The German Economy Minister, Peter Altmaier, has unveiled the National Industry Strategy 2030 at a news conference in Berlin. The controversial plan marks a shift in Germany's industrial strategy that he said was necessary to safeguard national interests and better defend the country's manufacturing base on which its wealth relies against foreign - particularly Chinese - companies.
The strategy allows for the German government to take stakes in key industries in order to prevent foreign takeovers and the loss of its companies know-how overseas.
“It can go as far as the state taking temporary stakes in companies - not to nationalise them and run them in the long run but to prevent key technologies being sold off and leaving the country,” he told a news conference.
Peter Altmaier
Germany's Economy Minister Peter Altmaier presents his National Industry Strategy 2030 at a press conference in Berlin. Source: Reuters/Fabrizio Bensch
The plan comes against a backdrop of a trade war between China and the US, where the two superpowers are increasingly competing rather than cooperating, as well as continued uncertainty around the future relationship between the UK and the euro zone. Mr Altmaier said that his strategy is all about surviving in an increasingly competitive world.
He said that the competition is now between three major economic blocs: Europe, Asia, and the US, and that in this struggle Europe, in particular Germany, is becoming relegated to a passive observer status. He went on to argue that this was in part due to Chinese and American government support for their homegrown innovators. “There is hardly a successful country that relies exclusively and without exception on market forces to accomplish its tasks,” Altmaier said in his paper.
Germany and Europe should move in a similar direction or risk losing out on more than their economic competitors: "If key technological competencies and, as a result, our position in the global economy were to be lost, this would have dramatic consequences for our way of life, for the capacity of the state to act and for its ability to shape almost all policy areas. And at some point also for the democratic legitimacy of its institutions."
Altmaier identified the key German industrial sectors as chemicals, steel and aluminium, optics, defence, machine and plant engineering, green technologies, aerospace and 3D printing.
Certain economists were quick to criticise Mr Altmaier's plan. Writing in Die Welt, Lars Feld, a member of the government advisory board the German Council of Economic Experts, said that the plan's focus on "subsidisation and regulation" was not consistent with a market economy.
Professor Hans Peter Grüner of the University of Mannheim told the same newspaper that Mr Altmaier's strategy "based on the Chinese model" of state support was "not an option" as it would reduce domestic consumption and push up prices for consumers.
Opposition parties added to the criticism. Katharina Dröge, a Green MP, argued that the easing up of competition rules would mean "a free ticket for megamergers and corporate giants".
Mr Altmaier's strategy was nevertheless supported by Peter Bofinger, another member of the German Council of Economic Experts, who welcomed the fact that the German government was "thinking about an overall concept for industry and innovation."
"The important thing is to find a strategic answer to the industrial policy that China is pursuing," he said.
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