revolution is taking place far from the usual headlines: Despite the havoc
wrought by the international financial crisis, European companies are
performing exceedingly well in comparison to their American counterparts.
Export-oriented businesses are contributing significantly to this development,
even outpacing lower-cost rivals from China. Key to this phenomenon is
increasing globalization that lends added importance to the share of foreign
sales, which account for 39 percent of sales for Europe as a whole, versus 30
percent for the US.
For numerous German companies, exports account for over 80 percent of all sales
According to research conducted by Deutsche Bank, Germany's GDP has grown by an astounding 2.2 percent in the second quarter, which would bring the annual growth for 2010 to 3.5 percent. This is largely due to the good performance of the country's export sector. Marring this picture are fears that this trend will weaken significantly in the second half of 2010, because of the long-term effects of necessary fiscal consolidation in a number of European countries. The German economy is increasingly feeling the repercussions of developments in other countries. In recent months, as French and British markets have more and more turned toward southern Europe, expectations for Germany's growth rate for 2011 would have to be downgraded: It is now expected not to exceed 1.5 percent (Deutsche Bank Research).
In early September, a meeting that brought record attendance numbers to the Federal Foreign Office underlined the prominence of exports for the German economic policy: Around 1,000 delegates representing more than 500 companies gathered for the annual business forum at the Ambassadors Conference. The ensuing discussion addressed concerns ranging from the issuance of business visas, to Germany's economic presence in Latin America and the Caribbean, as well as to the question of whether the spread of Western values adds competitive advantage to business activities internationally (Auswaertiges Amt).
Hosted by Foreign Minister Guido Westerwelle and Economics Minister Rainer Bruederle, the event brought together Germany's leading diplomats and the heads of principle companies active in the field of exports. As Minister Westerwelle stressed in his opening statement, it is becoming increasingly important to use the extensive worldwide networks established by the German Foreign Service for the benefit of the country's businesses. This was particularly true as it would pertain to those small and medium sized businesses that seek to gain a foothold in foreign markets. Moreover, besides the mercantile interests involved, German businesses would also act as vehicles for promoting the cause of human rights and the rule of law around the world. Internationally, governments are growing increasingly sensitive to investors' concerns, as they become more and more aware that foreign monies will flow only where a safe investment climate guarantees returns (Auswaertiges Amt).
During a talk at the Federal State of Hesse's Office in Berlin (Hessische Landesvertretung Berlin) on September 14, United States Ambassador Philip D. Murphy also focused on the central importance of the transatlantic relationship and German-American friendship for overcoming the detrimental effects of the international financial crisis. As Ambassador Murphy pointed out during the discussion, even though transatlantic topics may well have become less tangible in the post-Cold War era, their importance has been on the rise. This is particularly true of areas such as economics and finance, climate change, and security threats such as cyber warfare. For the United States, a strong and successful Germany was a crucial driving force behind European integration, and for ensuring peace and stability on the continent (Hessische Staatskanzlei).
Photo licence: cc by Auswaertiges Amt