KEYNOTE

THE WORLD IN DISORDER— END OF THE GROWTH CYCLE?

With her keynote speech, Dr. Daniela Schwarzer, director of the German Council on Foreign Relations, gave the audience an overview on the current geopolitical development in Europe and the world, and its impact on the economy. Following is a summary of the keypoints.

To make sure that a dialogue between companies and policy makers is actually happening, institutions like the German Council on Foreign Relations are needed to react to the fast-developing world.

This dialogue is important, as we live in a world that gets more and more risky and insecure. Business is already adjusting to these geopolitical and geo-economics challenges and changes; politics has to do so, as well. But, currently, German and European politics are struggling to adapt to these developments.

Also, we have to learn that the stability and the shared Western value system that we have thought anchored our environment is not as sound as we thought.

The free trade market and the peaceful resolution of conflict were standards on which we were able to rely in the past. But the world in which we live has seen a return to major conflicts.

Of key importance to continue living with these shared values are transatlantic relations, the transatlantic trade and the transatlantic dialogue.

Difficult points from a European or German point of view can be the escalating conflict between the United States and China or the question of how to deal with the problems around climate. Another big point is security and the question whether Germany should spend 2% of its BIP to strengthen security. Regarding these points, common ground has to be found to make sure that problems can be solved together and in a bilateral way.

An important matter is on how to deal with China.

There is the new idea to bring the heads of all 26 European Union governments together with the Chinese administration, which can get difficult, because China is a polarizing matter in the European Union.

The French president, Emmanuel Macron, took a first step in inviting Jean-Claude Juncker and Angela Merkel to meet the Chinese president.

The relationship between the United States and China is of key importance for the development and competitiveness of Europe.

Another big player in this context is Russia. It is maybe less important from an economic standpoint, but more from a political and security perspective. Russia has violated several European and international norms.

How has the relationship with Russian been brought forward? Given the behavior of Russia regarding hacks, fake news or cybercrimes, Europe has to find balance between pushing back and finding the constructive dialogue with Russia. At the end of the day, Russia is still a neighbor that has to be dealt with, but it is also clear that rules have to be made and a clear border of what is acceptable has to be shown.

Another problem in our world is the current rise of populism.

To handle all of these problems, it is of key importance to manage international politics, domestic politics and economic competitiveness all together. The balance has to be found again—also in the social way, to not leave someone behind.

All these points have big influence on the question of the prospects of economic growth worldwide.

Whether the Eurozone is strong enough to handle a crisis like 2007/2008 is questionable. The European Union still has a lot of work to do and can be seen as an unfinished house. But at the same time, a lot of projects are on track that will strengthen the European Union for the future.

After the keynote speech, Mrs. Schwarzer also responded to a question from the audience about how Germany’s role in Europe has to be seen as Emmanuel Macron and France are more and more taking the leading role.

The roles in the European Union and the Franco-German relationship are changing. The weaker French government from past days is changing to be more pushing forward and enthusiastic since the election of Macron, and Germany’s position is getting less strong with a fragile domestic coalition. It will be interesting also to see the Franco-German summit in October: Mrs. Schwarzer expects there will be a push from France to Germany for discussing high politics and strategically important questions.

Keynote by
Dr. Daniela Schwarzer,
German Council on Foreign Relations

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M&A IN THE FINTECH INDUSTRY

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