EADS CEO Louis Gallois calls for an ambitious European industrial policy
Time is running out for countries such as Greece, Portugal, and Spain, who are engulfed in a vicious circle of debt reduction, high exchange rates for the euro, and an inability to compete on the international stage.
Even French industry is not in a good position. They predominantly make products of average quality and suffer from high labor costs. The value it adds nationally has – in contrast to Germany – clearly declined in the last few years. More than half a million jobs have been lost in that time.
Germany Does It Better
Gallois thinks that Germany, which maintained its economic success through the crisis, serves as the standard for comparison. The French head of EADS made some approving remarks and underlined why things are going better in Germany.
German industry offers innovative products, produces at comparatively lower costs, and thus achieves superior competitiveness. “My washing machine is from Siemens and I do not know of a superior product.”
The German boom is supported by a much wider base of small and medium-sized businesses compared to France. The country also has a culture of dialogue between industry and unions and has an exemplary system of vocational training.
Stronger Together
So why don’t France and Europe just use the German model? One cannot just copy the German system, said Gallois. European economies are too varied. But “German experiences should inspire us.”
France must be more innovative and lower its fiscal and social burdens. And this will require a beneficial shock, as Germany experienced at the end of the 1990s. “Today, Germany is harvesting the fruits of the 2010 agenda.” The point is that we should learn from one another, emphasized Hartmut Mehdorn. “We need to combine the best of both countries.”
Both speakers pointed to EADS as an example of successful European industrial policy and Franco-German cooperation. “Why isn’t there more of that?” asked Mehdorn, while calling for more integration projects.
“Industry is in trouble throughout Europe,” warned Gallois. “We will soon be at a disadvantage compared to developing countries.” Competitive industry is at the heart of our welfare. “We must show the same degree of ambition for developing our industries as developing nations.” It is up to Germany and France to work together to help bring Europe out of the crisis.
The event was organized in cooperation with the DGAP, EADS, and Stiftung Genshagen.