Connect with us

Hi, what are you looking for?

Capital Business
Capital Business


Merkel defends export Germany

BERLIN, June 15 – Chancellor Angela Merkel defended on Monday Germany\’s heavy dependence on exports that has made Europe\’s largest economy one of the biggest casualties of the global recession.

"Are we too dependent on exports? I believe there is no alternative to being a country with strong exports," Merkel told a conference of the country\’s main industry association, the BDI.

"Otherwise we are putting our standard of living at risk," she said.

Germany is the world\’s biggest exporter of goods, with particular strengths in machinery, chemicals and cars, and has been hit hard by the collapse in demand around the world for its products.

The German government expects the economy to shrink by around six percent this year, the second biggest slump among advanced economies after Japan.

Merkel reiterated that it was important to tackle the causes of the financial crisis and the global downturn, putting into practice the decisions that were made at a summit of the Group of 20 major economies in London in April.

"We have a huge interest in tackling the causes of this crisis," she said.

She also rejected widespread criticism from firms, experts and other countries that her government was slow to act when the financial crisis hit the global economy in 2008, or that it was not doing enough.

Germany\’s two stimulus packages, combined worth more than 80 billion euros (111 billion dollars), are also boosting demand for imports from other countries, "which is of clear benefit to the world economy," Merkel said.

Advertisement. Scroll to continue reading.

The conservative chancellor, running for a second term in general elections on September 27, also defended supporting a rescue of General Motors\’ Opel unit with taxpayers\’ money while letting retailer Arcandor file for insolvency.

Arcandor, she said, was in trouble before the crisis hit Germany last year, and therefore is not entitled to receive funds and loan guarantees from a government package set up to help German firms through the downturn.

"It was not linked to the financial crisis. It may have exacerbated the problems, but there were weaknesses before the crisis," she said. "And insolvency does not have to mean that the company or jobs… will disappear."

Letting Opel file for insolvency would have been too complex, however, because of its ties to GM and because of differences in regulations among other European countries where GM has factories like Britain or Spain, she said.

Merkel\’s government decided last month, days before GM filed for bankruptcy protection in the US, to support a Russia-financed takeover of Opel by Canadian auto parts maker Magna with state loans and loan guarantees.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...