Merkel visits OECD

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World economy Merkel visits OECD

German Chancellor Angela Merkel is the first German head of government to have visited the Organisation for Economic Co-operation and Development (OECD) in Paris. In her speech she praised the organization as an important advisor to the member states. She also pointed to the challenges of the German economy.

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German Chancellor Angela Merkel speaks beside OECD Secretary-General Angel Gurría

German Chancellor Angela Merkel is the first German head of government to address the OECD

Photo: Bundesregierung/Steins

The organization’s criticism of certain developments is sometimes perceived as harsh in Germany, Merkel said. But it can also serve as a wake-up call. The Chancellor gave the example of the first PISA survey "which was not very flattering for Germany". It is nevertheless an important and useful performance assessment tool.

The "Programme for International Student Assessment" (PISA) regularly conducts studies on student performance in all member countries. In the beginning, Germany had not done well in some aspects of the OECD surveys.

In her speech Merkel addressed the current problems of the global economy, Europe and Germany. The OECD is an important advisor when it comes to implementing the structural reforms needed for Europe to remain competitive in the age of globalisation. Germany has a special responsibility as Europe’s largest economy.

Germany facing major challenges

It is true that Germany is currently doing well economically, as is reflected in economic growth and labour market statistics. Germany is nevertheless facing major challenges. Merkel mentioned, among other things, that the country is "living on its capital when it comes to transport infrastructure".

"However, Germany’s biggest challenge has to do with energy policy," Merkel said. She pointed out that it is very difficult to reduce subsidies for alternative energies, as many people and businesses benefit from them. The country also has a "problem with the Commission" concerning energy intensive businesses and exemptions from the renewable energy levy imposed by the German Renewable Energy Sources Act (EEG cost apportionment).

The cost apportionment pursuant to the EEG divides the costs of promoting electricity generated from renewable energy sources between the final consumers.

Industry 4.0 - the challenge for Europe

In her speech the Chancellor also addressed industrial development in Europe. "In Germany, we call it Industry 4.0". It has to do with the transformation of industrial production, the fusion of digitization and the Internet with traditional industry. Europe must maintain its core skills. However, although Germany possesses great skills in many industrial sectors, it is not specialized in chip manufacture or software development. This constitutes Europe’s real challenge, if we do not want to remain dependent on Asia and America, Merkel said.