On November 2, Milton Clipper, President and CEO of Public Broadcasting Atlanta, visited Germany as an invited guest of the Foreign Visitors’ Program. Mr. Clipper spent six days visiting such cities as Frankfurt, Berlin, and Brussels. He had the opportunity to learn first hand the history and workings of the Deutsche Bundesbank, which is the central bank of the Federal Republic of Germany and an integral part of the European System of Central Banks (ESCB). He sldo visited the Federal Ministries, the Rolls Royce Deutschland Ltd & CO KG, and experience several cultural and informational tours of Germany. In addition, Mr. Clipper took one day visit to nearby Belgium to visit Brussels. While there, he learned more about the history and development of the European Union and its affiliate offices.
Mr. Clipper would like to share with you a little basic information about Germany. First, its location — the Federal Republic of Germany is situated in the heart of Europe and has nine neighbors: Denmark in the north, the Netherlands, Belgium, Luxembourg and France in the west, Switzerland and Austria in the south, and the Czech Republic and Poland in the east. This central location has been more pronounced since October 1990 when Germany was reunited. The Federal Republic is more than ever a link between East and West, but also between Scandinavia and the Mediterranean. As an integral part of the European Union (EU) and NATO, Germany is a bridge to the countries of Central and Eastern Europe.
Germany covers an area of about 367 square kilometers and has a population of more than 82 million. It has the second largest population in Europe, with the Russian Federation having the largest. In size, however, Germany is smaller than France. The German nation essentially grew out of a number of German tribes such as the Franks, the Saxons, the Swabians and the Bavarians. These old tribes have of course long since lost their original character, but their traditions and dialects live on in their respective regions. Germany consists of 16 states known as “Lander.” Until Germany was reunited in 1990, the Federal Republic consisted of eleven states, which had been created in the former Western occupation zones. During my visit I hope to give you a glimpse of Germany that will be just enough to pique your interest for further reading.
Day One- Frankfurt
Day one began on Sunday with an early morning arrival into Frankfurt. I arrived on a very damp and rainy day and was greeted by the group’s interpreter, Edina Sabanovic. There are seven of us who arrived at various times throughout the weekend from our respect parts of the world participating in this exciting visitors’ program. We had a get acquainted dinner and did a quick walking tour of Frankfurt before retiring for the evening to begin our first official day together on Monday. I will use this opportunity to give you a small overview Frankfurt.
Frankfurt is in the German state of Hessen. With a population of six million and an area of about 21,100 square kilometers, Hessen is Germany’s fifth largest state. This region of Germany had a turbulent history. In 1848-9, the National Assembly, the first democratic German parliament, convened in St. Paul’s Church (which is now a national monument) in Frankfurt/Main. This democratic beginning failed, however, as a result of the power wielded by Germany’s ruling princes. Prior to Bismarck’s wars of unification, the territory, which is now Hessen Ð like many other regions at that time Ð resembled a patchwork, encompassing four principalities and duchies, an earldom and the free city of Frankfurt. After the Austro-Prussian War of 1866, Prussia absorbed all of this territory except the Grand Duchy of Hessen-Darmstadt. With the ‘Proclamation No. 2’ of 19 September 1945, issued in the IG Farben complex in Frankfurt/Main, the American military government merged Hessen-Darmstadt and most of what had formerly been Prussian territory to form the state of Hessen.
Today it is one of the country’s major centers of business and industry and ranks among the most dynamic regions in Europe. Crucial to the region’s economic success is the state’s central location with its many air, rail and waterway traffic junctions. The Rhine-Main Airport is one of the most important traffic hubs in Europe. With about 62,500 employees, it has now become the largest local employer in Germany - and is still growing. Better known than the state capital Wiesbaden is the international financial center Frankfurt/Main. Frankfurt is the seat of the Deutsche Bundesbank and, since January 1, 1999 seat of the European Central Bank as well. Over 400 commercial banks are situated here, as is Germany’s largest stock exchange.
Germany is a vibrant international city with approximately 644,000 inhabitants, with four branches of industry — chemical, vehicle, mechanical engineering and electrical industries are all instrumental in propelling this region to a position of economic strength.
Frankfurt’s cultural arts are quite diverse. It has a number of wonderful museums and art galleries, such as the Stadel Art Institute and the Municipal Gallery with a magnificent collection that includes works by Rembrandt and Picasso, as well as many other contemporary artists. It has a superb cross section of European art history. You can also find Pop Art and artworks from the last fifty years at its Museum of Modern Art.
Our first day of meetings started at the European Central Bank. Regina Karoline Schueller, the head of the Division for Press and Information, greeted us.
The European Central Bank (ECB) is the guardian of the price stability of the euro. The ECB was established in 1998. The Treaty establishing the European Community is the Foundation and Legal basis for the ECB and the European System of Central Banks (ESCB). The decision-making body of the ECB is the Governing Council. The council consists of six members of the Executive Board and the twelve governors of the national central banks of the euro area.
January 1, 1999 marked the start of Europe’s new unit of currency, the euro (1 euro = 100 cents). There are seven banknotes: 5, 10, 20, 50, 100, 200, 500, and eight coins: 1 cent, 2 cent, 5 cent, 10 cent, 20 cent, 50 cent, 1 euro, and 2 euro. Each member country is represented on the coins. The first countries to replace their national currencies were: Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. Greece joined later. Although they are members of the European Union, Demark, Sweden, and the United Kingdom have not adopted the euro. Today European businesses and approximately 300 million European citizens use the new euro.
Thirteen countries have applied to join the Economic Union, but must first meet specific convergence criteria to be accepted as in financial stability, public finance discipline, interest rate convergence, and exchange rate stability. The projected effects will be a real single market, the removal of transactional cost, price transparency and the elimination of exchange rates.
After lunch we quickly headed to the Deutsche Bank to meet with Dr. Werner Becker, Deputy Head of Department for Economic, Banking and European Issues, Deutsche Bank Research.
In Frankfurt’s financial market, Deutsche Bank is recognized as one of the ‘Big Four.’ The Deutsche Bank Group is made up of a substantial number of domestic and foreign companies, including banks, securities companies and financial services providers. A major entity of Deutsche Bank is Deutsche Bank Research. This department provides global equities and global market research that focuses on short-term prognosis and analysis. It also predicts long-term trends.
Mr. Becker gave us an in depth analysis of the Europe’s economic environment and the issues facing the new Economic Union. Success for European integration in today’s global financial market means over coming several obstacles such as the implications of enlargement of the EU to include countries in Central and Eastern Europe, a slowing European economy, the development of a single marketplace with one voice, and the creation of a new economic model capable of handling future and diverse political structures. These issues don’t stop at the European borders. It is critical that as citizens of the U.S. we must understand our role and impact on our global economic neighbors. For more information about the Economic Union visit online at www.DBresearch.com
Day three started with a 4:30 am wake up call. After meeting in the lobby and a lot of yawns, we were off to the airport for an early forty-minute flight to Brussels. Arriving at Brussels we were faced with a public transportation strike. Taxis were at a premium and far and few between. We did, however, make it to our first meeting. Brussels was founded 580 by Saint Gery, the Bishop of Cambri. The major transformation of Brussels began in the XVIII century and went on so that the suburbs increased and new districts were created at the end of the XIX century. Today, Brussels plays a pivotal role in the development and governance of the new European Union (EU). Brussels is the home of the European Council. Thus, is the reason for our venture to Belgium.
Today we met with Mr. Peter Ptassek, Policy Advisor, EU Commission; Mrs. Christine de Peyron, Deputy Press Speaker EU Convention; Mr. Christoph Heusgen, Secretariat General of the European Council; and Mr. Heinz-Peter Tempel, Deputy Director of the Office of Mr. Gunther Verheugen, Commissioner. Each of our hosts explained their unique roles and gave with the European Union Convention and gave an analysis of their respective areas. As an outsider from The U.S. delving into the very sensitive and complicated infrastructure of the EU, I can only try to report an overview of these multifaceted issues.
Peter Ptassek met with us first. Before coming to Brussels, he worked in Berlin on the issue of enlargement or the expansion of the European Union membership. Peter was a part of the recent EU Convention to help develop a constitution and the legislative guidelines. The issue of enlargement continues to be a critical process. Can the European Union expand from 15 to 25 member countries and maintain its focus and effectiveness? Ptassek feels that a successful process between the candidate countries and the members is about to be reached.
The Convention also focused on a new voting structure to give the member countries parity. They will move from the one country, one vote concept to a system that gives the smaller countries a larger number of individual votes over the larger countries.
Mrs. Christine de Peyron quickly gave us an over view of the Treaty establishing a Constitution for Europe. She took us through the constitutional structure and the definitions and objectives of the Union. Fundamental rights were a critical discussion point for a successful Union. She also explained the composition of the constitution system and its representation. There are 28 participating countries. Each will have 6 representatives and 3 alternates. Six working groups have been established to listen to views and debates on the issues and to evaluate plans and proposals.
Mr. Heusgen explained the history of the EU integration process and how it was modeled after the European integration of the coal and steel industry. It was critical that the European countries looked toward change to maintain their global political and economic strengths. One major issue was the fact that during the nineties, the European countries were still dependent on NATO and had to learn how to stand on their own. The establishment of a security and defense union was recommended, but how to create a rapid action security force and not be in conflict with NATO was the critical factor. This issue is now in the planning stages.
Mr. Tempel explained the negotiation process to financial and agricultural policies. Establishing policy means identifying what is acceptable, and what is negotiable. In the area of agriculture, interviews are now taking place to establish levels of payments to farmers and production quotas. The creation of new financial policies must be initiated as the European Union grows in membership. These were just a few of the day’s issues we had an opportunity to learn about and discuss in detail. It was an outstanding series of meetings and we appreciated our hosts for taking time out of their busy schedules to meet with us.
After the meetings we had the opportunity to see a little of Brussels before jumping back on a plane to head for a late night arrival in Berlin. We also said goodbye to our great guide, Edina Sabanovic, who returned to Frankfurt.
After being in Germany for three days, today marks our first full day in Berlin. Berlin is the Capital of the Federal Republic of Germany with a turbulent past. Within just a few centuries, Berlin grew from a fishing village and trading center at a crossing point on the Spree River into the Prussian capital city and royal residence. The town of Cölln was first mentioned in a document dating from 1237. It later merged with its sister city Berlin, profited from Prussia’s rise to the rank of a great power, and after the founding of the German Empire in 1871 became the political, industrial, scientific, academic and cultural center of Germany. In the year 1939 the German capital had a population of more than four million. The Second World War unleashed by the National Socialists had catastrophic consequences for Berlin, resulting in the nearly total destruction of the city center and its industrial districts. After the War, the city was divided into four sectors by the victorious powers. In 1948-9, the Soviet Union imposed an eleven-month blockade of the land routes to Berlin in an attempt to bring the people of Berlin (West) to their knees and force the Western Allies to withdraw from the city. This attempt was thwarted by an airlift launched by the Western Allies. To stem the mass exodus of people from the German Democratic Republic (GDR) and the eastern part of Berlin, the GDR communist leadership began construction of the Berlin Wall in 1961. It fell in 1989 when the communist bloc collapsed. On October 3, 1990, the unification of Germany was consummated in Berlin with a state ceremony. Since then, united Berlin has once again been the capital of unified Germany.
Berlin’s cultural diversity is a long-standing tradition in Berlin. Its museums and collections on the Museum Island - which in March 2000 was included in the UNESCO list of cultural and natural heritages - in the Culture Forum and in the district of Dahlem are renowned the world over. More than six million people visit annually. Additionally, the Philharmonic Hall, three opera houses, theaters, concert halls and libraries, as well as the Berlin Festival, the International Film Festival and the special Berlin Theater Encounter are wonderful highlights in this cultural metropolis.
Our first meeting took place at the Federal Foreign Office. Albrecht von Wittke, Desk Officer EU Enlargement met with us and we were later joined by Mr. Alexander Schonfelder, Desk Officer for Common Foreign and Security Policy. Both gentlemen discussed Germany’s foreign policy position on the European Union enlargement, EU voting, and legislative structures. Germany plays a major role in the development of the EU. Germany, like the other EU members, sees the successful growth of the EU as enhancing the U.S / European partnership. The enlargement selection process and designing effective security policies remain the focus of this department.
On this very cold day we moved quickly to our next meeting at the BDI, the Federation of German Industries. Dr. Alexander Bohmer, Director of Section Department, International Affairs- Economic Policy. And Dr. Guido Glania very proudly showed off the new high tech designed building. BDI is the umbrella for German Industries. It has a mission to integrate all levels and sectors of the business community. They work directly with the Chamber of Commerce and the Employee Federation, all under one roof. BDI is a federation of 35 major industries. There are 8 million employees in German industries. Medium size companies are the backbone of the German industrial arena. Many of the BDI policies focus on medium size businesses. The BDI’s central objectives are to re-think and re-orient Germany’s economic policies and make sure that it gears itself to the laws of stability and growth. These objectives are price stability, a high level of employment, a balanced external economy and a correspondingly steady rate of growth. A fifth element will be added-stable public finance. To learn more visit www.bdi-online.de.
Today, Dr. Ulrich Strempel, Deputy Director, France/EU, Press and Information Office of the Federal Government of Germany hosted lunch. We enjoyed a wonderful French meal at the Ganymed Brasserie.
After lunch our last meeting was with Rolf Brenner, Director of the Ministry of Economics and Technology. We discussed the issues of rebuilding East Germany. The economic life of East Germany was completely rebuilt after unification. A major challenge is to bring parity to the east and west. The framework for the reconstruction plan will be based on innovation, investments and improvements. Even though growth is slow, the construction industry is one of the most important areas for East Germany’s success. The need for urban renewal also remains a critical issue. One of the bright growth areas is agriculture, but it still has not reached the economic levels of West Germany. Germany is doing everything possible to insure the future economic growth of East Germany.
Today started with a 9a.m. meeting at the Federal Ministry of Finance. We were met by Dr. Wolgang Merz, Head of the Department of Europe Ministry of Finance. Before our meeting, Dr. Merz described the historic building now housing the Ministry of Finance. Over the years the building was used for multiple purposes. In 1935 the structure was built in only 18 months to house the German Ministry of Aviation under the leadership of Hermann Gohring. It is 112,000 square meters, with 3,000 rooms. In 1945 the Soviets took control of the building after World War ll. In 1949 the German Government Assembly found the German Democratic Republic and used the building for its purposes. Located on the east side of the Berlin wall, built in August 1961, it was under very high security. In 1991,after the 1990 unification of Germany, it became the German agency for Re-privatization. In 1972 it became the Ministry of Finance. After the tour of the building, we met with Elke Kallenbach, Economic Adviser for European Economic and Fiscal Policy, to discuss her analytical views of the EU economic policies and its structure.
Our second meeting gave us an opportunity to visit one of Germany’s well know think tanks — the Germany Institute for Politics and the German Institute for International and Security Affairs is an independent research center that advises the German parliament and the German federal Government on all matters relevant to the German foreign and security policy. Since its establishment in 1962 in Ebenhausen, near Munich, the Institute has gained a reputation both in Germany and abroad through it’s publications, analysis, and international conferences. We met with Dr. Heinz Kramer, Director, Research Group on EU Enlargement to discuss international and European politics. As a 40 year old research think tank, it does not make recommendations, it only analyzes and advises. We also met with Kai-Olaf Lang, Senior Research Associate, to learn more about the political implication on the European Union.
After lunch we took a long bus ride across the city to our second think tank, DIW, the German Institute for Economic Research. The group met with Dr. Joachim Volz from the Department of Macro Analysis and Economic Forecasting. He gave us a great insight on their research of economic impacts on Germany over the past 10 years.
The primary task of the DIW is to investigate economic processes in Germany and abroad and to support decision-making in politics, the public sector and the economy. Since its inception, the Institute has focused on business cycle analysis and forecasting. Particular emphasis is given to empirical research on theoretical explanatory approaches. The variety of research ranges from the short-term analysis of economic trends and the analysis of current economic and fiscal affairs, to the long-term projection and assessment of developments in the global economy and in individual sectors alike. An objective of DIW Berlin research work is to further the development of the German economy.
Today is our last day of official visits. It began with an hour-long bus ride to the Rolls Royce Germany. You may be surprised to know that Rolls Royce makes more than luxury automobiles. It is far more than that. RRG is actually a leader in aviation engines worldwide. Although a 100% subsidiary of Rolls Royce plc. Rolls Royce Germany does not simply represent the parent company with a small staff, like other regional subsidiaries would normally do. Rather, it owns two manufacturing sites and has developed a new family of jet engines in the thrust range from 14,000lbs to 23,000lbs. It is aimed towards a niche market for long-range business jets and 100 seat airlines. The product range also includes components and parts for other types of jet engines, as well as small engines both for commercial and military markets. Rolls Royce Germany has two production facilities in Germany: Dahlewitz, south of Berlin, where company headquarters is located and Oberusel, north of Frankfurt/Main. Mr. Rolf Neumann gave us a full over view of the company; it’s structure and competitive position in the aviation marketplace. We had a chance to tour the secure jet engine and testing plant. No internal photos of these areas were allowed.
Our final visit was to a rural working farm. After another long bus ride, we were treated to a country meal on the farm. The farm is a co-op owned by seven people. There are cows for breeding and milking. Each cow produces approximately 7,500 liters of milk a year. To be profitable, they need to produce around 10,000 liters. To attain economic profitability, they must improve their use of technology and increase their business knowledge. To supplement their incomes, the co-op farm invites children for a low admission fee to stay on the farm for a day or week. The farmers are also concerned that the new European Union process will cut into their farm subsidies. To avoid this, they are working towards being debt free and reducing their expenses by raising all the food needed to feed the animals.
This trip was a real learning opportunity. The issues surrounding the development of the European Union are vast and complicated. It’s on the minds of every European and it should be on the minds of Americans. As U.S. citizens, we should understand the impact we have on this process and the effects it can have on our economic future. My six intense days here only touched the surface, but I found every moment enlightening. The word foreign no longer has the same meaning. Each country, no matter its distance, is now a global neighbor and we should seek to understand each other’s culture better. I certainly do.
I would like to thank the Goethe Institute and the German Consulate in Atlanta for this tremendous opportunity. I would also like to say: iki, bye bye, sahha, na shledanou, auf-wiedersehen, totziens to my new friends who I will miss. Thank you all for your insights and kindness.