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Thread: In Search of the Next German Economic Miracle

1. Germany published a new industrial strategy named “Industrial Strategy 2030” – mirroring China’s “Made in 2025” and Saudi Arabia’s “Vision 2040.”
2. According to Die Welt, a major mainstream German newspaper, the German government aims to boost manufacturing from 23.4 percent to 25 percent of the economy by 2030 in part by providing support for key German companies like Siemens, BMW and Deutsche Bank.
3. The plan also identifies nine strategic sectors ranging from environmentally friendly technology to defense and aerospace equipment that will be the focus of the national strategy.

4. The German Federal Ministry of Economic Affairs and Energy (BMWi) presented a new industrial plan for Germany, which foresees industry’s share of gross value added in Germany growing to 25%, as well as support for ….
4A. …the promotion of industrial leadership nationally, in Europe and globally, and investment in Artificial Intelligence (AI).
5. German economic minister Peter Altmaier criticized the impending decision to block the Siemens-Alstom merger, calling for competition rules to be reformed to allow strong European champions able to compete with big US and Chinese players to merge.
6. BMWi argues that …. Europe and Germany lag behind in … key industrial sectors, and because other [countries] also have extensive – even protectionist – industrial policies in place, it is time for Germany and Europe to follow suit.
7. The paper makes clear that any German industrial policy is be extension European, and outlines plans to launch a conversation with European colleagues to develop a common European strategy for 2030 and create a European Council configuration of industrial ministers.
8. The central goal of the strategy is to work with industry to shore up economic and technological competences, competitiveness and industrial leadership in relevant sectors nationally, in Europe and globally … [through] state intervention….
9. <unquote>

Read more here:…
10. Hmmmm. Did you catch that last bit: “through state intervention.” I mean, what could possibly go wrong with the German government getting (more) involved in German industry? It sure has worked great for us, hasn’t it? <sarc off>
11. Wait! The US gov’t got deeply involved in the medical industry and public education. How are those two doing these days? Or the 2008 bank bailouts (at the cost of trillions to taxpayers). Or green energy (sic) “investments” made by Obama? How much was wasted there? Etc., etc.
12. One would have thought that US policy makers had learned from the lessons of the Soviet 5-year plans in which the Communists picked the winners and losers in their economy and then tap-danced when industries were ruined and plans went unmet!
13. The market beats central planning every damn time! Let’s see which industry sectors German government intervention will begin to (or further) ruin. Once gov’t gets its hooks in, they never back off until forced to. That will happen in Germany, too.
13A. But maybe they're banking on "traditional German efficiency" to counteract the inefficiencies of socialism? After all the GDR had the reputation for being the "best run Soviet Bloc country." But it went tits up along with the rest, too, didn't it?
14. The German Industrial Policy strategy listed the areas in which Germany is a world leader and which the strategy would presumably attempt to reinforce. They include: the steel, copper and aluminum industries; the chemical industry; mechanical and plant engineering; ….
14A. … the automotive industry; the optical industry; the medical device industry; the GreenTech sector; the defense industry; the aerospace industry; and additive manufacturing (3D printing).
15. The Germans (together with the French) have essentially controlled European Union economic policies for decades. One key goal of the European “common market” was the globalist panacea of “free trade.” That coupled with socialist policies has crippled European industry.
16. This new strategy tacitly realizes past failures but proposes more not less government involvement in the private sector. Interestingly enough, the strategy also calls for the EU to “punish competition distortion in other countries” such as dumping and monopolistic activities
17. Hmmm. That sure seems like they’re thinking about the use of tariffs to correct the “predatory behaviors” of the Chinese (and others). Maybe they are learning something by watching the ongoing US-China trade disputes and the value of US-imposed tariffs as leverage!
18. Unlike China, Germany has a track record of conceptualizing and implementing these kinds of ambitious plans, but even mighty Germany will face many obstacles before it can achieve these goals. And not just on the economic front, as their demographics problem is YUUUGE.
19. Some of the elements of the strategy, especially those aimed at boosting German industry, may also set the stage for future disagreements between Berlin and Brussels.
20. The EU bureaucrats will likely resist measures that adversely impact other EU nations and prove difficult to implement across the smorgasbord of nations that make up the EU. We shall see have to watch event! ///The end.
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