New York, NY

A World in Flux

December 15, 2014

AGI held its third Annual Symposium on Monday, December 15, 2014 in New York City. This Symposium, held the same day as the AGI Global Leadership Award Dinner, explored Germany and America’s roles in shaping the emerging global order and discussed new avenues for transatlantic cooperation. The keynote speaker was Robert B. Zoellick, Former President of the World Bank Group and current Chairman of International Advisors at Goldman, Sachs & Co.

Panel I: The International Relevance of Germany’s Foreign Policy Experience

The first panel discussed German foreign and domestic security policy. In this context, it is important to distinguish between pre- and post-1990. German foreign policy since 1990 is defined by three “Never Agains” that justify modern multilateral interventions:

Never again act alone – Multilateralism;
Never again war – Pacifism;
Never again fascism – Leftist.

Although Germany, like many nations, prefers the status quo, the country and its leadership have worked to address conflict around the world.

Germany follows several goals in its foreign policy and in terms of how it wants to be viewed internationally: permanent peace; economic wealth and security; predictability in the liberal international system; respect; confrontation with its past; and perception as a reliable and calculable country. To achieve these goals, it works toward structural development and improving economic and political bilateral relationships, practices active multilateralism, balances its policies based on pragmatic interests and its value system, combines soft and hard power (a new instrument after 1989), elevates the role of non-state actors in the international arena, and acts as a team player with a relatively quiet and unobtrusive style. Germany has recognized that its role has changed and has evolved into a shaping power. It has the moral authority that no other state has anymore. Regardless of whether Germany wants that role, it is being pushed toward it on an international scale.

These changes can be explained by leadership and context, which have both evolved since 1990. Germany was reluctant at first, but is now leading in some areas, but not others. Especially in Russia, Germany is the driving force in setting a policy of strength. German chancellor Angela Merkel is the dominant leader. The decline of French leadership in the region has contributed to Germany’s rise. Europe looks different since the beginning of the EU with a different world order, and it needs a strong leader. Germany’s strategic and structural framework in setting foreign policy has been shaped by events since 1990. It practices a dual approach: it sticks to its principles but keeps communication channels open. German leadership continues to recognize that public opinion is important but should not shape every policy decision. In essence, due to Germany’s past experiences, some of its lessons learned might be good for other countries currently engulfed in conflict to heed.

The crisis in Ukraine and Russia demonstrates Germany’s double strategy: its commitment to NATO as well as repeated entreaties by Chancellor Merkel and Germany’s partners to engage with Russia. Although Russian president Vladimir Putin faces a dilemma, the establishment of a contact group to keep the involved parties talking may stumble against his enormous power. Punishing Russia should not be a goal of implemented policies; rather, sanctions should be put in place to help Ukraine. However, if governments are unable solve crises, civil society actors can move in to at least air the issues. Germany has been involved in many conflicts where alternative channels have moved things forward. A stronger and united EU will be ever more important in current foreign policy crises with Germany as the driver. It is also time to pool resources in Europe regarding its military spending.

Panel II: Democracy and Unemployment: Retooling a Jobless Generation in Europe and the United States

As changes in the global economy have exacerbated youth unemployment in Europe and the United States, this panel offered both German and U.S. examples for addressing this pressing challenge.

The panelists analyzed to what extent technical education in school did not keep up with technological developments that took place in the industrial sector. While the retiring generation was part of the technological progress, young adults need to learn the right skills to fill the gap. The generation that suffers from educational shortcomings faces high unemployment rates, which correlate with a distrust in democratic institutions. For them, it is hard to believe in institutions that do not serve their needs. Hence, the fight against youth unemployment must go beyond existing practices. The panel discussed the advantages of the German dual apprenticeship system, as well as the institutional and cultural particularities in the U.S. Unfortunately, the general recognition of dual apprenticeships in the U.S. is small, due to a lack of experience and cooperation between businesses and college education.

The U.S. needs to create an alignment by developing curricula together with businesses and community colleges. Politics can support this initiative by granting financial support to apprentices in the dual system. This will further give incentives to companies that have to carry the financial burden by themselves at this point. Another focus should be to raise awareness of alternative models of higher education that are quite successful in other countries such as Germany. With the right provisions and modifications, these dual learning experiences can help fight the skills gap successfully. The panel concluded that starting from early childhood education, the challenge is to create alternative, viable pathways for students. This is a challenge that public policy, business, and education can only face together.

Panel III: The Emerging Architecture of Finance and Trade: Managing Risk While Promoting Growth

With Germany and Europe standing at a crossroads with regard to avoiding a catastrophic downturn in economic growth on the one hand, and establishing a new trade structure through TTIP on the other, the day’s last panel discussion focused on current economic trends and policies.

Developments in the U.S. and Europe are trending in opposite directions. While the U.S. economy is making strides toward robust growth, the European outlook is much more mixed. Interest rates in the EU will stay low for much longer than they will in the U.S. But that is not the whole picture: for Europe, structural reform and labor market flexibility are more crucial than fiscal stimuli and interest rates, as evidenced by renewed growth in Greece, Portugal, Ireland, and other countries under stability programs. The tough prescription of austerity and structural reform seems to work.

Germany’s economic growth has been disappointing in 2014. This comes despite the fact that it followed the crisis of 2009 with a strong export-based recovery, which is now paying off through tax revenues, social security payouts, and budget consolidation. From the German perspective, the current crisis is not a crisis of growth but rather of sovereign debt, the banking sector, and lack of competiveness on the part of some peripheral EU countries. The major factor may actually be a “Putin Shock,” which has disproportionally affected German business. However, the weakening euro will benefit the German export economy—as will the decreasing oil prices and rising interest rates. Therefore, Germany should embrace quantitative easing as a method for depreciating the euro. A 2 percent increase in German growth next year alone could double the average for the whole EU.

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