Fuente : German Federal Gouvernment
http://www.bundesregierung.de/

Schröder: US has a strong partner in Germany

/noticias.info/ In an economic policy speech given in Chicago on Thursday, February 26, Chancellor Gerhard Schröder stressed the importance of transatlantic economic relations for the global economy. At the same time he warned of the consequences a further weakening of the dollar could have.

"Good economic relations is one of the best ways to ensure adhesion in a partnership," Schröder said in a speech given on February 26 at the Chicago Council on Foreign Relations, a leading US foreign and economic policy institute.


Gerhard Schröder in Chicago.
© Fuente: German Federal Government


"We need to convince people that a global economy and free world trade hold out the best opportunities for development," he noted, adding that as exporting nations Germany and the United States are heavily dependent on global trade.

Reforms and know-how instead of protectionism

With this in mind, our response to the movement of jobs to lower-wage countries in Asia or Eastern Europe cannot be that of sealing off our home markets with protectionist policies.

"Instead we need to double and triple our efforts to maintain and expand our competitive advantages," Schröder noted, adding that this needs to be done through investments in education, research, and development; through an active policy of innovation and sustainedimprovement of infrastructures; and by effectively developing the potential for growth in industries of the future. "We need to invest our money in knowledge in order to be able to make money with our knowledge," Schröder said.

Social security reforms are intended to free up funds for investments of this kind in Germany, despite the fact that this will not be very popular at the outset. "We need to and want to fully implement these reforms," Schröder stressed.

Concern over weak dollar

Schröder expressed concern regarding the current strong imbalance between the euro and the dollar, warning that further shifts in the exchange rate to the disadvantage of the euro zone would not make sense, given that Europe's overall current account situation is virtually balanced and that this would have a damaging effect.

As a result of their strong dependency on world trade both the German and American governments have a duty to keep general conditions for the global economy stable.

Background:
The euro-dollar exchange rate has reduced the ability of European exporters to compete on non-European markets. Products that have to be paid for in euros are currently very expensive for American customers and if dollar prices are agreed on the resultant revenues are often not viable for Germany companies.


Further liberalization of world trade

Schröder called for a resumption of WTO talks on liberalizing world trade as soon as possible as well as a complete elimination of export subsidies everywhere.

He said Germany shares with the United States "the basic conviction that free global trade provides critical impetus for growth and employment." However, there is a need for a clear delineation of court jurisdictions, he noted, referring to suits filed against European companies in the United States. He expressed concern about cases where courts declare jurisdiction even though neither the plaintiffs, nor the defendants, nor the facts of the case have a genuine relationship to the venue, saying that this should not be allowed to become a stumbling block for globally operating businesses.


US has a strong partner in Germany

Schröder welcomed the fact that President Bush wants to focus the coming G8 summit in the United States on the situation in the Middle East, adding that in addition to the peace process efforts need to be made to promote modernization and democratization in cooperation with partners in the region.

Schröder is convinced that "without political stability and security, there can be no sustained growth and no free global trade" and that development of the economic and social potentials of the Middle East region will constitute a key contribution towards the fight against terrorism and extremism.

Schröder underscored Germany's commitment to cooperation with the United States and the other Western partners in this process. He told his audience that "in Germany the United States has a strong partner in Europe".

Chancellor Schröder is scheduled to meet with President Bush in Washington on Friday, February 27.

27/02/2004
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