Speech by Consul General Alford on "The US and Germany: Common Challenges 2009 and Beyond"
Hosted by the American-German Business Club Frankfurt
September 29, 2009

Members of the American-German Business Club,
Illustrious guests,
David
Sehr geehrte Damen und Herren

Thank you very much for the invitation and for the opportunity to introduce myself to all of you as the successor of Jo Ellen Powell as U.S. Consul General in Frankfurt. 

As some of you know, I am not a newcomer to Germany. I served in the military in Augsburg 1975-1976 where I worked as a German translator. I have also other personal connections to Germany including a German wife and a son studying in Germany. 

I am, however, a newcomer to Frankfurt, at least from a professional perspective. I am excited about this because I know the important role Frankfurt plays within the framework of the German-American partnership. Dubbed “Mainhattan” not only for its skyscrapers, but also for its renown as one of the largest banking and financial regions in the world, this German “Mainhattan” has had close political, economic and cultural links with the United States for many years. 

Since 2003, Frankfurt has celebrated German-American Friendship Day, as a public commitment to good transatlantic relations. This celebration was initiated as a show of solidarity after the attacks of 9/11. 

Fourteen of America’s biggest companies in Germany have their German headquarters in Frankfurt. In addition, many of the top American law firms, accounting firms, and advertising agencies are represented in Frankfurt.  In fact, a total of 830 US companies – (30 of which employ over 1,000 people) have established themselves in the area. 

In recognition of the strong American business presence in Frankfurt, it seems appropriate that Frankfurt is home to the headquarters of the American Chamber of Commerce in Germany. 

Given Frankfurt’s status as one of Germany’s and one of Europe’s major financial and industrial hubs, I would like to share with you some thoughts on the most urgent of the challenges our countries are currently facing. 

First, however, let me point out that 2009 is a special year for us.  Not quite three months ago, on the 4th of July, we celebrated the first anniversary of the opening of the U.S. Embassy at its historic Brandenburg Gate, location. This embassy and this location are symbols of freedom and unity in the eyes of Americans, and in the eyes of Germans. Several other anniversaries remind us of the long and often painful struggle which Germans and Americans fought, together, as friends and allies, to achieve German freedom and unity. 

We are also celebrating the 60th anniversary of the end of the Berlin Airlift, the 60th anniversary of the Federal Republic and its Grundgesetz and the 20th anniversary of the peaceful revolution that brought about the fall of the Berlin Wall and the reunification of Germany. With each anniversary are celebrating the success of our mutual unwavering commitment to freedom and our commitment to democracy.

This is a powerful legacy of German-American partnership.  This is a legacy which our political leaders can build on. During the eight months that President Obama has been in office, he has met with Chancellor Merkel many times. They have met bilaterally and at the G20 summits in London and Pittsburgh, at the NATO summit in Strasbourg, and at the EU-U.S. summit in Prague. President Obama and Chancellor Merkel have established a strong relationship. A relationship firmly based on trust and respect. They have established a strong basis  or continued growth in the historically strong partnership. The basic good relations that exist between our countries are due, in part, to the sustained good relationships on the personal, non-governmental level. Relationship fostered by organizations like the American-German Business Club.

So what is the status of the bonds between our people? Between Germans and Europeans on the one side and Americans on the other? 

The 2009 Transatlantic Trends Report recently issued by the German Marshall Fund showed marked improvement in public perceptions of the U.S. The Marshall Fund is the organization we use to keep our finger on the pulse of public perception is Germany. The report states, “In 2009, three-in-four people in the European Union and Turkey supported Obama’s handling of international affairs, a quadrupling of such approval compared with their judgment of President Bush in 2008. This reversal in sentiment is unprecedented in the eight years of Transatlantic Trends. Backing for Obama also buoyed favorable opinion of the United States, which returned to levels last seen in the 1990s. And desire for strong American global leadership was up in every country surveyed.”

From this survey, we can conclude that public sentiment strongly supports the excellent relationship between the Chancellor and the President.

At their meetings, both the President and the Chancellor have noted the challenges we face cannot be met by any one country. President Obama has articulated his commitment to addressing the critical challenges we face. Addressing these challenges through cooperation and through consultation with our partners and friends. The United States needs the support of Germany and the support of Europe to address today’s global challenges. 

Now, to focus on the financial and economic crisis--the collapse of Lehman Brothers more than a year ago-- threatened to trigger a chain reaction leading to the collapse of the financial system. In the United States, President Obama and his team are working on a major reform of our regulatory systems. Reform that must be matched in G20 and in the rest of the world. The importance of a healthy global financial system cannot be exaggerated. The financial system is the basis of the global economy. When the financial crisis turned into an economic crisis, the G-20 mustered impressive resolve not to repeat the mistakes of the 1930s.  They acted swiftly to launch a number of economic stimulus measures – from the American Recovery and Reinvestment Act to the “Abwrackprämie”. These measures are, already, showing positive results. In the United States, in the second quarter, home prices rose for the first time in three years and recorded a second-straight monthly increase in June.  The Consumer Confidence Index, which had retreated in July, made a strong rebound in August to 54.1, up from 47.4 a month earlier. 

The Dow Jones has gained approx. 50 % from its low point earlier this year. Recently, Federal Reserve Chairman Bernanke joined a growing number of economists who believe that the recession is over and that the economy is growing.

Good news is also coming out of German--where the economy, perhaps unexpectedly, grew in the second quarter. In its September report, the Bundesbank predicted a continuation of the trend for the third quarter. The Ifo-Business Climate Index rose again in August indicating that the economy is slowly recovering.

We are certainly not out of the woods entirely. Recovery might be slow and it might be fragile. It may not translate into a recovery of our labor markets any time soon, but we have reason to believe that we are headed in the right direction 

While struggling to come out of the recession, we must remain mindful of the importance of free trade and open markets --concepts that the Obama administration is committed to. There are concerns abroad about the Buy American provisions in the U.S. recovery package. The provision is strictly limited to the use of U.S.-produced iron, steel and manufactured goods in public buildings and public works. And use of American products is subject to non-availability, unreasonable cost, or other aspects of the public interest. The United States adhere to its international obligations to ensure open access to public procurement bids to member countries of the WTO, including Germany, including other EU members.  The U.S. stimulus package has not changed this. The United States will not retreat to protectionism—rather we will seek to expand existing trade arrangements and we will endeavor to make new trade arrangements.  The vigorous trade between our countries will continue without infringement.

Rüsselsheim is only 20 miles from here—and General Motors and Opel have been topics of discussion in recent weeks.  The automobile industry is a key industry on both sides of the Atlantic. Millions of German workers derive their employment from American companies in the auto sector. Just as millions of American workers work for German car manufacturers.  The auto industry continues to benefit both Germans and American. General Motors has been part a of this story as a good corporate citizen for many decades, since 1929. The Opel decision was a business decision, made in Detroit, not in Washington. Whatever the details of the arrangements turn out to be, one is certain: General Motors and Opel remained engaged in the German auto sector.

Beyond the immediate responses to the present crisis we must now focus on the long-term lessons from the near melt-down of the international financial system. President Obama invited the G-20 leaders to a summit in Pittsburgh which ended last week. The participating countries accounted for 85% of the world’s output. Let me quote the president to sum up the results of the summit: “In Pittsburgh, the world’s major economies agreed to continue our effort to spur global demand to put our people back to work. We committed ourselves to economic growth that is balanced and sustained— so that we avoid the booms and busts of the past. We reached an historic agreement to reform the global financial system—to promote responsibility and prevent abuse so that we never face a crisis like this again. And we reformed our international economic architecture, so that we can better coordinate our effort to meet the challenges of the 21st century.”

These results suggest that, in the long run, the global economy can emerge from the crisis stronger than before.

Our way forward is clear: we must all face the crisis together as we can only overcome it through a coordinated effort.  This is similar to the situation at the end of World War II. The post war situation led to new partnerships and institutions to meet a common threat. 

Threats we met at that time have been replaced by new threats emerging after the end of the Cold War and the reunification of Germany. The bipolar world in which relationships were defined by the East-West has evolved into a more complex, multi-polar world. A world in which our economies are more closely linked than ever before. Today we are challenged by failing states, insurgencies, terrorism, nuclear proliferation and environmental concerns. Many of these challenges were not even on our radar screens decades ago. 

In response to these new challenges, we must continue the legacy of our post-World-War II partnership. We must install in the hearts and minds of the younger generation a recognition of our common values and of our common goals. I applaud your efforts to engage young people in the struggle for economic prosperity with your “Entrepreneurs of Tomorrow” competition. And I applaud your sustained commitment to the German-American dialogue at the grass-roots level no matter who resides in the Kanzleramt; no matter who resides in the White House. This is the kind of civic engagement which our governments cannot mandate and which we cannot do without. I wish you continued success in your important work and thank you all for your attention.