The Industry's Vote

"Full Commitment to Integration"

Just last week, the four umbrella associations of the German economy published a call for broad participation in the European elections in their first "joint appeal." "Europe is a core concern for our companies." The Federation of German Industries (BDI), the Confederation of German Employers (BDA), the German Chambers of Industry and Commerce (DIHK) and the German Confederation of Skilled Crafts (ZDH) declared in their appeal.[1] "As the world's largest, most democratic realm of freedom, rule of law, economy and prosperity, with a high level of social responsibility, Europe is part of our identity." The appeal states further: "Our companies and their employees expect the policy-makers' full commitment to European integration." The associations declare, "We want a Europe for whose future everyone is committed!" Therefore, "we call on the citizens to vote in the European parliamentary elections."

Center and Periphery

The German economy's enthusiasm for European integration has causes that can be precisely quantified. This applies, for example, to the EU's common market, introduced in 1993. The Bertelsmann Group Foundation recently studied its impact on the economic development of the Union. According to its findings, thanks to the creation of a common market, which has facilitated the considerable increase in EU trade, Germany has an annual growth of €86 billion in income - more than every other country in the Union. The Bertelsmann study also shows that the countries in the southern and eastern periphery of the EU benefit much less than those countries in its center. The annual per capita income growth, for example in Spain (€589), Greece (€401), Poland (€382), or Bulgaria (€193) is much lower than in Germany (€1,024).[2] In addition, as the Bertelsmann study points out, the common market has led to "the national economic resources (labor and capital) of lesser productive companies being transferred to the most productive companies." In many cases, these too are in the German center of the Union.

North and South

Germany is not only the main beneficiary of the common market, but also the main beneficiary of the introduction of the euro. This has been confirmed by a study published in February by the Centre for European Policy (cep) located in Freiburg. The study points out that in 2017, Germany's Gross Domestic Product (GDP) would have been €280 billion less, were it not for the EU single currency. Altogether, from the introduction of the euro, until 2017, Germany has gained almost €1.9 trillion - or approximately €23,116 per capita.[3] However, cep had also discovered that, of the eight euro countries studied, only the Netherlands also shows a positive result - a plus of €346 billion up to and including 2017, or €21,003 per capita. France and Italy, on the other hand, were dramatic losers. The French GDP would be €374 billion more, Italy's, even €530 billion more, if the common currency had not been introduced, reports cep. From 1999 - 2017 France lost a total of approx. €3.6 trillion (€55,996 per capita). During the same period, Italy lost more than €4.3 trillion (€73, 605 per capita).

East and West

Germany has not only enormously benefited from the integration, but from the expansion of the Union as well. Many of the east and southeast European countries have become low-cost production sites for German companies, which has fueled the German industry's enormous export success, if not made it even possible. German trade with the entire region is booming. The commodity exchange between Germany and the Visegrád group (Poland, Czech Republic, Slovakia, Hungary) in 2017 was at around €256 billion - significantly more than trade with China (approx. €170 billion). A significant portion of Germany's Visegrád trade is comprised of delivery exchanges between German plants in Germany with their subsidiaries in Visegrád countries. Thanks to its geographical location in the heart of the continent, and its historically developed relations, Germany has profited more than all other EU countries from the eastward expansion. Great Britain on the EU's western outskirts offers an example of the contrary. As experts from the German Economic Institute (IW, Cologne) reported in October, Great Britain "benefited little" from the EU's eastward expansion. Therefore, it plays "a significantly smaller role" than Germany in the Union's production chains.[4]

Main Sales Market

Supplementary to Germany's special profits from the EU's common market, the euro and its eastward expansion, the EU remains the German economy's most important sales market. In 2017, Germany exported around €750 billion to other member countries of the Union - 58.6 percent of its total exports, accumulating thereby an export surplus of nearly €160 billion.[5] These enormous advantages explain the overwhelming majority of German entrepreneurs' satisfaction with the Union – in spite of the growing dissatisfaction spreading through sectors of Germany's medium-sized economy. (german-foreign-policy.com reported.[6])

"Realm of Prosperity" EU

Though the EU continues to prove to be a success story for Germany's economy, this, however, does not apply to the poorer sectors of the population. In 2017, according to Eurostat, the EU's statistics authority, 22.5 percent of the Union's population were threatened with poverty and social marginalization [7] - a mere 1.2 percent fewer than nearly ten years earlier (2008: 23.7 percent). In 2017, the proportion of those in the EU, who were still classified as poverty-threatened, after having received their social welfare payments, was at 16.9 percent - higher than in 2008 (16.6 percent). Only seven EU countries had successfully lowered their 2008 proportions, while in 19 EU countries these had risen further. According to Eurostat, in 2017, 6.9 percent of the population in the EU suffers from "considerable material deprivation." The figures refer to the nationally determined risk-of-poverty thresholds, whose low-levels are themselves but further indications of the gap in prosperity that exists within the Union. Whereas in Germany, in 2017, poverty-threatened signified having less then €13,152 annually, in Greece - with similar living expenses in various aspects - only those with less than €4,560 annually were considered poverty-threatened. In Lithuania the 2017 threshold, was at €3,681, and in Bulgaria, €2,150. As mentioned above, the German economy's umbrella organizations refer to the EU as a "realm of prosperity ... with a high level of social responsibility."[8]

[1] Gemeinsamer Appell der deutschen Wirtschaft: Wirtschaft für Europa. bdi.eu 09.05.2019.

[2] Giordano Mion, Dominic Ponattu: Ökonomische Effekte des EU-Binnenmarktes in Europas Ländern und Regionen. Herausgegeben von der Bertelsmann Stiftung. Gütersloh 2019.

[3] Alessandro Gasparotti, Matthias Kullas: 20 Jahre Euro: Verlierer und Gewinner. Eine empirische Untersuchung. cepStudie. Freiburg, Februar 2019.

[4] Michael Hüther, Matthias Diermeier, Markos Jung, Andrew Bassilakis: If Nothing is Achieved: Who Pays for the Brexit? Intereconomics 5/2018, 274-280.

[5] EU weiterhin mit Abstand wichtigster Handelspartner Deutschlands. handelsblatt.com 07.05.2018.

[6] See also Europas Achsen.

[7] Abwärtstrend beim Anteil der von Armut oder sozialer Ausgrenzung bedrohten Personen in der EU. Eurostat Pressemitteilung 159/2018. Brüssel, 16.10.2018.

[8] Gemeinsamer Appell der deutschen Wirtschaft: Wirtschaft für Europa. bdi.eu 09.05.2019.