NZ businesses want Merkel to talk Euro Crisis, not just innovation

German Chancellor Angela Merkel to visit NZ ahead G20 Summit

Trip comes as German economy faces risk of entering recession

EU growth likely to come in 0.4 percentage points weaker at 0.8% for 2014

Wellington (13 November 2014): Angela Merkel’s talk at the University of Auckland on Germany’s innovation policy will be interesting; but what the New Zealand business community want to know is how she plans to address Europe’s economic crisis, says the head of The New Zealand Initiative.

In the first visit of a German head of government to New Zealand since 1997, Merkel will meet with Prime Minister John Key ahead of the G20 Summit in Brisbane this weekend, deliver a speech at the University of Auckland, and attend a reception for German and New Zealand business leaders.

Chancellor Merkel’s visit comes as the EU recently slashed its 2014 growth forecasts by 0.4 percentage points to 0.8%, due to lower than expected growth from its biggest member states; Germany, France and Italy.

Fears that Europe’s economic crisis may flare up again have been stoked ahead of German GDP data for the third quarter following a contraction in the world’s fourth biggest economy in the previous period. Should the German economy contract again, the country will technically be in recession.

“Germany is the economic lynchpin that holds the European Union together, and is probably the only thing standing between the global economy and another major financial crisis”, says Dr Oliver Hartwich, Executive Director of public policy think tank The New Zealand Initiative.

“Although Germany’s innovation policy settings are of interest to New Zealand, it’s not the most pressing concern among business leaders. They want to know what Germany is doing to revive its own economy, and what steps it is taking to reinforce the increasingly vulnerable Eurozone.”

Hartwich says Germany is staring at major challenges such as population ageing, crumbling infrastructure, economic stagnation and deteriorating public finances, and the policies to address these will have major ramifications beyond the country’s borders.

Germany is likely to be in the spotlight at the G20 talks this weekend, where leaders from the 20 biggest economies in the world are expected to unveil plans to lift global economic growth to 1.8%.

Dr Hartwich is a German economist and Eurozone expert. He writes a weekly column on the European Union for the Australian Business Spectator and regularly comments on European economic issues for numerous Australasian media titles.

The New Zealand Initiative is an evidence-based think tank and research institute, which is supported by a membership organisation that counts some of the country’s leading visionaries, business leaders and political thinkers among its ranks.

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