In the keynote speech, former U.S. Secretary of the Treasury John W. Snow discussed the seriousness of the current U.S. political situation and that the division between the two parties has never been as prominent. Republicans and Democrats must compromise and find more common ground to improve the current deficit and, more importantly, foster growth. Growth will increase with structured reforms, which will in turn lower unemployment. Although it easy to get discouraged, leaders have to continue their efforts.
Panel 1: The Economic Policies of the New Governments and Their Effects on Europe and the World
The first panel discussed a wide array of economic topics, including banking supervision, the current account surplus, the lack of price competitiveness in reform countries, and the increasing importance of France’s uncertain future. Speakers discussed the growing right-wing movement in Europe and the impact that could have on member states as they prepare for talks on the future EU policies, especially as the EU gains more opponents. However, the main focus was on Germany’s lack of investments. The strength of its economy is overrated, and it needs further reforms to strengthen growth as well as promote investments. Germany’s tax regulations, uncertainty in the energy sector, and the possible introduction of a rent control make foreign investment extremely unattractive. Germany, as well as other EU member states, will have to start deregulating and increase competitiveness. Finally, the Transatlantic Trade and Investment Partnership (TTIP) will help the growth of the United States and the EU, and there was a general agreement on its implementation.
Panel 2: A New Political Generation and Its Political Priorities
The second panel focused on the composition, policy priorities, political engagement, and use of technology by the “Millennial Generation.” This generation consists of those born between the mid-1970s and the mid-1990s. It was agreed that Millennials are distinctly different from previous generations. Some of their characteristics are that they are more politically and socially liberal, active on online forums, less supportive of military intervention, more supportive of free trade, and dissatisfied with the current bureaucracy of the governments in Germany and the U.S. Their input does matter and should be recognized as they have a large impact on voting with strong records of turnout, as opposed to the popular view that they are alienated from politics.
However, there are groups within this generation that are still separated from mainstream politics. Women and migrants are underrepresented in current political forums. There are organizations like Running Start that try to encourage young female participation in politics in the U.S. and some political parties in Germany are better than others at encouraging minority participation. We need to make sure that diversity brings us to a richer political administration in all aspects. The earlier that we start encouraging and inspiring youth to get involved in politics, the more likely they are to invest in the long term. We also need young people to keep current politicians accountable and to use social media to engage in new and innovative ways.
Panel 3: Cyber Attacks Against Companies: Protection Roles by the Private Sector vs. the Government
A panel of six industry experts on cyber security spoke during the third panel. Each described a global environment in which state and non-state actors are becoming increasingly adept at exploiting vulnerabilities in government and private sector networks—attackers are moving ever ahead of defensive capabilities. But, the theft of intellectual property and personal information is not the only threat posed by organized cyber-attacks, as there have also been a number of instances where groups have been able to damage or even destroy physical infrastructure.
Missing in the debate over the National Security Agency’s programs and its effect on transatlantic relations is the global nature of cyber threats. Both American and European companies recognize the importance of cyber security in protecting their research and development efforts, which are critical to maintaining their competitive edge. Each country also has its own set of data privacy laws, but this makes it difficult to address what is actually a global challenge.
On the debate over privacy and security, the panelists acknowledged a critical difference between German and American approaches to the topic. On one hand, German businesses typically have a risk-based approach and are less concerned with compliance issues, preferring instead to “pop the hood” and understand the particular security threats that need to be addressed. On the other hand, American businesses tend to follow the letter of various regulations, but do not necessarily follow through on implementing security measures. While more cyber regulation is likely in the euro area—one panelist suggested that Germany may even have a competitive advantage in this respect—more regulation is unlikely in the United States.
Finally, the panelists listed a number of things companies can do to better protect themselves against cyber risks:
- Executives should develop their technical knowledge to better understand their company’s vulnerabilities;
- Firms should routinely test their vulnerability to threats;
- Inform, but do not scare employees when communicating cyber risks;
- Government can help companies identify and deal with threats, which often affect many different industries throughout the country.
Panel 4: Post-Election Realities: The Domestic and International Consequences
The September 22 German federal election resulted in large gains for the Christian Democratic Union (CDU), but its traditional coalition partner, the Free Democratic Party (FDP), failed to pass the 5 percent hurdle to enter the Bundestag. Without a natural partner, the CDU engaged in coalition negotiations with the Social Democratic Party (SPD) to form a grand coalition. On defense and security policy there is largely consensus between the CDU and SPD, but the SPD’s domestic policy requirements will prove expensive for taxpayers.
On the foreign policy front, the new grand coalition will differ from that of 2005 in that there is no longer a “Russia first” policy. Policymakers want to encourage more European integration, but not at the expense of NATO. Turkey, a NATO member, proves to be the big loser in the push for strategic change. It is essential for a European security architecture, but the CDU and its sister party, the CSU, differ from the SPD on how to “operationalize” it, with the CSU especially resistant to greater Turkish ties or EU accession.
German-American relations between the 2012 presidential election and 2013 Bundestag election have encountered their own challenges. Negotiations began on the Transatlantic Trade and Investment Partnership (TTIP), a trade agreement that will likely be as important for the twenty-first century as the NATO treaty was for the twentieth. However, the NSA surveillance scandal dampened enthusiasm for cooperation across the Atlantic. A matter of trust to the average citizen, the scandal could have longer repercussions than a straightforward policy disagreement. Ultimately, however, other crises will arise that will demand German-American cooperation, and the partnership will rise to the challenge.
Panel 5: The German Apprenticeship Model: Helping U.S. Workers Gain a Competitive Edge
The German system of apprenticeship has been in the spotlight since the recent global economic crisis exposed serious unemployment issues around the world. Youth unemployment in particular concerns policymakers in developed and developing countries alike. To many observers on both sides of the Atlantic, the German apprenticeship model of dual training seems to be just what is needed to fill the skill-set gap. Nevertheless, it has been clear from the beginning that the German model could not be mechanically adopted in the U.S. The panel discussed the role of government and the private sector in providing training and education to expand the mid-skilled labor force in the United States.
The panelists exchanged information on existing corporate training programs established by German companies in the United States. Large German manufacturing facilities in the country have already started their own training programs, often in collaboration with local community colleges and technological institutions. The U.S. Department of Labor also encourages small and mid-sized businesses to come together and form collaborative training programs at community levels. The German model of dual training—academic training and practical training—inspired the exchange of ideas on how the secondary education system in the U.S. can be reformed to create a clear path of career for students. There are, however, unsolved problems for expanding career and technical training in the U.S. The lack of a guaranteed job diminishes confidence in highly specified training programs in secondary education. The relatively liquid nature of the U.S. labor market also discourages incentives for companies to invest heavily in employee training. The consensus on the panel was that the apprenticeship model is a long-term strategy and requires cooperation at different levels.
Made possible by the support of Carl Siebel, Deutsche Bank, Robert Bosch Foundation Alumni Association (RBFAA), Roland Berger, Skadden, Arps, Slate, Meagher & Flom LLP, Transatlantic Program of the Government of the Federal Republic of Germany through funds of the European Recovery Program (ERP) of the Federal Ministry for Economic Affairs and Energy