Germany - Europe's New Superpower 2

5: A popular country

Germany’s handling of the euro crisis aroused associations with the Nazi – infamous cliché (worn-out expression) about the Germans, that they are strict people of order. During street demonstrations in Athens, some posters bearing Hitler’s mustaches on Merkel were displayed, and several European publications made headlines depicting the German Chancellor as authoritarian, possibly a cold and cynical robot.

Most Europeans, on the other hand, seem to have had an increasingly positive view of Germany and Germans. According to an annual poll conducted by the BBC, Germany has in fact been the world’s most popular country for three of the last four years. Even the British, who, like Norwegians, have trouble thinking of Germany without associations to World War II, turn their thumbs up for today’s Germans.

Many politicians around Europe also view with admiration a Germany that has managed to build a well-functioning democracy and a solid economy in an otherwise crisis-stricken era. They note in particular that Germany refutes the hypothesis that the Western world is doomed to lose in the global competition with low-wage countries in Asia. Germany has not only retained its industry, but also manages to finance one of the world’s most comprehensive welfare states.

The contrast to the UK is particularly striking, where the volatile financial industry has replaced the relocated industry as an economic “engine”, while the welfare state has been cut to such an extent that students have to pay tens of thousands a year in fees to study.

6: The German model

If we are to identify the reasons for the Germans’ economic success, we often talk about “The German model”. It is characterized by a number of conditions:

  • Medium-sized, export-oriented companies play the main role. When the economics professor Hermann Simon made a list of all the companies that are world leaders in their product categories – he came to 2734 – he found to his amazement that almost half – 1307 – were in one country – Germany. In the small town of Windhagen alone with 4260 inhabitants, there are three world-leading companies. This applies to Wirtgen (asphalt milling machines), JK (tanning equipment) and Geutebrück (monitoring systems).
  • The business community has secure access to capital. Across the country, there are savings banks (Sparkassen) that are actively involved in the local business community, and thus secure capital for companies with growth potential. The banks are most often owned by local authorities, and can consequently be run without pure profit considerations. The benefits of this became clear during the financial crisis. Companies all over Europe then experienced that the banks tightened their lending. In Germany, the savings banks turned up the cash flow as a kind of counter-cyclical measure.
  • The education system has strong links to the business community. More than half of the young people take on apprenticeship contracts in the so-called dual model. There they spend 1-2 days a week in vocational school and 3-4 days in a company. About 60 per cent of apprentices get a permanent job in the company when the apprenticeship is over, and less than ten per cent of those who have completed such an educational course are unemployed one year after they have finished. As many as 344 different vocational educations, from baker and carpenter to toy builder and hearing aid acoustician, can be taken in this way. 470,000 companies have certified apprenticeships. This is a win-win system for students, companies and society as a whole. Students receive the qualifications that the labor market demands, while the German business community, which is perhaps the most specialized and innovative in the world, receives public support to educate the labor force they actually need.

According to ALLCOUNTRYLIST.COM, there are also several other features of the German model, not least the stabilizing fact that there is cross-party agreement on the long lines of economic policy, in contrast to countries that are more polarized. But the above three probably have the main credit for Germany being the « export world champion ». The country has had a trade surplus since 1952 – and today exports about as much as the United States, even though the Americans have a much larger economy and four times as many inhabitants. Although China exports the most, it is regularly beaten by the Germans in terms of the annual trade surplus.

7: An institution builder

Germany was the world’s leading cultural nation in the period up to the First World War, and Germans have invented an overwhelming proportion of the things that define our modern world (from the television and the computer to the car and the jet engine). But the experience of Nazism made it difficult to be proud of being German. The exception was the successful economic development in the post-war years. A country in ruins then rose in a few years to become one of the richest in the world.

Germany - Europe's New Superpower 2