The Corona crisis puts a damper on anyone who dreams of a stronger national economy, where the Germans determine everything themselves. While shops had to close and citizens hoarded money, it was exports that got the country out of the crisis. German companies are now even selling more goods abroad than before the pandemic. This export strength works like a life insurance against mass unemployment. You should keep them in mind when discussing the sovereignty of production, vaccinations and global competition.
When the pandemic broke out, some drew the opposite conclusion: The Federal Republic should renationalise itself. Possible bottlenecks in medical products served as a justification for generally relocating production back into the country – and perhaps building walls against imports to protect domestic factories. Such mind games tend to forget what the consequence would be: previous trading partners would buy far fewer goods from the Federal Republic. The German competitive advantages for some products are less likely to be reflected in high profits and wages. Lisandra Flach from the Ifo Institute calculatesthat economic output would shrink by ten percent if it were relocated back.
Yes, Germany should make sure that selected products that save lives are sufficiently in stock – or that they can be obtained quickly. A general strategy of self-sufficiency, however, costs too much wealth. The current supply problems in the industry offer just as little reason to upset everything, as much as they are annoying in the upswing from the Corona Valley. Of course, one can consider whether too much chip production has migrated from Europe – and industrial policy efforts are worthwhile in order to secure know-how and well-paid jobs with this important technology. As a pure remedy for current supply problems, however, these considerations are not suitable, they would come too late anyway.
According to a new Ifo study, only one in ten German companies will be relying more on national supply chains in the future. The others prefer to increase inventory or the number of suppliers. That sounds like a sensible strategy to avoid future delivery bottlenecks without sacrificing the advantages of international trade.
Staring less at the national belly button also applies to another challenge. While more and more citizens in the industrialized countries are vaccinated against Corona, the rest of the world is lagging behind. Also emerging countries like India or Brazil, which are major sales markets for German companies.
In purely humanitarian terms, it is imperative to provide the poorer majority of the world with vaccines. But if this does not make sense to you in your national narrow-mindedness, it should be said that there are additional economic arguments. The industrialized countries should spend a lot of money, so as soon as possible Everyone People are vaccinated. That sounds obvious. But it is far from when a party like the AfD vies for voters with the slogan that one should rather start in Germany instead of saving the world.
It is also advisable to look far at an epoch-making struggle that threatens German exports. The USA and China continue to get caught up in a titanic battle for political, economic and technological leadership under new President Joe Biden. They see Europe as a tool to assert their interests. There are still scenarios in the room according to which European companies would have to decide whether to go to the USA or deliver to China.
The correct answer to that would be more self-esteem. As an economic area, Europe is important enough not to be pushed around. In order to convey this to the self-proclaimed titans, two things are needed: Massive investments by companies and states instead of false frugality so that Europe does not fall behind technologically. And after Angela Merkel’s departure, another chancellor with an international stature.