... Mr. Eduard Oswald, Member of the German Parliament ("Bundestag") and former Minister of Regional Development, Construction and Urban Planning
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Mr. Eduard Oswald is a Member of the German Parliament for the Christian Social Union, the Bavarian sister party of the Christian Democratic Union, headed by Chancellor Angela Merkel. Currently he is Chairman of the Finance Committee of the German Parliament. On the occasion of the committee’s New York visit, Mr. Oswald gave his assessment of current economic developments.
Question:
To which extent can the concept of a social market economy, which has a long tradition in Germany, provide orientation towards finding ways out of the current financial and economic crisis?
Eduard Oswald:
A social market economy does not appear from nowhere – even in Germany. It means always looking for moderation and the middle ground, and this requires strenuous negotiations. All this now takes place in a free, competition-oriented economic system that is global, which does not exactly make the negotiating easier. Moderation and middle ground must be revived as key themes of economic life as well – something for which we Germans have coined the term “respectable merchant.”
Q.:
In April 2009, the G-20 countries will meet in London to develop initial common solutions for a new international financial architecture. Which guiding principles do you think should be the focus of these negotiations?
A.:
After a willingness for common action was established in Washington last November, a concrete framework for common solutions has to be set in April in London. On a global scale, a more crises-resistant international financial architecture can only be achieved jointly, by adopting measures commonly agreed upon – or not at all, with all the negative consequences we are now experiencing. This is only possible – from the global perspective -- by going beyond the G7 or G8, thus G20 (plus) is the right setting. The current problems can be solved if thus far unregulated markets and the players in them are included in the regulatory framework.
Q.:
Do you see a danger – similar to what happened at the end of the 1920s – that protectionism might lead to an intensification of economic woes? How can this problem be confronted?
A.:
Protectionist inclinations increase in times of economic crisis. But we are all smarter than back then, and we know that protectionism intensifies the crisis. The possibility of having a worldwide discussion almost simultaneously in each country is a decisive advantage compared to the 1920s. Therefore, it is important that the U.S. stimulus package abstained from protectionist measures – just as Germany did not confine its stimulus package for the automobile industry only to domestic carmakers.
Thank you, Mr. Oswald
