Interaction of many structural factors
This enduring story of success is based on the interaction of many structural
factors, some of which complement and mutually reinforce each other. We
group them as follows:
(1) Macropolicies focused on stability and growth
(2) Institutions grounded in German ‘ordoliberalism’
(3) Global companies with unique structures
(4) An equitable system of social security and cooperative social partners
(5) A long-term perspective by companies and citizens with the
willingness to forgo immediate reward – in our view the most important factor in
the success.
The combination of innovative, multinational companies, functioning institutions
and highly skilled workers will, in our view, maintain Germany’s competitiveness
and prosperity into the future. For example, ‘Industry 4.0’ is the synthesis of
information technology and engineering, disciplines in which the country excels.
Germany has many hidden champions here, whose names, unlike those of
America’s heavyweights, are barely known. The current transformation of the
automotive industry shows that the Germany of tomorrow will continue to be a
driver of innovation. “Invented in Germany” will be more and more used instead
of the old label “Made in Germany”. Together this will keep eurozone members
under significant pressure to redouble their efforts.
This presents German politicians with the huge challenge of holding the
eurozone together. Despite over EUR 1 tn in potential liabilities (ESM, EFSF,
QE, Target2) having been accumulated so far in saving the euro, the pros of a
single currency probably outweigh the cons for Germany – not least because its
own currency would massively appreciate.
However, if anti-euro movements
gain the upper hand in key partner countries, thereby increasing the disruptive
risks, there may be a reassessment in Germany of the euro’s costs and
benefits.
EU Forecast
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