Electrical business affiliation ZVEI: “Europe is being forced to act” | EUROtoday

DGermany's electrical business is asking on the European Union (EU) to impose sanctions towards China. The background is the announcement by the USA that it’s going to elevate tariffs on quite a few merchandise from the People's Republic, or in some instances drastically improve them. “Europe cannot remain the last Gallic village that holds up the ordoliberal flag,” says Gunther Kegel, President of the Association of the Electrical and Digital Industry (ZVEI), which just lately held its e-Summit business convention in Berlin.

Tariffs are literally poison for an export-oriented economic system like Germany's – as a result of a response within the type of counter-tariffs might be anticipated. “But Europe will be forced to act,” Kegel is satisfied.

The background is the concern that the European market will probably be flooded with merchandise from China. “There is a lot of excess capacity there,” explains Kegel. So China is relying extra on exports. And when giant markets just like the USA isolate themselves, Europe mechanically comes into focus. “It must not happen that state-subsidized products are diverted to Europe on a large scale.” The EU should defend itself towards this. “Otherwise our own industries will be destroyed by dumping prices.”

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“Own goal” for Europe?

This is feared, for instance, with electrical vehicles and metal. In addition, semiconductors and batteries may be affected sooner or later, warns the ZVEI. And these are key applied sciences for which new manufacturing services are presently being arrange in Europe and particularly in Germany.

In the case of semiconductors, for instance, the European share is anticipated to extend to no less than 20 p.c by 2030, which corresponds to a doubling. “The US sanctions against China show even more how important it is that Europe can act from a strong position when it comes to key technologies. That’s why it’s good that significant funding programs have been launched in the areas of semiconductors and batteries that are intended to strengthen the economic resilience of Europe and Germany,” says ZVEI Managing Director Wolfgang Weber. These would now must be made everlasting.

The billions of {dollars} for the institution of firms equivalent to TSMC from Taiwan or Intel from the USA will not be with out controversy. “What I had to put up with politically for two years,” says Reiner Haseloff, the Prime Minister of Saxony-Anhalt, for instance.

The CDU politician criticizes how much self-justification was necessary for his state government to make intensive efforts to locate an Intel factory in Magdeburg. Around 30 billion euros are being invested there, almost ten billion of which are government subsidies. Haseloff cannot understand objections. “We are here for Germany and for Europe,” says the daddy of the nation.

After all, your entire nationwide economic system on this nation relies on chips. “This is vitally important so that we don’t become dependent, as was the case with gas for a long time. We must be able to secure the strategic elements of our economy.”

Intel itself justifies the transfer by saying that Europe is a development market – and is self-confident on the subject of the subsidy problem. Christoph Schell, the American chip producer's board member answerable for advertising and marketing and gross sales, factors to China's rising success with electrical vehicles, which normally have a number of chips put in. “How great is the German economy’s dependence on the automobile industry?” asks Schell, himself citing a share of just about 40 p.c. “And what happens if this industry loses ten percent market share? Then the country has a problem.”

The state now not permits a market economic system

In comparability, the 9.9 billion which can be being invested are in no way the largest downside. Because with out the brand new high-performance chips, which, in his view, promise quantum leaps within the vehicles of the longer term, the economic system would now not be aggressive. “Not in the automotive sector, but not in automation and not in the healthcare system.” The phrase subsidy is overseas to him anyway. “For me it is an investment, in this case even an aggressive investment.”

And these have just lately turn out to be comparatively uncommon in Germany – as a result of, from the ZVEI's viewpoint, the final circumstances in Germany will not be proper. Association President Kegel and mentions, amongst different issues, points equivalent to excessive power costs, excessive taxes, however above all of the continuously rising paperwork and regulation.

The state now not permits any market or market economic system, complains Kegel. Everything is regulated right down to the final element. “Companies have to hire hordes of people to meet reporting requirements. In our company there were seven recently.”

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Kegel due to this fact praises the entrepreneurs on the e-Summit. “I admire you for your patience in not sitting on tractors and driving to Brussels and paralyzing everything there.” Because after all a number of paperwork comes from the EU. Nevertheless, the federal authorities doesn’t launch the entrepreneur from its obligation. Finally, the member states may get entangled and stop regulation. “For me it is an oath of revelation when the Chancellor stands up and says that 80 percent of the bureaucracy comes from Brussels and therefore nothing can be done. You can’t work like that.”

The zigzag course of politics can also be toxic for the placement. “This means there is no planning security,” explains Kegel. This applies, for instance, to subsidies which can be launched and rapidly abolished. For {the electrical} business, it additionally impacts the problem of community growth. “This is supposed to happen with underground cables,” describes Kegel.

So the suppliers invested so as to have the ability to supply the corresponding merchandise. “Now politics is changing again and would rather have overhead lines because they have found that they are cheaper. With this fickleness, who should invest in the future?”

In any case, community growth can be in danger. “Nobody wants the masts in their garden.” This implies that prolonged disputes and proceedings are inevitable. “We finally need an efficiency shift in political thinking.”