The Federal Minister of Economics is calling for a new agenda to strengthen the economy in Germany. With the reforms of Agenda 2010, Germany once achieved a “new dynamic,” said Katherina Reiche on Monday, referring to the reform package of former Chancellor Gerhard Schröder (SPD). Now Germany is once again in a situation in which the country needs a “comprehensive fitness program, a 2030 Agenda”. To be on the safe side, Reiche repeated the word again: An “agenda for growth and competitiveness” was necessary. Companies need freedom for innovations and energy must become affordable again. The point with which the minister in the coalition is likely to offend the most: The government must find the courage to carry out reforms of the social security systems “even in the face of resistance”. The Reich Ministry held an “economic policy symposium” in Berlin on Monday. As part of the event in the Berlin Telegraph Office, a symbolic handover also took place: the bust of the former Minister of Economics and co-founder of the social market economy, Ludwig Erhard, is returning to the Ministry of Economics. The sculpture by the artist Wolfgang Ritz was loaned to the Ministry of Economics in 2007 under the then Economics Minister Michael Glos (CSU). Two years ago the owners had them removed in protest against the politics of Robert Habeck (Greens). Now the foundation of the economist Herbert B. Schmidt and his wife Ruth Schmidt-Niemack handed it back. In the coming days, the bronze figure will be moved to its new location in the current Ministry of Economics quarters on Chausseestrasse. “We were probably a little too cool.” Unlike Ludwig Erhard’s time, today it is not about overcoming shortages and building democracy, but about maintaining prosperity, said Reiche in her speech. In the post-war period, citizens’ expectations of the social market economy were exceeded. During reunification, however, they were undercut. Today Germany is experiencing “a structural crisis that has never been seen before in the history of the social market economy”. Reiche recalled the “Cool Germany” praise from the British magazine “Economist” in 2018. “We were probably a little too cool.” Germany is in danger of being left behind. The economic recovery predicted for the coming year – the federal government expects gross domestic product to grow by 1.3 percent – is a result of higher debt, not a reflection of self-sustaining economic growth. In terms of potential growth, Germany continues to be at the bottom of the list in Europe. Structural reforms are all the more important. “This phase of the noughties shows that when it comes down to it, changes are possible in this country,” said Reiche. Economics will present autumn reports on Wednesday. In July, the Economics Minister caused discontent in the coalition by saying that citizens could not spend a third of their adult lives in retirement. On Monday, she repeated those words again. Disincentives must be eliminated “even with pain”. More “intergenerational justice” is needed. Reiche also raised the question of “whether we are creating false incentives by continuing to pay wages from the first day of illness.” It is also questionable whether managers need the same protection against dismissal as, for example, nursing staff. The timing of the symposium was not chosen by chance. On Wednesday, the Council of Experts for assessing overall economic development will present its new report. In the past, the committee had, among other things, called for the abolition of the “pension at 63”. The black-red coalition, however, has decided the opposite. With the expansion of the mother’s pension and the so-called security of the pension level, the costs of the pension system continue to rise. The coalition committee will meet on Thursday, and in addition to pensions, controversial issues such as the end of combustion engines and heat pump subsidies will also be discussed. Reiche also briefly commented on the latter in her speech: “More personal responsibility will also be required when replacing heating systems in the future.” USA facing “fiscal time bomb” Historian Harold James, who teaches at Princeton University in the United States, drew parallels to the past. When Ludwig Erhard pushed forward his reforms in post-war Germany, he was met with a lot of mistrust. Similar to back then, the world faced each other in blocks. The USA is facing a “fiscal time bomb,” said James, referring to the country’s high level of debt. China is facing huge demographic problems. This could be an opportunity for the Europeans: “Europe can play a key role in building a new institutional framework for stability,” said James.More on the topicWhen Bernd Stock, as a representative of the Reiche Foundation, officially handed over the Erhard bust, he commented that Reiche would hopefully not put a bust of “her immediate predecessor” next to it. The minister was able to reassure him: “We’ll leave it at the original.”
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