Closer Cooperation in Europe is needed more than ever
The global economic order has been upended by the new U.S. administration and uncertainty is likely to persist for many years. The key reason for this is that Europe is not yet able to defend itself without America. Until this changes, we will have to continue living with the sometimes erratic behaviour emanating from the White House. We have just witnessed the President of the European Commission concluding a "deal" with President Trump on tariffs. While the deal is far from ideal, it at least avoids an even worse outcome. For various reasons, the UK was able to secure a slightly better agreement, but this does not obscure the fact that all of us in Europe must do far more to increase our autonomy.
The recently concluded British-German Friendship Treaty has been welcomed by all, as it provides a roadmap for closer cooperation in Europe – not only between Germany and the UK, but also among the UK, France, Germany, and beyond. A major focus of the British-German Friendship Treaty, as well as the preceding EU-UK agreement, is closer defence cooperation within Europe. Over the coming years, significantly more investment will be needed in this area, which in turn will require a shift in spending priorities. As a result, the welfare state must be reformed and become leaner. Cutting entitlements alone is not enough; we need a new emphasis on self-reliance, which calls for a different kind of social contract between governments and their citizens. All major European countries face this challenge, and we must learn from one another to find the best solutions. Some smaller countries, such as Denmark, which have already enacted future-proof welfare/pension reforms, can serve as examples.
Furthermore, the business sector must be freed from excessive regulation so that our economies can finally overcome the stagnation of the past years. Without greater economic dynamism, the growth required to address the challenges ahead will not materialise. Let us hope that the recent rapprochement between the UK and the EU, or its member states, will lead to concrete steps that make doing business across the Channel easier.
In the coming months and years, the Chamber will continue to highlight areas where frictions can be reduced for the benefit of all. We therefore invite everyone to come forward and inform us of specific issues where improvements to the trading framework are needed. We are the voice of bilateral trade and are always happy to help.
Dr Ulrich Hoppe
Director General
German-British Chamber of Industry & Commerce
