In World Economy News 11/11/2016
German politicians expressed concern that a wave of populism that led to Donald Trump’s election and the U.K.’s vote to leave the European Union will result in a roll back of free trade that will harm the global economy.
“I’m still a fan of globalization,” Michael Fuchs, a deputy chairman of Chancellor Angela Merkel’s parliamentary bloc, said in a Bloomberg Television interview. “I hope that at the end of the day, particularly the Republicans, who have a long-standing history for free trade, for WTO, that they really come back to a normal way of discussion.”
While policymakers in Europe should “wait and see” what Trump actually does once in office, there are concerns in Germany that the U.S. election outcome could be a setback for free trade, Fuchs said. With exports rising to $335.3 billion, Germany was the third-biggest seller of goods among Group of 20 nations in the second quarter. That compares with U.S. exports of $358.8 billion and Chinese exports of $536.5 billion, according to Organization for Economic Co-Operation and Development figures.
Fuchs’ comments also reflect unease in Germany that Britain’s decision to leave the EU and the Trump victory may influence election outcomes on the European continent, where anti-globalization sentiment is riding high before votes in Italy, Austria, the Netherlands, France and Germany over the next year.
“Demagogic populism is not just a problem in America,” German Finance Minister Wolfgang Schaeuble said in an opinion piece published Thursday in newspaper Bild. “Also elsewhere in the West, the political debates are in a worrying state.”
Merkel’s party has suffered a series of regional election defeats on the back of her open-door refugee policy, criticized by the anti-immigration Alternative for Germany party, which is in third place nationally in polls. AfD co-leader Frauke Petry said Trump’s victory in the face of mainstream media opposition should set an example for Germans to “have the courage to make their mark at the ballot box themselves.”
Even after Trump’s criticism of Merkel’s refugee policy as “insane,” the German government is well-advised not to “overstate Donald Trump’s sharp words in the election campaign, also against Germany,” Defense Minister Ursula von der Leyen said in a Rheinische Post newspaper editorial.
Trump’s victory has renewed pressure on Europeans to better organize security policy and shoulder a larger share of the financial burden within the North Atlantic Treaty Organization, the minister said. Still, U.S. support will remain “indispensable” as European allies face difficulties improving their defense capacities in the short term, she said.
Source: Bloomberg
