Interview With German Economic Minister Peter Altmaier

By Claire Stam, Malte Ketelsen and Raik Raupach

(EurActiv) — Germany’s Economy and Energy Minister Peter Altmaier met with Claire Stam from EURACTIV Germany. Among other things, they discussed the ‘New Silk Road’, the battery alliance with France, climate change and power lines between northern and southern Germany.

EURACTIV: For the following year, you are proving to be optimistic. With Brexit, the US trade war and Chinese competition, we have to ask: Why are you so optimistic?

Altmaier: It is true. There is insecurity at an international level regarding wholesale relationships. It has a dampening effect on Germany’s economy because we rely heavily on exports.

51% of our industrial products are being exported but the German economy is generally speaking in a robust state. The last years, we have created new jobs and companies have invested in innovation.

That is why I believe this slowing growth can be overcome and that there will be strong economic growth in the second half of the year.

China keeps extending its economic power in Europe. Is this the beginning of the end for the EU as an economic community?

I will do everything to ensure the EU stands at the start and not at the end of a success story.

Then the EU is the best thing that has happened to the peoples of Europe in the last 200 years. That also means that we need to have more discussions on economic policies. The Chinese ‘Silk Road’ strategy is addressing quite a serious problem:

How do we deal with markets in Asia, where billions of people live? These people want to prosper, consume, buy and sell products with Europe. How do we organise logistical and trade relations to ensure products are transported to reach the people.

The Chinese may have recognised this before us Europeans. We presented our own EU-China connectivity strategy just last year. That is quite late; the Chinese were faster than we were.

We now have the task, together with China and other countries in the region, such as Japan, Singapore, Malaysia and many others, to set up a system of trade routes. No one will be able to discriminate, use their political power to abuse or impose a one-way trade. Instead, we would like the trade to be open in both directions for products from many different countries.

That is our goal. We had very serious talks at the ‘Silk Road’ discussions in Beijing. And I think it became clear that this Chinese project can only succeed if it is free from discrimination, if it sees itself obligated to multilateralism, if smaller countries do not lose their independence as a result.

If we have a level-playing field regarding company mergers, and, one very crucial point, Europe needs think about its own strategic interests. Last year, there were attempts to overtake parts of Germany’s electrical power distribution system.

We put a stop to that. The government’s development bank, KfW, took possession of the shares. Because, if possible, we still want to keep critical infrastructure within Germany. Such discussions also need to take place in other countries.

Security interests, economic interests and political interests, they are a unit. And on the basis of these interests, we can maintain and develop fair relations with China. I think China now understands that they should lean towards what should be the standard in today’s global market economy, namely the principles of equality and that respecting the rule of law is the basis for successful trade relations.

The Commission has also rejected the merger between Siemens and Alstom. Are you still convinced that ‘European champions’ should be formed?

We have seen that global markets are developing from this. Companies from one country are competing for contracts in other countries. Firstly, it is about the obvious trade relations. These are influenced by middle-sized companies that are also successful worldwide.

But there are also markets that deal with contracts worth tens of billions and more. These are contracts that concern civil aviation, the rail industry, and many other sectors.

These companies are capable of managing these large contracts and winning those tenders. We have seen that in China and the US, there have been concentration processes. They do not only have ‘hidden champions’ like we do, but also very large and powerful international ‘champions’.

And we need to make a choice: Do we want to continue having a chance on these markets? Do we want to continue building planes in Europe? Do we want to be a leader in the global rail industry in which we invested 5 billion euros for the next few years?

If so, we also need to support companies that want to merge, bundle their strengths because only then will they have a chance to compete with companies that are five to ten times larger.

Since you presented your industry strategy, you have received a lot of criticism. What is your response to the critics?

The industrial strategy was important because we made clear what our economic interests were, so that we take the right steps without being at the mercy of others.

I have made provoking suggestions. That was the point. There is a continuing debate on this. This is actually strengthening the validity of my intentions.

We have received a lot of support. We managed to find a common approach with France but there is also criticism, which is completely normal in a democracy.

When presenting my strategy, I called for a discussion and for suggestions to be made. A final strategy will be developed based on these.

Many thought small and medium-sized enterprises (SMEs) were less important to me because they were mentioned less extensively. That is a misunderstanding. SMEs are very important to me. I am the “Minister of SMEs” in this coalition.

However, and this is key, where we should trade, reduce deficits and where Europe is not well-positioned, that is not the sector where SMEs are successful. SMEs are successful and very strong. These are sectors such as digitalisation, artificial intelligence, platform economy.

In China and the US, companies in these sectors are worth $80, even $100 billion. We have to deal with precisely these companies. We should not be discussing SMEs or big companies. But the discussion should focus on protecting our interests in a globalised world.

Another criticism is that you are do not sufficiently support low energy costs and that the development of power lines is coming slowly. What are your thoughts on this?

It is true that the development of power lines is coming along quite slowly. This criticism should be directed at all those in charge before me. In all those years, they were incapable of bringing about change.

I have made the issue one of top priority. We adopted the Grid Expansion Acceleration Act in Parliament. Together with the federal states, we adopted a common action plan.

We will solve these problems in turn, and I am convinced that in six or seven years, we will have Europe’s best and most modern power grid. We have the greatest share of renewable energies. They are very volatile.

Power grids will face huge requirements to adapt and integrate in the future. It requires high-technology and digitalisation, sectors in which Germany will invest. And many neighbouring countries are eager to learn from Germany’s experiences because we have special starting conditions.

Does Germany support the Commission’s proposed goal of being carbon neutral by 2050?

For many years now, we have agreed to reduce CO2 emissions by 80 to 95% by 2050. We are seeing many countries having difficulties in reaching their goals by 2020 or 2030.

And that is why we believe these goals should not continue developing without knowing whether these can be fulfilled. Instead, we should focus on reaching a breakthrough in terms of climate protection by 2030. And on that basis, we should decide what the final goal for 2050 should be.

I do not think it is good to always decide on more ambitious goals without knowing with which instruments we can reach such goals. We have to protect the environment, but we also want to keep our economic strength in Europe.

And thirdly, we want to ensure that what we do is taken over and implemented in other countries such as China, India, the US, Vietnam, Indonesia. Because decisions on climate protection are not only made in Europe, but also where global emissions are strong.

China emits close to ten times more CO2 than Germany, meaning there needs to be a discussion with China on what steps need to be taken. China has implemented the EU’s emissions trading system. That was an important step, for which I was strongly engaged as Environment Minister.

But, also in Germany, not all problems can be solved by the emissions trading system. And that is why we need to continue having discussions on what next steps we need to take.

Can we reach the EU’s goal of achieving a 32% share of renewables? If so, how will Germany contribute?

I advocated for a goal of 30%. We then agreed on a compromise with the European Parliament. We cannot precisely say, today, how this will precisely develop, but we have to try to reach this goal. By 2030, 65% of Germany’s energy supply will be covered by renewable energies.

Generally, the use of renewable energies is not as high. This is the case for housing, transport and agriculture, where the proportion of renewables is still low.

We are now investing in so-called “Real-World Laboratories” to find out whether industry measures, such as the transformation of renewable energies into clean hydrogen, with which heat can be produced, cars and machines operated.

It is all a very important process because we can only reach these goals if we are more innovative than before. The state needs to bet on new technologies by supporting a smart research and development policy.

How will Germany reach CO2 emission goals with regard to cars? Are German car manufacturers sufficiently ambitious for your electrification plans? Can Germany implement the needed charging infrastructure?

We invest a lot in the charging infrastructure. It is a process that we also need to consider from a European perspective, because we need to make sure the French car driver is able to charge his batteries in the Saarland, Luxembourg or in Belgium without bureaucratic difficulties, meaning cards, chips should be recognised everywhere.

The second point is that in Germany, and in Europe, there will be more and more e-cars so that the climate goals can be reached. For this, we also need batteries. That is why, together with my French colleague Bruno Le Maire, we launched an initiative for a European battery cell production.

To make this possible, we formulated a request for the first tender. And I hope Europe will prove it is capable, despite technological challenges, to consolidate its position on the global market with smart and new products.