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Guest commentary: We need an active foreign policy on raw materials – otherwise we risk a massive loss of prosperity

Guest commentary: We need an active foreign policy on raw materials – otherwise we risk a massive loss of prosperity

The German automotive industry condemns this war in the strongest possible terms. Manufacturers and suppliers in our industry immediately drew consequences and stopped doing business in and with Russia. They have taken a clear position and stand united behind the economic sanctions imposed by the EU against Russia. Politics, business and society must now stand closely together.

It is therefore all the more important now to make strategically sound decisions that are responsible in the long term and, not least, economically prudent. Measures that, in case of doubt, we can and must hold out for longer than we all hope. Only in this way can we effectively counter Russian aggression.

Our economic strength is one of our most influential levers. Our economic model is indispensable for prosperity and thus for social peace in Europe. Many companies have a global footprint. They have production sites in many countries, they serve sales markets from different locations and thus secure growth and prosperity far beyond our borders.

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If Germany were no longer able to ensure security of supply through its own political actions, this would destabilize us and could result in migration to other regions of the world. Our economic model and our prosperity would be endangered, the (social) consequences would not be foreseeable, and our global influence – at all levels – would decline.

The trade-off of “stopping imports of gas from Russia” presents us with a dilemma. Hildegard Müller

The consideration of “stopping gas imports from Russia” presents us with a dilemma. One thing is clear: Germany must become independent of Russian energy. And every company must prepare for a possible supply stop.

However, the German government was right not to immediately impose an import ban on Russian natural gas. Instead, it is working intensively on solutions that will reduce our dependence on Russian gas as quickly as possible and increase and secure Europe’s security of supply.

The important thing now is to relieve the burden on the economy quickly and precisely

The individual industries must not be viewed independently of one another. This is particularly true of gas supply. Even if the automotive industry is less gas-intensive than other industries, we are of course precisely dependent on their products.

At the same time, the already rising (energy) prices are pushing more and more people and companies in Germany to the limits of their ability to cope. With the second relief package, the German government has placed an emphasis on providing rapid and concrete relief for citizens. This will help to reduce the costs of mobility and energy. In this way, the government is sending an important signal: mobility means participation and must remain affordable for everyone at all times.

It is now important to provide rapid and targeted relief for the economy. The transformation engine for greater climate protection must not be allowed to stutter despite the challenging times – on the contrary, it must be given an even stronger boost. The necessaryThe effort required was immense even before the war.

Transformation as a task for society as a whole

Even in the face of the current challenges, the automotive industry remains committed to climate-neutral mobility. We are vigorously shaping it, and we are convinced that transformation is now all the more the right path. To this end, companies are converting plants and investing around 220 billion euros in research and development up to 2026 alone.

This transformation is nevertheless a task for society as a whole. All stakeholders – companies, policymakers and social partners – must work together to achieve this goal. Only then will it be a success.

For this to happen, the framework conditions must be right. We have to learn from crises. We have to make courageous decisions – and not just when there is no alternative.

The corona pandemic has already clearly revealed the many weaknesses and the need for reform in Germany: Our country is not competitive when it comes to digitization. Added to this are processes and procedures that are far too slow, outdated administrative structures and an excess of bureaucracy.

The consequences of war affect the European economic area more directly than, say, the USA or the Asia-Pacific region. Hildegard Müller

Here and there, adjustments have been made – but progress at a snail’s pace is no longer something an economic nation like ours can afford. The bitter consequence would be a permanent loss of growth and consequently of prosperity.

Germany is in danger of losing a massive amount of competitiveness

Against the background of geostrategic developments, reforms are all the more urgent. The consequences of war affect the European economic area more directly than, for example, the USA or the Asia-Pacific region. If we persist, there will be a foreseeable impact on the willingness to invest, both on the part of the real economy and on the part of investors.

As a result of the triad of rising inflation, the challenge on important procurement markets and restrictions on export markets, we are now in a situation in which Europe, but above all Germany, is in danger of losing a massive amount of competitiveness.

We must draw swift conclusions from the crises. This applies to the development and expansion of the digital infrastructure as well as to the need for faster planning and approval processes and, in particular, to the location conditions with taxes, duties and levies, which must finally become competitive again in international comparison. Only in this way can we achieve the efficiency and resilience needed to remain geostrategically relevant and secure our prosperity.

Germany and Europe need more commitment to free and fair trade

Other countries in Europe and regions of the world are also more independently positioned because of different conditions. And we are in competition with these countries. Due to the existing high dependence on resource imports from these countries and regions of the world, it is therefore all the more important to set the political course in a way that is open to technology.

The international framework conditions must also be set more quickly and decisively. Germany and Europe need more commitment to free un

d fair trade. Trade and investment agreements not only contribute to growth and prosperity, but also support joint efforts for climate protection, social standards and human rights.

We also need an active foreign policy on raw materials and new energy partnerships. We must not allow markets to be distributed without us. Here Germany, here Europe, must act more quickly.

The international division of labor is a successful model that has brought prosperity and long peace to Germany, Europe and internationally. This model has not failed; Russia’s breach of international law must encourage us all the more to seek peaceful exchange with other countries.

Nevertheless, industry will also have to learn from the current situation and further diversify its supply chains, review risks and revise strategies. The onus is on all of us – politicians, business and society.

The author: Hildegard Müller is President of the German Association of the Automotive Industry (VDA).

More: Why the risk of stagflation is rising – and what the consequences would be

Continue reading: https://www.handelsblatt.com/meinung/gastbeitraege/gastkommentar-wir-brauchen-eine-aktive-rohstoff-aussenpolitik-sonst-droht-massiver-wohlstandsverlust/28229050.html

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