The globalization of the markets is just as questionable as the desired rapprochement between West and East. Relationships and collaboration have turned into dependency and vulnerability overnight. Previous partners suddenly face each other as opponents.
But there is still much more at stake than a resurgence of the East-West conflict that was already considered to be over. The future line of conflict runs across the continents between the states that stand up for freedom, democracy and human rights and their opponents, the autocratic regimes.
Economy, society and politics are confronted with a completely new situation. But we also feel more connected than before to our European partners and to NATO, which against the background of the war has once again become a true community of values. Now is the time to use this momentum.
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We need determination and unity – not only with regard to values and human obligations, but also with regard to the major challenges facing politics and business:
- We need to find new answers to the increased geopolitical risks and the security issues that come with them.
- It is about realigning energy supply and policy, nationally and internationally.
- We must draw the right conclusions from the deficits identified in important industries such as pharmaceuticals and semiconductors.
Taken together, this means that Germany and Europe should finally dare to be more independent.
It is about a new social consensus
Now is the time to act – geopolitically, economically and entrepreneurially. From my point of view, there is a topic right at the top of the agenda that has been pushed into the background more and more in the decades-long feeling of deceptive security: the ability to defend our country and our values militarily.
The war in Ukraine has clearly shown that we have to do more here, not only, but especially in Germany. On the one hand, it is about a new social consensus: security has a price, also for the individual citizen. On the other hand, it is about the necessary equipment and equipment of the Bundeswehr.
The new geopolitical situation is forcing us to redefine its mission and focus more on the ability to actively defend the country. This requires high investments, for which the federal government now wants to provide the necessary funds.
But it will not work without private investment, in which the banks can play an important role. In this way, Germany could – finally – make its appropriate contribution to strengthening NATO. But the EU states must also standardize and better coordinate their security and defense policies. We can no longer rely solely on our American allies.
The war shows that not only our security but also our supply situation is far too fragile. Germany’s dependence on Russian gas, oil and coal supplies threatens our prosperity and economic development.
We have to free ourselves from this dependency as quickly as possible. We must succeed in opening up other sources of energy. I welcome the initiative by Federal Minister of Economics Robert Habeck to find new partners for our energy supply – even if we have to jump over our shadows in terms of our relationship with some countries in the Arab world or North Africa, for example.
We need to expand renewable energies faster
At the same time, it is imperative to expand our only significant own source, renewable energies, much faster than it seemed possible until recently. We urgently need faster planning and approval procedures for this. The accelerated expansion will not fail because of the financing. Banks are ready for green finance and private investment capital is plentiful.
Germany and Europe must also become more independent in other important branches of industry. It’s not enough for non-European companies to settle here, we have to build up our own capacities.
The pandemic has clearly shown us how important a high-performance pharmaceutical industry is in Germany. The fact that we have learned to live with the pandemic today is thanks to a combination of outstanding scientific research, government aid measures and bold entrepreneurial action.
Germany has proven here that it is capable of great things. We should consistently continue on this path and invest sustainably in research and development.
Research is no longer a national affair. In this area, the brightest minds work together across borders. To do this, the EU must improve the framework and develop and promote large-scale joint projects in a targeted manner.
Dangerous stumbling block for economic development
The pandemic has already shown it, the war against Ukraine is now making it clearer to us like under a magnifying glass: global supply chains are more vulnerable than we wanted to admit before. Today we know that interrupted supply chains and bottlenecks in semiconductor technology are a dangerous brake on economic development in Germany and the EU. The dependencies on supplies from non-EU countries are too high.
In some areas, such as cloud technologies, we do not have any European providers who can offer the necessary services. In the semiconductor and IT industry we need European players so that we can secure the critical infrastructures as well as the supply chains. It is therefore essential to strengthen these industries in Germany and the EU, otherwise we cannot end our dependency.
What follows from all this? We, Germany, as well as the EU as a whole, must finally learn to act in a self-determined and decisive manner. This will only succeed if we in Europe leave small states behind us. We must finally be ready to hand over further national competences to the EU.
Now is the time to act. Than germany. As Europe. As economy. And as a financial sector. We have to expand our own capacities in close cooperation with our partners. We must strengthen our strategic sovereignty and autonomy. It all costs money, a lot of money. The banks can and want to play an important role in financing. Perhaps we are now realizing that strong banks in Germany and Europe are an asset in themselves, more than many people previously thought.
Understood in this way, the current crisis also offers an opportunity for the future. However, we must not miss them.
The author: Manfred Knof is CEO of Commerzbank.
More: Europe in crisis mode: A continent is arming itself.