Speech by German Chancellor Angela Merkel at the 3. Commodity Congress of the CDU / CSU Parliamentary Group "Values and Added Value - Securing Germany's and Europe's Supply of Raw Materials"
- Date:
- 25.04.2012
- Location:
- Berlin
in Berlin
Dear Philipp Missfelder,
dear Commissioner Tajani,
dear Volker Kauder,
Dear colleagues from the German Bundestag,
ladies and gentlemen,
I would like to mention Joachim Pfeiffer, who has a semicircular birthday today - in the case of men, yes - the 45., and congratulates him. I rely on good further cooperation.
I would like to thank Philipp Mißfelder and the foreign and economic policy-makers in our group for the initiative for this congress. That's a very interesting initiative. When I came in with Commissioner Tajani, we both said: This is a timely congress because of course, resource and resource policies can make a contribution to generating growth. At the moment we are called upon in Europe to overcome the sovereign debt crisis and the consequences of the international financial and economic crisis. On the one hand, this can be achieved through sustainable fiscal policy; and this is also the purpose of the fiscal pact. But I always say that this is a necessary but by no means sufficient condition for overcoming the crisis. We need growth as well. We need growth through sustainable initiatives, not just through stimulus programs that further increase public debt, but through structural reforms, as the President of the European Central Bank, Mario Draghi, has said today.
Above all, Germany has achieved great successes with its structural reforms in the labor market and social security systems. The additional wage costs must not be too high and the access barriers to work must be low to promote employment. But we will - as we saw this week at the Hannover Messe - be able to develop our growth prospects in Europe and Germany only if we also remain industrial nations. Information technology is important, the Internet is important and the financial markets are important. But to build on that alone would not be enough in our imagination. Europe and also the Federal Republic of Germany must remain an industrial location.
This includes a sensible energy policy; and that includes an adequate supply of raw materials and resources. Here the world situation has changed. It is not for nothing that a number of development politicians are also sitting here. We know that the question of raw material supply is an international issue. In doing so, we are in competition with states that are pursuing a very strategic raw materials policy planning. That is why the German economy, the Federal Government, politics and, therefore, Parliament, must give answers as to how, in all our commitment to the social market economy and in all our commitment to the independence of economic activities, we can achieve coherent and joint action, in the national interest, so to speak.
Not only is there a scarcity of commodities and also quite a willingness of emerging emerging economies to take a political interest in commodity markets, but there are also significant price volatility in commodity markets, which also creates major uncertainties in the countries that hold commodities or, so to speak, own raw materials as national property. Once you've talked to African heads of governments about fluctuating copper prices, oil prices or gas prices, knowing that commodity revenues there are partly 70 or 80 percent of a country's budget revenue, and prices are around between 50 percent over the previous year and 250 percent fluctuate back and forth, then the household can quickly halve or even triple quickly. Of course you can not build on that sustainable policy. The same goes for those who need raw materials for their production. We in Germany, too, need reliable and sustainable access to raw materials, also because, of course, as an export nation, we also have a great responsibility for the global economy.
German exports are developing well. But imports are also increasing - imbalances are also an issue in Germany - although, of course, demand for raw materials is also a significant factor. Germany has produced 2010 commodities worth 17,7 billion euros and imported raw materials worth more than 109 billion euros. So you can see how we look at the import and export balances for raw materials. In this respect, our success in exporting goods and commodities is fundamentally dependent on imports of raw materials being reliable.
I would like to say in advance that despite all national politics and the combination of political and economic activities, Germany is a cosmopolitan country that relies on international cooperation and transparent trade. We are extremely unhappy that the Doha Round is not progressing at the WTO. We believe that sustainable development in developing countries will be best achieved through open trade, fair trade and transparent agreements. In international cooperation we are therefore committed to a free trade activity. We are committed to working together internationally, and to do so in the context of the G20, where we are constantly having intense discussions about commodity prices, whether it be food or technical raw materials that we need for our industrial production.
I would like to respond to the question, which of course Mr Tajani will discuss in more detail later: There is an EU Raw Materials Initiative, under which the European Commission has identified 14 metallic and mineral commodities, the scarcity of which is particularly affecting the European economy. So that's a strategic question. This applies, for example, rare earths - with the keyword cell phones and others we all know what they are used for; Gallium, for example, is needed for the production of photovoltaic and wind power plants. So I could enumerate a variety of raw materials. We know that scarcity leads to price increases. That is why it is important to constantly focus on transparency, on the development of as many deposits as possible and on this - which, in my view, is very important - that there are no monopolists on offer. Of course, the same applies: Derivatives trading must be regulated in such a way that it does not further boost price volatility, but dampen it.
More than 85 percent of the world's population lives in emerging and developing countries whose demand for raw materials continues to grow. Therefore, it is unlikely that the commodity issue will lose importance. It will increase in the next few years. We also know that we not only have to fight to have access to raw materials, but that mining must be sustainable. For example, during my visit to Mongolia, I learned in many conversations that mining is anything but sustainable. It can lead to the contamination of nature, for example, by a false mining of rare earths, which can also limit the openness of the countries in which raw materials are exploited, or dampen or reverse to the opposite, if you afterwards with decades Environmental damage has to fight. In part, the accident risks associated with exploitation are unjustifiable. That's why European and German raw materials policies are always geared towards partnership and fair working conditions - that's what I want to say.
In the sense of market-based mechanisms, the procurement of raw materials is, of course, first of all to be understood as a core task of the companies. That is why the question of how politics and business approach and work together is one in which we are breaking new ground again. Once upon a time, it was also a pleasure for the German economy, as a result of its specialization, to get rid of many of its own sources of raw materials. No sooner had the last iron ore mine been sold than the situation in the world had changed; and then they thought: It would not be that bad if we had a secure access again. Now, as a politician, we have learned that we can best stay out of many things and have the economy done. That's right in principle. But we are experiencing that many countries in the world, which have a much stronger state sector, are doing very differently. Therefore, we have decided to march with our economy, so to speak, in an agreed but always with the respective competencies in mind. I very much welcome the fact that the Raw Materials Alliance was founded. For this purpose, the Federal Association of German Industry also a big thank you to pronounce; because German companies had to be brought together for a purpose which also brings with it a new activity.
Politically, we can act as supportive in various ways. We did that, for example, by entering into raw material partnerships with Mongolia and Kazakhstan. Both partnerships are still in their infancy. So far, such raw material partnerships have not existed on the German side. To put it bluntly: Germany 's reputation is always excellent, as it were, when it comes to the theoretical handling of a task, but when it comes to the practical steps with which the state aid, development aid, cooperation with GIZ, the creation of state aid Studies, etc., and when it comes down to who invests where, when and how, then we often find that other countries are almost a bit faster in terms of our wonderful preparatory work. I hope that we will reverse this in the combination of politics and commodity alliance over the next few years, and that we will be better placed where it matters.
What can we? On behalf of the Federal Foreign Office, we can promote the bilateral commissions of cooperation through our embassies, the Ministry of Economic Cooperation and Development, in particular GIZ, the Chancellery and the Ministry of Economy. We can build trust. We can make proposals for cooperation in research, exploration and training. We can help with legislation. This is very, very important, because our companies need - for which I promote, wherever I am in the world - reliable legal framework conditions. These are indispensable for a long-term, prosperous cooperation. I also say it to the representatives of emerging or developing countries: that is indispensable for their countries as well. Maybe one can quickly make a good deal, but often the bill comes in ten or 20 years. It is precisely in terms of social peace in countries where there are raw materials, also to have well-educated young people. Most of these countries have a completely different demographic situation than we do. It is also about being able to rely on the investors and not to live with the fact that one day you are sitting on a pile of broken pieces. Therefore, what Germany calls for legally reliable framework conditions is not too much, but in the medium term, always for the benefit of both partners. We always work in the direction of a win-win situation for both sides where we take action, and we are extremely fair in this regard.
In our partnerships with Kazakhstan and Mongolia, we have also been able to set priorities such as improving resource and resource efficiency. For many countries, it is not just about having access to raw materials, but also about being fair and allowing these countries to process raw materials first. It is also about the implementation of environmental and social standards in the extraction of raw materials. It goes, when we think of the processing stages, the construction of industrial clusters. And it is about improving the investment and innovation climate, ie what I have already mentioned in connection with reliable legal framework conditions.
Wherever we operate, we are in favor of greater transparency. All that could lead to exploitation, which could lead to armed conflicts and what destroys the climate, we want to eliminate. We also want to take responsibility for doing this with the right amount of care. Again, I agree: this is not only the concern of German politics, but it has always been policy of German companies to be reliable and credible as long-term investors.
Ladies and gentlemen, one more word on pricing. We will, as I said, talk about it in the framework of the G20. And above all, we will pay attention to the interaction between commodity markets and commodity derivatives markets. First and foremost, it is important to create transparency in over-the-counter derivatives, the so-called OTC derivatives. In this context, I would also like to thank the European Commission, because the EU states have agreed on regulations for over-the-counter derivatives trading that are part of the 1. November this year will come into force. We will thus increase transparency and try to prevent market manipulation of commodity derivatives. The more we regulate internationally in this area, the more reliable the regulations are, of course. It is good that the EU countries have come here in some places.
A second, which we pursue with interest, is the question of the efficient use of raw materials. This is above all a challenge for the economy; we can only flank it politically. As the federal government, we have set ourselves the goal of doubling overall commodity productivity in Germany by the year 2020 compared to 1994. The resource efficiency program "ProgRess", which we adopted at the end of February, also serves this purpose. I think Germany, with its circular economy and efficient use of resources, is indeed exemplary in many areas of the world. In this country, we were able to lower the consumption of raw materials by 2000 percent between 2010 and 11,2 with significantly higher overall economic growth. This shows that we can decouple economic growth and resource consumption from each other.
Before Mr Tajani takes the floor, let me say that we very much welcome a common European approach, a common European resource strategy. This is based on three pillars: the secure access to raw material deposits in third countries, the sustainable promotion of raw materials from European sources and also the one that we have made a trademark in Germany, namely resource efficiency and circular economy.
Ladies and gentlemen, the theme of today's congress - which is why I am very pleased that it was initiated - is a topic that addresses the sources of our prosperity and raises the question of economic viability and long-term economic success. It must be prevented that a country like Germany with a wide range of production can no longer realize its research potential, its innovative strength, its creativity and its precision, because it lacks access to raw materials. Anyone who does not have comparable access to raw materials with a transparent price will also fall behind in materials science, who will no longer be able to master the finishing stages and will not be able to use new materials to develop new machines and fully exploit growth opportunities. In other words, from our strengths in the chemical industry through our strengths in mechanical engineering to our great strengths in automotive engineering - the question of access to resources is a necessary condition for all of this. The access is still far from being a guarantee that you make something reasonable out of it. But one thing is certain: If you do not have access to raw materials, you will not be able to develop any products.
I also wish the European Commission every success, because many of our trade agreements, all WTO-related negotiations, everything relating to competition actions, are now being negotiated by the European Commission, with the Member States, of course. In that sense, we appear as a Europe in many of these issues. Germany can do a lot for its specific needs, but without the European support we could hardly prevail on world markets.
Finally, I want to clarify once again: The European Union is still 7,1 percent of the world's population and Germany only slightly more than 1,1 percent. These numbers will be smaller in the next few years. Today we have seven billion people in the world and 500 millions of Europeans. The world population will continue to grow for a while. Today, we still have 20 to 25 percent of the world gross domestic product - that's a bit difficult to calculate - but that number will also decline. It is therefore quite clear that a consistent, coherent policy for reliable access to resources can not be achieved by the individual Member States of the European Union at all - especially if they then still work against each other. Therefore, dear Mr Tajani, please understand our congress today as a contribution to a consistent European policy.
Finally, a big thank you to the BDI, to Mr Grillo, for what is being done on the economic side. This is a good example of cooperation in the sense of the social market economy and in the interest of our country's success. Thank you very much.