Baden-Württemberg's Prime Minister Cem Özdemir (Greens) is becoming increasingly concerned about the future of industry in Germany. In the week in which Özdemir also visited the VW plant in Neckarsulm, which was threatened with closure, the Green politician made an urgent request to Chancellor Friedrich Merz (CDU) to fight for better competitive conditions at the European level.
In the letter to Merz, which the F.A.Z. Özdemir focuses primarily on the automotive industry. Chinese manufacturers would push into the European market with “significant overcapacity and structural price advantages”. Özdemir demands that “the European Union must appear united towards China and with a clear negotiating mandate and work towards fair competitive conditions.” The background is the threat of production relocations by Mercedes, the uncertain future for the Volkswagen Neckarsulm plant and job cuts at suppliers such as Bosch, ZF and Mahle.
Specifically, Özdemir calls for “a more flexible CO₂ fleet limit values”. Lowering the reduction target for 2035 from 100 to 90 percent is “important for the survival of the automotive industry”, and “without additional compensation”. With regard to the end of combustion engines, according to the current plans, a total of 90 percent of CO₂ emissions should be reduced by 2035 compared to 2021 and not 100 percent as originally planned - but this will be linked to compensation that companies must meet for the additional emissions. The industry criticizes this as unrealistic and bureaucratic. Özdemir now agrees with this position.
Özdemir is also calling for support for the truck industry and joins an appeal from the manufacturers Daimler Truck, DAF, Ford Otosan, Iveco, MAN, Scania, Traton and Volvo, who called this week at the start of the IAA Transportation trade fair in Hanover to bring forward and relax the review of the EU fleet targets planned for 2027. The problem facing manufacturers is still the same as in previous years. The current regulation provides for high fines if companies do not reduce the emissions of new vehicles registered in 2030 by 43 percent compared to 2019. The companies' anger is based on the fact that the vehicles have been developed and are on the market, but the shipping companies are not buying them because the charging infrastructure promised by politicians is not in place.
Özdemir supports the “Industrial Accelerator Act” (IAA), “which we urgently need to strengthen our industry globally and reduce dependencies.” The EU wants to specifically strengthen demand for products manufactured in Europe or for low-CO₂ products by giving their suppliers priority in public contracts and the allocation of funding. However, the IAA must be “designed to be practical, avoid bureaucracy and also include the United Kingdom in the Made-in-EU requirements”.
With a view to greater independence from China in battery technology, the Prime Minister of Baden-Württemberg demands that “Europe must tackle major joint projects as a whole, following the example of Airbus”. The previous plans for a “battery booster” were not sufficient, as shown by the setbacks of the Baden-Württemberg battery projects Varta and Cellforce.
A report from the Scientific Advisory Board of Economics Minister Katherina Reiche (CDU), which will be presented on Thursday, has a different tone. It says that the federal government should not blame the crisis in German industry so much on competition from China, but should finally eliminate its own weaknesses.
Germany's weakness is "not just limited to individual sectors that are particularly exposed to China", but is rather cross-sectoral, according to the report written by economists Felix Bierbrauer, Gabriel Felbermayr and Hans Gersbach. “Location factors, cost burdens, market exits and domestic economic barriers in Germany” are more important than the “China shock”.
Die Debatte über neue handelspolitische Schutzinstrumente, um Exporte aus China in die EU zu erschweren, sieht das unabhängige Gremium kritisch. Importbeschränkungen und Vorschriften für lokale Wertschöpfungsketten unter dem Schlagwort „Buy European“ seien „ineffiziente Schutzinstrumente, weil sie den heimischen Anpassungsanstrengungen eher entgegenwirken und verstärkte Direktinvestitionen sowie Technologietransfer nur indirekt begünstigen“. The EU would also be moving “into an area that is no longer compatible with the multilateral WTO framework”.
In the federal government, the SPD in particular is pushing for such instruments. Finance Minister Lars Klingbeil (SPD) has been calling for “European patriotism” in economic policy for some time. Economics Minister Katherina Reiche (CDU), on the other hand, advocates a partnership with China. Chancellor Friedrich Merz (CDU), however, recently positioned himself in the direction of a more restrictive course towards China.
Grundsätzlich empfiehlt der Beirat, dass die EU sich besser gegen wirtschaftlichen Druck aus Washington und Peking wappnen solle, ohne den freien Handel preiszugeben. The Commission could conclude “plurilateral resilience agreements” with like-minded states. Die Abkommen sollten „gemeinsame Antworten ermöglichen, wenn einzelne Staaten mit Zöllen, Exportbeschränkungen oder anderen wirtschaftlichen Maßnahmen politischen Druck ausüben“.
