Rewriting: Navigating through cyclical fluctuations and enhancing long-term growth in the German economy requires careful consideration of the current economic landscape. The interconnectedness of global economies, coupled with internal and external challenges, has contributed to Germany’s economic stagnation in recent years. By analyzing the drivers of this stagnation and exploring potential structural reforms, we can pave the way for a more resilient and prosperous future. Additionally, collaboration at the European level is essential to create a supportive policy framework that fosters growth and stability across the region. Navigating cyclical fluctuations and boosting long-term growth in the German economy is crucial. As we observe the current challenges, there is a need for cautious optimism moving forward. The short-term obstacles faced by the German economy are substantial, but there are reasons to believe in a brighter future. Before delving into policy measures to enhance growth in Germany, it is important to acknowledge the broader geopolitical context. While the war in Ukraine may seem distant to some in Germany, the gravity of the situation is not lost on the new government. It is essential for Germany to take the necessary steps to bolster European security in these uncertain times. To improve the economic foundation of a politically strong Europe, Germany must focus on increasing its growth potential. Addressing labor supply issues is paramount, especially as the workforce ages and shrinks. Encouraging longer working hours for part-time employees, streamlining migration processes, and retaining skilled workers are key strategies to boost labor supply. Efficiently transforming the energy sector is another critical area for Germany’s growth. Achieving carbon neutrality by 2045 requires significant investments and a cohesive strategy. Standardizing carbon pricing, eliminating climate-damaging subsidies, and establishing a clear framework for the energy transition are essential steps in this journey. Reviving business dynamism is also vital for Germany’s long-term growth. Creating an environment that fosters innovation and entrepreneurship can drive economic prosperity and competitiveness. By addressing these key areas, Germany can navigate cyclical fluctuations and pave the way for sustained growth in the future. Navigating cyclical fluctuations and boosting long-term growth in Germany requires improved conditions for start-ups and business investment. To achieve this, Germany must first reduce excessive bureaucratic burdens that hinder entrepreneurship. The National Regulatory Control Council has identified avenues to streamline regulations and implement EU rules efficiently to reduce compliance burdens. By avoiding «gold plating» and focusing on facilitating start-ups and enhancing innovative capacity, Germany can unleash greater business dynamism. Simplifying administrative processes and expediting approvals are essential for reviving business dynamism. Estonia, a leader in facilitating entrepreneurship, exemplifies efficiency with its fully digital, centralised system for founding a company. In contrast, Germany’s fragmented process requires interaction with multiple authorities and is more time-consuming and costly. Following Estonia’s lead in creating a streamlined process for starting a business can benefit Germany’s economy. At the European level, rigorous structural reforms are crucial for boosting Germany’s growth potential. Europe must address geoeconomic and geopolitical challenges by developing a unified response to threats like erratic US trade policies. Committing to a rule-based international trade order and pursuing free trade agreements with like-minded countries are essential steps. Additionally, enhancing European coordination in defence and achieving autonomy in the payments sector can strengthen Europe’s position in the global economy. Fostering European integration is another key dimension for boosting growth. Simplifying regulations, reducing administrative burdens, and establishing a unified digital marketplace can overcome barriers to cross-border trade in services. Embracing the digital revolution and creating a more integrated European Single Market will promote competition, innovation, and economic growth in the region. Navigating Cyclical Fluctuations and Boosting Long-Term Growth in the German Economy Die deutsche Wirtschaft: Bewältigung zyklischer Schwankungen und Steigerung des langfristigen Wachstums in Deutschland

This is a pre-recorded speech and may vary slightly in delivery.

We will observe the outcomes.

To summarize, the German economy is currently facing challenges, but there is hope for the future.

Before discussing policies to boost growth in Germany, it is important to acknowledge the distant feeling of the war in Ukraine for many in Germany compared to Estonia, where the threat is more immediate. The new German government seems to understand the seriousness of the situation and is likely to take steps to enhance European security.

In a speech in Berlin, I outlined measures to enhance Germany’s growth potential. These include increasing labor supply, transforming the energy sector efficiently, and reviving business dynamism.

One crucial aspect is addressing labor supply by increasing working hours for part-time employees, improving integration for migrants, and tapping into the potential of older workers.

Efficiently transforming the energy sector involves adopting a comprehensive strategy, implementing carbon pricing, and abolishing climate-damaging subsidies.

Reviving business dynamism requires creating a more dynamic business environment in Germany. Enhancing conditions for start-ups and business investment is crucial for guiding the German economy towards stronger growth. This can be achieved by reducing bureaucratic burdens, facilitating start-ups, and streamlining administrative processes. Following Estonia’s efficient digital system for founding companies could serve as a model for Germany to improve its business environment. Additionally, at the European level, addressing geoeconomic and geopolitical challenges and boosting European integration can further contribute to economic growth and prosperity. Implementing these measures can help Germany and Europe as a whole achieve greater economic success. Dies dient als Mechanismus, um den Bürgern einen einfacheren Zugang zu Dienstleistungen in anderen Mitgliedstaaten zu ermöglichen. Durch die Beseitigung von ungerechtfertigten Hindernissen können wir das volle Potenzial des Binnenmarktes erschließen, die Wettbewerbsfähigkeit steigern und sicherstellen, dass Europa global führend in Innovationen bleibt. Energie ist ein weiterer Bereich, in dem eine tiefere europäische Integration erhebliche Vorteile bringen kann. Die europäischen Energiemärkte sind noch fragmentiert, mit Infrastrukturengpässen und nationalen Grenzen, die den effizienten Stromfluss einschränken. Ein integrierter europäischer Strommarkt würde es uns ermöglichen, Angebot und Nachfrage über Grenzen hinweg besser abzustimmen, die Abhängigkeit von teuren Reservekraftwerken zu reduzieren und den Übergang zu erneuerbaren Energien zu beschleunigen. Um dies zu erreichen, müssen wir in grenzüberschreitende Infrastruktur investieren, unsere Netze modernisieren und regulatorische Hindernisse beseitigen, die den Energiehandel behindern. Durch Zusammenarbeit können wir nicht nur unsere Klimaziele erreichen, sondern auch Europas Energieversorgungssicherheit und Wettbewerbsfähigkeit in einer sich rasch verändernden globalen Landschaft stärken. Zuletzt müssen wir die Integration der europäischen Finanzmärkte vertiefen. Die Europäische Spar- und Investitionsunion kann die notwendige Finanzierung für zusätzliche Investitionen mobilisieren, z. B. für den grünen Übergang und die Stärkung der Verteidigungsfähigkeiten. Hier sind drei Schlüsselelemente im Spiel. Erstens kann die Europäische Spar- und Investitionsunion dazu beitragen, die Finanzierungsquellen zu diversifizieren. Eine verbesserte Zugang zu Eigenkapital, marktbasierten Fremdfinanzierungen und Risikokapital ermöglicht die Finanzierung eines breiteren Spektrums von Investitionen. Zweitens wird die Europäische Spar- und Investitionsunion durch die Harmonisierung von Vorschriften und den Abbau von Barrieren grenzüberschreitende Investitionen erleichtern. Dies würde die Bildung von paneuropäischen Unternehmen erleichtern und es ihnen ermöglichen, kostensenkende Skaleneffekte zu nutzen. Dieser Punkt spiegelt Ragnar Nurskes «balanced growth theory» wider. Angewandt auf die Situation von Hochlohnländern könnte man ihn folgendermaßen umschreiben: Die begrenzte Größe des Binnenmarktes kann ein Hindernis für die Kapitalanwendung durch Unternehmen oder Branchen darstellen und somit ein Hindernis für das allgemeine Wirtschaftswachstum darstellen. Drittens wird die Europäische Spar- und Investitionsunion Europa für externe Investoren attraktiver machen. Dies würde sowohl die Menge an verfügbaren Finanzierungen erhöhen als auch deren Kosten senken. Jüngste politische Maßnahmen der US-Regierung haben internationale Investoren dazu veranlasst, den Status des US-Dollars als sicheren Hafen in Frage zu stellen und die relative Attraktivität Europas als Investitionsstandort im Vergleich zu den USA neu zu bewerten. Ein Wachstum in der EU zu fördern und sie zu einem attraktiven Investitionsziel zu machen, bietet eine Chance für Europa. The former name of the school was the Domschule zu Reval, and classes were conducted in German.

Estonia and Germany have both faced economic stagnation in recent years due to the impact of the COVID-19 pandemic. Given Estonia’s historical struggle for independence, one could say: «once more.»

It is evident that the new German government recognizes the seriousness of the situation and is likely to take the necessary actions to strengthen European security.

In order to boost growth, there are three key national policy measures that need to be implemented.

Firstly, increasing the labor supply is crucial, especially as the number of working individuals is declining due to retirement. Measures such as increasing the working hours of part-time employees, improving childcare and elderly care facilities, and simplifying recognition procedures for migrants can help enhance labor supply.

Secondly, transforming the energy sector efficiently is essential to achieve carbon neutrality goals. Implementing a standardized carbon pricing system and abolishing climate-damaging subsidies are important steps in this direction.

Lastly, reviving business dynamism by reducing bureaucratic burdens and creating better conditions for start-ups and business investment is vital for fostering a stronger growth path for the German economy. By implementing these measures, Germany can enhance its growth potential and strengthen its economic foundation. We need to avoid «gold plating,» which involves adding unnecessary layers of regulation at the national level. Instead, we should focus on supporting start-ups and boosting innovative capacity. Many company founders in Germany face bureaucratic hurdles and delays, which hinder business growth. Creating a streamlined process for aspiring entrepreneurs to handle all tasks related to starting a business can promote business dynamism. Embracing innovative start-ups, leveraging the domestic market, and providing suitable funding opportunities are crucial steps in this direction.

Simplifying administrative procedures and expediting processes are essential for revitalizing business dynamism. Faster planning and approval procedures can facilitate infrastructure modernization. Additionally, digitalization, automation, and standardization can streamline administrative processes, making them more efficient.

Estonia and Germany differ significantly in their approaches to starting businesses. Estonia’s fully digital, centralized system exemplifies efficiency, allowing entrepreneurs to complete the process quickly with minimal bureaucracy. In contrast, Germany’s process is more fragmented, requiring interaction with multiple authorities and more time and effort. Germany can learn from Estonia’s efficient system and streamline its own processes to support entrepreneurship better.

Implementing structural reforms at the national level is crucial for boosting Germany’s growth potential. However, addressing certain issues requires progress at the European level. Developing a unified European response to geoeconomic and geopolitical challenges, enhancing European integration, and promoting a truly unified digital marketplace are essential steps in ensuring Europe’s competitiveness and innovation leadership. Los mercados energéticos de Europa siguen estando fragmentados, con cuellos de botella en la infraestructura y fronteras nacionales que restringen el flujo eficiente de electricidad.

Un mercado europeo de electricidad más integrado nos permitiría alinear mejor la oferta y la demanda a través de las fronteras, reducir la dependencia de costosas plantas de energía de reserva y acelerar la transición hacia energías renovables. Para lograr esto, necesitamos invertir en infraestructuras transfronterizas, modernizar nuestras redes y eliminar los obstáculos regulatorios que dificultan el comercio de energía. Al colaborar, no solo podemos alcanzar nuestros objetivos climáticos, sino también mejorar la seguridad energética y la competitividad de Europa en un panorama global en constante evolución.

Por último, debemos profundizar la integración de los mercados financieros europeos. La Unión Europea de Ahorro e Inversión puede ayudar a movilizar la financiación necesaria para inversiones adicionales, como por ejemplo, para la transición verde y el fortalecimiento de las capacidades de defensa.

Tres elementos clave entran en juego aquí.

En primer lugar, la Unión Europea de Ahorro e Inversión puede ayudar a diversificar las fuentes de financiación. Mejorar el acceso a capital propio, financiamiento basado en el mercado de deuda y capital de riesgo permitirá financiar una gama más amplia de inversiones.

En segundo lugar, la Unión Europea de Ahorro e Inversión facilitará las inversiones transfronterizas armonizando regulaciones y eliminando barreras. Esto facilitaría la formación de empresas paneuropeas, permitiéndoles aprovechar economías de escala que reducen costos.

Este punto resuena con la «teoría del crecimiento equilibrado» de Ragnar Nurske. Adaptada a la situación de las economías de altos ingresos, uno podría parafrasearlo de la siguiente manera: El tamaño limitado del mercado doméstico puede constituir un obstáculo para la aplicación de capital por parte de empresas o industrias, lo que a su vez representa un obstáculo para el crecimiento económico en general.

En tercer lugar, la Unión Europea de Ahorro e Inversión hará que Europa sea más atractiva para inversores externos. Esto aumentaría tanto la cantidad de financiación disponible como reduciría su costo.

Recientes acciones políticas de la administración de Estados Unidos han llevado a inversores internacionales a cuestionar el estatus de refugio seguro del dólar estadounidense y a reevaluar la atractividad relativa de Europa como destino de inversión en comparación con Estados Unidos. Impulsar el crecimiento en la UE y convertirla en un destino de inversión atractivo presenta una oportunidad para Europa.

En resumen, señoras y señores, permítanme resumir brevemente y compartir algunas reflexiones finales.

Comencé mi discurso señalando que el crecimiento económico ha sido débil tanto en Alemania como en Estonia en los últimos años. En el caso de Alemania, la economía está actualmente navegando una combinación de fluctuaciones cíclicas y desafíos estructurales.

Este es un momento crucial, un momento para la reflexión, la acción decisiva y el liderazgo audaz. Estoy optimista de que el nuevo gobierno alemán abordará los problemas estructurales con determinación y ayudará a su economía a convertirse en uno de los motores de crecimiento de Europa.

En vista de las incertidumbres geopolíticas y geoecómicas actuales, el papel de Europa es más crucial que nunca. Aprovechemos esta oportunidad para profundizar la integración europea y emerger más fuertes juntos.

Si tomamos las acciones correctas, estoy seguro de que nuestras dos economías compartirán pronto nuevamente dos resultados clave: un crecimiento económico vibrante y una seguridad duradera.

Por ahora, anticipamos con entusiasmo nuestra discusión aquí y mis conversaciones continuas con el Gobernador Müller. Espero intercambiar ideas y tener la oportunidad de aprender unos de otros. Gracias por su atención. The Domschule zu Reval, which was the former name of the school, conducted its lessons in German. Given Estonia’s tumultuous history and ongoing struggle for independence, one could say: «once again.»

It is evident that the new German government recognizes the seriousness of the situation and is poised to take the necessary actions to strengthen European security.

In my view, there are three key national policy measures that can be implemented to boost growth in Germany. These include increasing the labor supply, efficiently transforming the energy sector, and reviving business dynamism.

Addressing the labor supply issue is crucial, particularly with the decline in the number of working individuals as baby boomers retire. Measures such as increasing working hours for part-time employees, facilitating labor market-oriented migration, and retaining skilled workers can help enhance Germany’s growth potential.

Efficiently transforming the energy sector is another key area that needs attention, especially as Germany aims for carbon neutrality by 2045. Implementing a comprehensive strategy, standardizing carbon pricing, and abolishing climate-damaging subsidies are essential steps in this transition.

Reviving business dynamism is also vital for driving growth in Germany. This can be achieved by reducing bureaucratic burdens, creating a more conducive environment for startups and business investments, and implementing regulations efficiently.

By focusing on these three areas, Germany can enhance its growth potential and contribute to a stronger European economy. We need to avoid «gold plating,» which involves adding unnecessary layers of regulation at the national level. Instead, we should focus on supporting start-ups and boosting innovative capacity. Many company founders in Germany face bureaucratic hurdles and delays, hindering business growth. Creating a streamlined process for entrepreneurs to start a business can promote business dynamism. Embracing innovative start-ups with access to funding and a large market is key.

Simplifying administrative processes and expediting procedures is crucial for revitalizing business dynamism. Faster planning and approval processes can speed up infrastructure modernization. Digitalization, automation, and standardization can all help streamline administrative tasks.

Estonia excels in efficiency with its fully digital system for founding a company, while Germany’s process is more fragmented and time-consuming. Following Estonia’s lead in simplifying the process can benefit Germany.

European-level solutions are needed to address geoeconomic and geopolitical challenges, including a unified response to trade policies and enhancing defense coordination. Europe should also work towards autonomy in the payments sector with a digital euro.

Boosting European integration, particularly in the services sector, can unlock the full potential of the Single Market and drive innovation. Simplifying regulations and establishing a unified digital marketplace are essential steps in this direction. Energy integration at the European level can also bring significant benefits. Europe’s energy markets remain fragmented, hindered by infrastructure bottlenecks and national boundaries that impede the efficient flow of electricity. A more integrated European electricity market is essential to align supply and demand across borders, reduce reliance on expensive reserve power plants, and expedite the shift to renewable energy. Achieving this goal requires investment in cross-border infrastructure, grid modernization, and the removal of regulatory barriers that hinder energy trade. Through collaboration, Europe can not only meet its climate objectives but also enhance energy security and competitiveness in a rapidly evolving global context.

Furthermore, deepening the integration of European financial markets is crucial. The European Savings and Investments Union can help mobilize funds for additional investments, including those for the green transition and defense enhancement. This union can diversify funding sources, facilitate cross-border investments, and make Europe more attractive to external investors.

In conclusion, addressing these issues will lead to vibrant economic growth and lasting security in both Germany and Estonia. It is a pivotal moment for reflection, decisive action, and bold leadership. By seizing the opportunity to deepen European integration, we can emerge stronger together in the face of geopolitical and geoeconomic uncertainties. Thank you for your attention, and I look forward to engaging in discussions and learning from Governor Müller and others. Can you please rewrite this sentence? Could you please rewrite this sentence? Can you please rewrite this?

QUELLEN