conditions and differing interests among its members, industry has succeeded in formulating common principles of economic and trade policy. The federal government could take a cue from this. The business community is taking a constructive approach and is thus becoming part of the solution to many of the problems currently facing Germany.
Industry is calling for a growth-oriented realignment of economic policy.
Growth and competitiveness must once again take center stage. At the same time, traditional business location policies alone are no longer sufficient today to achieve climate neutrality, security, and resilience. This requires targeted industrial policy instruments and a more strategic foreign trade policy toward China, the U.S., and new partner regions.
Economic strength is becoming a prerequisite for security, transformation, and resilience.
Economic policy must now consider growth, security, and resilience as an integrated whole. The geopolitical situation makes economic performance itself a prerequisite for security policy: Germany and Europe must strengthen their growth potential in order to be able to finance defense, transformation, and resilience in the long term. In industrial policy, new key objectives—such as climate neutrality, security, and resilience—should not overshadow the goals of growth and prosperity.
The decline in growth potential makes reforms all the more urgent.
High labor and energy costs, as well as the tax burden, a lack of venture capital, and excessive regulatory burdens are undermining investment and innovation. Growth-friendly policies and structural reforms must therefore be given the highest priority in order to significantly improve competitiveness once again and ensure prosperity and social stability.
The social market economy remains our guiding principle, but it must be further developed.
Open markets, competition, European integration, and the international division of labor remain central pillars of economic success. Under changing international conditions, however, security and resilience concerns must be given greater consideration without sacrificing openness and the country’s attractiveness as a business location.
Industrial policy must become more effective without becoming more bureaucratic.
Industrial policy instruments are becoming more important for achieving climate neutrality, security, and resilience. It is crucial, however, that they pursue clear goals, are managed efficiently, and facilitate investment rather than creating additional complexity. Therefore, these instruments must be developed in collaboration with the business community, and their implementation must be coordinated.
Energy and climate policy must turn goals into investments.
Industry remains committed to the chosen path of transformation. Climate neutrality remains the goal. However, it is crucial that the path to achieving it becomes economically viable: transformation will only succeed if companies can derive sustainable business models from it.
Some assumptions regarding availability and market ramp-ups have not yet materialized. This is increasing the tension between the necessary investments in the transformation and the industry’s declining competitiveness. That is why short-term relief measures, structural reforms of the energy transition, and greater flexibility in the climate architecture are needed—while clearly maintaining the goal of climate neutrality.
Europe must make competitiveness its guiding principle.
European economic policy must be more consistently geared toward growth, productivity, and innovation. The proposals by Draghi and Letta point the way. Now it is crucial to translate them into concrete improvements in the business environment and greater investment momentum.
Openness requires strategic safeguards.
The liberal, openness-driven international economic order remains the guiding principle for German industry. However, foreign trade policy must strike a new balance between openness, security, and resilience.
Derisking with regard to China must be pursued more consistently.
The systemic competition with China’s economy increasingly challenges the open social market economy and requires an appropriate response in industrial and trade policy.
Germany’s own competitiveness remains the central foundation for this. However, in light of structural market distortions and security risks in key strategic areas, it is not sufficient on its own. Derisking must therefore be implemented more consistently and underpinned more clearly by foreign trade policy.
Europe needs a self-assured, interest-driven stance toward the United States.
Europe should strengthen the transatlantic dialogue on critical technologies and resilient supply chains, while at the same time protecting its own economic interests. In the face of protectionist U.S. measures, European countermeasures must be considered without unnecessarily straining the strategic relationship.