Chancellor Angela Merkel has bravely used the Greek bankruptcy, the migration crisis and the Fukushima accident to push ahead with her priorities. The results of the elections and polls have shown that they are right, although the developments mentioned have been and are an expensive fun for taxpayers and interest savers. Today the Chancellor would be well advised to use the Brexit situation just as consistently for the benefit of Germany by prioritizing the elevation of Germany as a financial center to the most important country for capital market transactions in Europe.
It should be guided by the idea that the financial market offers well-paid jobs that are subject to social security contributions. Unlike in the commercial industry, competition from China is not particularly relevant. It is no coincidence that countries with a strong financial market culture (USA, Singapore, Great Britain, Switzerland) have particularly high levels of prosperity. Even more: The political commitment of the Federal Republic to global climate targets requires the strengthening of the financial sector because it is significantly lower in emissions than the manufacturing sector.
Access to equity financing in Germany too
The strengthening of the venture capital sub-segment should be of particular importance. Because it is not only embarrassing that German company founders often have to collect start-up capital from Anglo-Saxon addresses; For our country’s prosperity, it is imperative that young companies in Germany have access to equity financing. But private pensions, which are becoming indispensable every day, are also urgently dependent on strong capital markets, especially since a return of ordinary interest rates is unlikely in the foreseeable future. It is a widely visible sign of poverty for Germany that the Mainz biotechnology company Biontech is getting capital on the US stock exchange Nasdaq these days.
Ms. Merkel should not only use the British Brexit mistake for the good of Germany, but also the US President Donald Trump’s harlequinade before the window closes again. The stationing of foreign troops in Germany is no longer necessary more than thirty years after reaching state unity. NATO was successfully expanded to the east and, if in doubt, the US troops should also be stationed there. Now is the opportunity to take advantage of Trump’s confusion – which consists in believing that he will punish the Federal Republic by withdrawing troops – and to implement a full withdrawal before the US election.
Impulse of German security
Perhaps the Chancellor can also get her nuclear protection shield approved of the Eurobonds and the now agreed transfer union with France. Then, given the new transatlantic situation, it would have given German security its own clever impetus.
If she succeeds in the fields mentioned, Ms. Merkel, who is known to be on a farewell tour, may succeed her foster father Helmut Kohl as Chancellor who has accomplished Epochales.
Christoph Bruns is fund manager, board member and main shareholder of the fund company Loys AG. Here you can find further columns by Christoph Bruns