Dr. Walther Leisler Kiep Chairman Emeritus, Atlantik Brucke
WHAT IS THE REAL ECONOMIC AND POLITICAL SITUATION IN GERMANY TODAY?
Chairman: John C. Koopman
President, The Empire Club of Canada
Head Table Guests
Heather Ferguson, Director, Development and Alumni Relations, Faculty of Nursing, University of Toronto and Director, The Empire Club of Canada; Kumiko Mackasey, Grade 12 Student, North Toronto Collegiate Institute; The Reverend Vic Reigel, Christ Church, Brampton; Eckart von Klaeden, Member of the German Bundestag, Minority Whip, Berlin; Dr. Beale Lindemann, Executive Vice-Chairman, Atlantik Brucke Berlin; Dr. Klaus Rupprecht, German Consul General, Toronto; William G. Whittaker, QC, Partner, Lette Whittaker and 2nd Vice-President, The Empire Club of Canada; The Hon. Peter Stollery, Senate of Canada; Christian Lange, Member of the German Bundestag and Member of The Committee of Economy and Labour, Berlin; Dr. Albert Maringer, President and CEO, Siemens Group Canada, and Chairman, Canadian-German Chamber of Industry and Commerce; and Uwe Harnack, President and CEO, Canadian-German Chamber of Industry and Commerce.
Introduction by John Koopman
When baby-boomers like myself think of Germany, we generally think of two truths--both of which have recently come under challenge.
The first challenged truth is the power of the post-war German economy. My generation has always known Germany as the economic motor of Europe.
The Germany economy was devastated in the Second Great War. Its renaissance can be attributed to inspired public policy on both sides of the Atlantic. In the United States it manifested itself in the Marshall Plan and in Germany under Minister of Finance, and later Chancellor, Ludwig Erhard in the rapid elimination of price controls. Good public policy was married with the post-war industriousness of the German people who buried themselves in work in order to build a better future, and perhaps in part to take their minds off the past.
However the vaunted post-war German work ethic seems to be fading. The average German now works 1,450 hours per year, while the average American about 1,850. Germany faces an aging population and massive un-funded pension obligations. Onerous tax burdens have stifled foreign investment and some western commentators describe the German economy as sclerotic and awash in over-regulation.
Recent headlines in the Globe and Mail and the National Post read:
"Germany breaks EU Deficit Limit" "Over 4 million jobless in Germany" "Germany faces Shrinking Cities"
Yesterday's Post ran a story suggesting that Chancellor Schroder might not survive an imminent parliamentary vote as left-wing rebels were defying his pro-business reforms.
Frankly I do not know how seriously I should take these issues and am looking forward to Dr. Kiep's comments on the German economic situation.
The second truth under pressure is what Dr. Kiep in his many publications has called Germany's "unwritten second constitution." That is good German-American relations. These good relations date back to Konrad Adenauer who chose resolutely western-looking Bonn as his provisional capital and tied Germany firmly into the Atlantic orbit. In fact Adenauer never liked Berlin very much, he did not visit it until a year after his election, and when discussion turned to Berlin he was known to mutter: "Asia ... Asia."
There was a time when German support for American foreign policy could be taken for granted. No more. In a shock to many of us, Chancellor Schroder won the last election on a campaign that focused on rejection of American policy in Iraq.
The Atlantic Bridge is an organization dedicated to building close relationships between Germany and the United States. Dr. Kiep was appointed President of the Atlantic Bridge in 1984 and recently Chairman Emeritus.
Lady Thatcher addressed the Atlantic Bridge at a conference just four months ago. As you might expect from Lady Thatcher, she noted that bridges need to be defended and recalled Horatius's defence of a narrow bridge over the Tiber in McAulay's "Lays of Ancient Rome." McAulay wrote:
In yon strait path a thousand May well be stopped by three Now who will stand on either hand And keep the bridge with me?
Dr. Kiep has been keeping and defending that bridge, that link across the Atlantic, throughout his career.
Dr. Kiep has been a central cog in the workings of German power for decades. He is a former special envoy for Chancellor Helmut Schmidt, and a former special emissary for Chancellor Helmut Kohl. For 21 years he was the Treasurer of the CDU. Many of you may also know him as the Chairman of the International Advisory Board of Marsh & McLennan. He may pithily be described as the James Baker of German politics.
We are looking forward to hearing his insider's view of the current economic and political situation in Germany.
Ladies and gentlemen, please join me in welcoming Dr. Walther Leisler Kiep to the podium of the Empire Club of Canada.
Walther Lelsler Klep
Thank you very much for this wonderful introduction on the occasion of the meeting of the Empire Club. I'm greatly flattered by your statement and the brief CV of me that you cited of course adds to my pleasure. I only wish my parents were here to hear it because I'm sure that my father would have liked everything you said and my mother would have believed every word you spoke.
It is indeed a great, great pleasure to be back in Toronto. I did spend time here and had the great pleasure and honour to serve on the board of the Bank of Montreal for eight years and got to know Canada and Toronto very
well. It is wonderful to be back with a German parliamentary delegation visiting the Province of Ontario.
You have mentioned the economic conditions in Germany and you have voiced a certain disappointment with the performance of the German economy. I think the German economy is performing quite well. Many of our problems arise from an over-bureaucratization, too many rules and also a very great difficulty in getting the people to understand that the reunification of Germany has required financial transfers of an unprecedented size every year. Fifty billion marks and now euros go to the East to create an infrastructure to solve problems and yet we have a long, long way to go until this is all over. But we find ourselves, as I stand here, in the middle of a very, very radical reform of conditions in Germany. We will be witnessing in the coming months, successfully we hope, the biggest economic and social reforms that the country has undertaken after its foundation in 1949.
We do remember the help and the support that we got from all of our western friends, and particularly also from Canada after World War Two. Canadians were stationed in Germany for a long time after the war and their departure was a sad moment. In the villages in the Black Forest where the Canadian Royal Air Force was stationed, some people hung black flags to convey their sorrow about the Canadians leaving.
Unfortunately, we did not have a chance to enjoy the greatest triumph of our alliance and I'm speaking of the end of the Cold War, I'm speaking of the unification of Germany and I'm speaking of the liberalization of Eastern Europe, where countries are now becoming member states of the European Union. Too many people felt that, as the Cold War was over and the Soviet Union had disappeared, we would have a simple world and I recall the book by a famous American author who said, "The end of history has come."
The peace dividend that we enjoyed in the years of the nineties was used and spent and today we find ourselves in the midst of very, very difficult reforms which require our people to give sacrifices in order to re-create the growing economy and create new jobs to regain the competitiveness that made Germany what it was and I'm confident that we will succeed.
On the other hand, we're faced with a problem, which all of you share with us, and that is that on 9/11 an event took place which changed the world. America suddenly was at war and this fact, I think, must be understood by everybody in Europe although for Europeans the events were perhaps not as dramatic as they were for the people on the spot who saw the terrible attack and its consequences.
Today we are faced with three or four crisis centres. We have a problem in Iraq. We are trying to build a nation in Afghanistan. We are far from a peaceful settlement between the Palestinians and the Israelis. Iran has become a problem with its endeavour to become a nuclear power and, last but not least, North Korea is on the same track and poses a tremendous threat.
Some positive developments can be reported. NATO has taken over the military presence in Afghanistan with a very substantial German contribution. We are seeing developments in the third world that give us a certain amount of promise of improved relations. But on the other hand we need everybody in Europe and all our resources to cope with the situation in Iraq, where we must create security, a state, a nation and a functioning democracy.
We have had debates over the Iraq war. I think these debates should be over, should be finished, because what we now need is a common energetic activity of the NATO countries of Europe, the United States of America and Canada to solve the problems that lie ahead.
The United States of America will work with its allies but only if its allies agree to the goals of the United States. The United Nations are to be included and will be used and employed if they are in agreement with the ultimate goals of America.
This is a difficult situation and a fundamental change from the role America played after 1945 until recently. The United States of America created the United Nations with the monopoly of power vested in a Security Council. The United States of America created a globalized world and made the world trade free and accessible for everybody. Americans tried war criminals both in Japan and Germany and opened the opportunity to create an international criminal court where politicians who had committed such crimes against humanity could be punished and could be prosecuted. All of these institutions that have been with us for such a long time are now in question, because the United States of America feels that it must be, as the strongest power on earth, in charge and others should follow.
We are stating this with regret, with concern and with sorrow, but I am personally convinced that the American government and the American president after the beginning of the involvement in the Middle East will perhaps reconsider and return to the very successful multilateral policy that American embarked upon after World War Two which made the reconstruction possible and which created a military contingency in the form of NATO that finally won the conflict against the Soviet Union in the Cold War without a shot being fired. This tremendous success, this victory of freedom over dictatorship, is the basis upon which we should continue to deal with the crises that face us. I think it is high time that we put aside the questions that divide us and concentrate on the very, very successful deeds that unite us. I'm personally convinced that in the United States the people of America understand that their allies are there and that their allies
are doing what they can. For my country, I can say that we have over 12,000 soldiers serving in the Balkans and Afghanistan and we are doing additional things like economic support, the training of policemen and the training of soldiers for the newly emerging nations like Afghanistan.
Therefore I am not pessimistic. I think we have a wonderful opportunity to cope with these problems and create a better world. Franklin Roosevelt, a very, very famous president of the United States, in a great crisis of his country back in 1933 made a statement in which he said: "Americans of this generation have a rendezvous with destiny."
I think I could rephrase this and could say that Europeans, Americans and the majority of mankind have a rendezvous with destiny and only together will we be able to come to a solution that secures peace and prosperity and allows people to live the way they want to and to pursue what the American Constitution guarantees each citizen the pursuit of happiness.
I thank you for having given me the opportunity to say a few words. The time I was told is limited and I want to thank you very much for your attention, for your presence, and I express on behalf of the German delegation our friendship and our best wishes for a happy successful and peaceful future for our friends in Canada.
The appreciation of the meeting was expressed by Dr. Albert Maringer, President and CEO, Siemens Group Canada, and Chairman, Canadian-German Chamber of Industry and Commerce.