 Good morning everyone. I would like to extend a warm welcome to everybody here on the panel But also in the audience to this panel on the German gamble To quickly jump into the topic in one or the other of you might have attended the talks that the European leaders gave this week at this World Economic Forum like three some a yesterday like Emanuel Macron and Angela Merkel on Wednesday and One might get the impression that a little shift is happening regarding the German leadership in Europe and the situation of Germany as a strong country in the European settings so When I remember it was about last autumn before the federal elections that the Financial Times wrote Germany has turned from the sick man of Europe to the engine of growth that this is still true in a way because the outlook is very promising a solid growth rate of 2.3 percent in 2017 and the lowest unemployment rate since the German re-unification Shows that Germany is on track business wise economic wise On the other hand we have a recent spoiler in the situation and that is politics Because it's been more than half a year that Angela Merkel is struggling to form a government And it's still not clear whether there will be one soon, which would be around eastern or we will be eventually heading Towards a new round of elections. This is Certain situation we haven't known up to now in Germany and it seems to somehow Paralyze the country and in this session we want to discuss how the developments are forming a new government or not forming a new Government in Berlin will impact not only the German situation, but also European economics and European politics Who will be the winner and who will be the loser of this game and this gamble? Our panelists in alphabetical order today this morning are Jacqueline Hunt She's a member of the board of management of the alliance group in Germany We have Gisbert Rue the CEO the chief executive officer of Klöckner in Germany We have Jan-Werner Müller Professor of politics at Princeton University in the US and we we have François Vera de Gallo the governor of the central bank of France. Welcome to you all. Happy to have you here on stage miss you view The German government is spin or the German chancellor has been struggling to form a government since September when Angela Merkel Went on stage this this Wednesday. She said she does not want to be pitied for the situation She just wants fingers crossed. What's your feeling about Germany? You pity the German chancellor or you cross fingers that something might happen soon First tell how delighted I am here as a non-german with a as a friend of Germany I couldn't have off-deutsch pressure. Wow, but that's it. That's it. We're Chinese of English practical sign and So I said as a French official as a committed European and as a friend of Germany without any doubt We Europeans need a strong Germany and I wouldn't pity the chancellor I would wish a stable government in Germany. It's obviously in German interests But we Europeans need a stable German government We need a strong Germany and we need some kind also of German leadership So I wouldn't overstate this issue About who is the leader in Europe? Where is the leadership in Europe? Is it shifting from a country a to a country B? What is important and this is one message here in Davos is that it's a window of opportunity for Europe as a whole Europe is back in some measure, but in order to consolidate that we need a stable and if possible pro-European German government Mr. Rül, there are Debates rumors in Germany that For the business sector it might not be that relevant whether there is a government in place or not. Would you agree to that? Yeah, I would agree to a certain extent Excuse me because When it's more of the same it doesn't really matter and so because what we need from the government is execution and so we have a we have a lot of subjects where we are Especially for instance digitalization Where execution is necessary and where where I'm seeing really no progress so far There are a lot of debates. There are a lot of discussions, but there is no execution and this against the world which is changing Faster and faster and not only in the US now where we have this big tech companies Which getting now back by the way a lot of money 250 billion which they can spend Additionally by the US tax reform by the US tax reform, but also from China So we have in the US we have Amazon we have Apple we have Facebook we have Google, but now on the other side We have Alibaba we have Tencent and We have Baidu and and they together all they all together have also meanwhile a market cap of more than a billion So that is that is a market cap of the DAX 30 of the largest 30 German Companies and against all this event all this technology is coming from here artificial intelligence Machine learning the clouds are all this technology is coming either from the US or from China And we are debating and this is what concerns me Let's just stick for a moment What you said at the beginning of your statement? You said if it's more of the same It doesn't make any sense and is do you mean more of it doesn't matter more of the same means what we have in the draft for Potential next grand collision is more just more of the same. Yeah mainly I would say mainly Mainly more of the same and what what what politicians also have to understand that that that the subject is the Compatible the competitiveness of the country itself. It's not necessarily the companies Now so we most of the companies are global anyhow, and most of the companies have more Most of their say it's anyhow outside of Germany So when when when when Germany loses competitiveness going forward that Necessarily that it doesn't necessarily mean that the companies losing competitiveness to so we because we can We can set up our digital hubs in the Silicon Valley or in Israel or whatever And and this is what they have to understand and when they're making no progress here concerning for instance The digital Administration the digital Netscape and so on when they're making no progress here then Germany will come lose competitiveness and not only Germany by the way Europe to and it seems to me that you're also pointing at One of the issues we are already having in Germany the transfer said that too on Wednesday that the country is divided And if business goes moves on in on a global sphere and politics Doesn't come along then then there will be another spread mr. Miller if we if you look at the the economic situation in Germany It's pretty promising. It's it's really good in a way Still we have the the results of the election that shows That show that people are very insecure. They feel insecure. They feel that they need to like take another Reclusive point of view on their country less Europe less globalization. How's that? How does it come from? So as you remember after the election and then the failure of the initial coalition talks Some observers went so far as to say this is the worst Crisis in German politics since Weimar some British observers said this either because of bad judgment or because of bad faith Because they wanted to distract from the disaster of Brexit. It's not that kind of crisis I think it's fair to say that the right to be populist party which has now made huge inroads as we all know would not have done So without Angela Merkel's decision in 2015 to open the borders temporarily for refugees So this is not some inevitable development I think as soon as there is a return to a situation where people feel that okay things not out of control We're not vulnerable because you know, nobody's really in charge of the situation a lot of these votes I think are likely to disappear having said that one thing has fundamentally changed up until this election There was there was structurally a left-wing majority in the German Bundestag If the Greens and the social Democrats had decided to have a coalition with a left-wing party They could have had for many years a left-wing government. This is no longer the case now Structurally, we have a right-wing majority. We have an openly Right-wing populist party that is clearly anti you then the sense was born out of your skepticism if you like We have a liberal party that I think it's flirting very much with your skepticism as well And we have Christian Democrats who are already asking the question What is going to happen post-mackle not just in terms of personnel But also in terms of political ideas right now as I'm sure you all know Everybody is very worried about social democracy. Who are they will they survive? I would be asking the question What about Christian democracy? What are they on a stand for post-angela mackle and especially if you look at the division between Christian Democrats and the Christian Social Union in Bavaria The letter clearly is also very fast moving very much to the right If you invite Victor Orban to your first meeting of the year, you're sending a very strong signal about where you want to go So in that sense, I think one thing one should look at for the long term is whether this Structural right-wing minority majority could have strong implications for what Germany really wants to do in Europe And there could be a much stronger doses not of being anti you of course, but more your skepticism than we used to No, I'm not a specialist in German politics, but a question about this writing right-wing move you describe What is the role in this move? Which is real of the migrant crisis which you mentioned and of euro skepticism? I think the first factor is much more important There is some euro skepticism But to give you a figure which is very impressive when you look at the support from your citizens for our single currency for the euro It is in Germany the strongest with 81 percent. This also says something Mrs. Hunt, can we can we let us be derailed in a way by the Developments mr. Miller just has described or shouldn't we still stick to to a track of of moving forward of Transforming Germany of transforming reforming the economy opening up to new technologies like mr. Real said How would you would you recommend the next steps from a business perspective? I mean certainly from a business perspective and and both of the other sort of panelists on my right have mentioned it You know, I think it's important that stability and clarity of of policy Is a consequence of the discussions and wherever they may or may not lead? And why that's important is because you know, I think Germany has had this very strong growth that your leader alluded to great underlying economic performance a lot of that has actually been driven over the last three four years out of Increasing engagement from the workforce, you know, labor participation rates have increased an average of about 1.1 percent Some of that actually driven by immigration So about three million net immigration into into Germany over the last four years And that has driven a lot of the the the sort of growth that we've seen of the period Our view is that that is sustainable so we could see a strong German economy for a period of time But actually if you look further out what that risks masking is actually the underlying Demographic changes that are happening in Germany and once you start hitting sort of 2020 There are fewer and fewer working-age Germans in the population And so this question about even in and of itself if Germany were just a domestic economy And I'll come back to Europe in a second But if you were just a domestic economy, I think there are structural changes within Germany that absolutely mean We need to focus as policymakers On things like you know ensuring that there is an encouragement and activity and execution around investment and innovation and digital is one element of that But they are the elements as well, you know, I think there's this whole transformation of working expectations There's a transformation in terms of what is going to be necessary from a skills perspective And there's been a lot of rhetoric about it and you know, Germany has a unique Capability to actually address some of these issues both given its history and its ability its strong You know sort of industry policy in the past and then it's financing position. It's its economic position, you know with a With a surplus and and the opportunity to actually put some money in and get it working The opportunity to create an easier environment for private Institutions to invest into the German economy and we can maybe talk a little bit about that as well So I think I think that in and of itself must be an objective You know, I think from the the European Union perspective and from the markets more more broadly You know, I think I think moving forward from this position where we found ourselves This feels to me like a good time, you know, Europe is now growing I think there's new leadership. There's new energy and I agree that you know One shouldn't worry about who's the leader and you know, this is about collaboration This is about being open and as a region effectively driving the region forward And I think that's absolutely going to be necessary when you see the degree to which Protectionism is rising elsewhere. So I think for Germany and Europe more generally to remain competitive Things like, you know, looking at what's happening in terms of corporate tax rates not a rate to the book not a race to the bottom But you know, but that's the question whether this will happen now America Like like boldly lowering corporate tax France lowering corporate tax Germany Yeah, doesn't do anything and I think these are the sorts of questions that, you know Irrespective of how the political landscape plays out I think we should be asking policymakers to get an agreement and some action behind and I think business then You know is in a position to help support and help drive and you know, help get the right sort of outcomes But I think we do need that that action where we stand today Both of you said that it's not relevant. Who's the leader in Europe because we are Community we all need to get get going together. I can I can relate to that in a way, but still if I compare what what you just said and What what Angela Merkel and Emmanuel Macron pointed out on stage at the World Economic Forum this this week then I Think we're actually at a turning point and that would be would be my thesis I hope you you can somehow relate to that that in the in the times of crisis Angela Merkel did a really good job to stabilize Europe not letting it fall apart now. We are We are moving into the growth dimension and now you need someone who really who's really addressing the issues like lowering corporate tax investing in into innovation investing into skilling People especially young women like Emmanuel Macron pointed out. So I think there is a difference. Who's the leader in Germany? In Europe, I'm sorry. No, may I say two things first? I would not exaggerate the parallel between the US tax reform and the French one and I Can understand the enthusiast's short term of business for the US tax reform But it raises many economic and social questions Let us be clear in the long run and we will probably see the problems later But the most important remark is following Jacqueline said presently a Strong Europe needs a strong Germany But a balanced word needs a strong Europe and this is more more important than ever We have protectionist trends. You have unilateral trends starting in the US If we want to follow the receipt of success, which is multilateral rules of the game since World War two This is the role of Europe in this present world today And it's why not only we French or we Europeans needs a strong Germany It's why the old world needs a strong Europe on the world stage to say this are the multilateral rule of the game and on this Conviction we Germans and French completely agree. This is one of the most important message of today It's why we need to act together because if not, so the unilateral or protectionist trend Are at risk of winning and it says something it's what president Macron said when he says that globalization Is a crisis at present? We need to re-inform our multilateral convictions. This is the role of Europe I would absolutely agree with that. I mean, I think in an environment where Multilateralism has fallen out of favor and has lost the US seemingly as its main proponent The question becomes who steps into that sort of role and if you believe as I do absolutely that Multilateralism has brought a period of, you know Unexperienced sort of growth and peace and prosperity on a global basis and post-World War two You know, why why would we not seek to have a strong voice to effectively push that forward? And it seems that that is the role of Europe because there's no there's no other voice that can stand there I do think I want to be with Canada and some Asian countries, but Europe is absolutely necessary I did want to pick up this point about, you know, leader or not leader I mean taking a business analogy the strongest teams are often the teams where you can do both where you've got individuals Who will effectively play a role and sometimes this is personified as sort of the CEO versus the CFO type job But actually it's more fluid than that in good organizations But someone who could both paint the vision and the aspiration and give the dynamism and then someone else who can follow behind And actually make sure that it happens that it's balanced that you take people along with you And so I can see depending on obviously on how it all works I can see a very strong partnership actually where both parties are Drivers and have sort of a co-leadership role if you put it that way, but with very different starting positions You know, I think it's great to dream and some of the comments that we heard about You know the ultimate sort of outlook are very aspirational I think you need to have that aspiration to move forward, but equally, you know, we shouldn't be fooling ourselves. I mean this is Strengthening Europe has some consequences. It would be difficult to take everybody alongside And so I think having someone who follows behind and you know effectively talks to him brings people along and is maybe a little more Pragmatic a little more Realistic without necessarily downplaying that dream. I think that could be a strong combination Mr. Ruhl Can you can you relate to what miss Sanchez said or or would you have wished that the the vibrant talk Emal Macron gave on Wednesday here would have been the one that the German Chancellor had proposed Difficult to say and so maybe The talk might have been a bit long Merkel was was much shorter. I think only one-third of the time what she needed but but What is yeah, okay? What is necessary in Germany and Europe is the same than in Germany also here I'm clearly missing Execution now also here. We're making no progress and and we might so I Go on forward The European Union for the next one and a half years might tied up with a Brexit for instance So the world is moving on and and we have to organize the Brexit here in Europe and also issues like the the Subjects like the single digital market and so on also here. We're making not any progress and and and what what I what I really Don't understand is so everyone knows what what what what they have to do But no one is doing it and why? Don't we try it for instance in Europe that for instance Germany and France and maybe one other country moving ahead and try something and do something now for instance and only as an example a Fund venture capital fund a big venture capital fund to make Europe here more competitive now so Eman and Macron announced that they want to release a 10 billion fund I don't know immediately or throughout a couple of years, but Disruptive innovation for disruptive innovation and but but this is this is what we need We need also we need some practical things and and also an education We cannot wait until the education system has been reformed when this takes five or ten years And then this is too late. Let's start. Let's start small. Let's let's do it. Yeah, like startups Let's start with the minimal viable product and then We see how it works and and if we fail we change it But but but this is clearly what what I'm missing. I'm always hearing statements, but I am seeing no Action at all. Mr. Miller. What would be the the minimal viable product for the German government? Information Unfortunately, it always has to be academics who spoil the wonderful sense of optimism and cold cooperation and we're all moving together and so on So I think the good news is actually that if it becomes a grand coalition They need to have a story about why they are in government. This is a coalition that nobody really wanted So somehow they have to tell something to people about what they really are about to do and to say Oh, we'll just do piecemeal reform might not be might not work very well as a story up to now There is no, but there could be a story because story could be The story could be that Angela Merkel by now clearly must have her eyes on the history books What is she really going to leave behind? I think she will not want to go down in the history books as the person who inflicted endless pain on young southern Europeans via austerity So I think she is very much in theory interested in leaving a permanent reformed architecture of the European Union Martin Schultz is a professional European after the election. He said I want the United States of Europe Of course the typical thing that people then say why didn't you tell us during the election? Well, how come the politicians only afterwards come out with these, you know great ideas But in theory more by default than by design they could say this is actually our chance Maybe it's the last time we're gonna have a grand coalition for quite some time We have people who are committed to this idea Let's together with Emmanuel Macron and others who want to join in do something more permanently viable for Europe That's the good news I think this could really happen the bad news is that There's still of course many differences I mean there are many things that they can agree on with my what Macron said at the Sorbonne But I think we should not kid ourselves I mean German ideas about Europe French ideas about Europe remain somewhat different all this in the context of a much more Fragmented Europe than probably we've ever seen and perhaps less obviously also in Europe Where over the long haul now the Commission has really been much weakened I mean, I think we by now we've sort of almost forgotten how in the old days was Commission who took the lead It wasn't national leaders who always had to agree on whether you know do we now be Go forward as the big engine Commission in a sense was setting the tone just think back to summer like de la And be partly because of the euro crisis the Commission has been very much sidelined So we should not be naive about the sort of the changed overall structural context of how European integration works But if there is the will and the will to compromise as always in Europe I think interesting things could actually still happen in the next four years or so and in the draft paper for for the start of Coalition talks Europe is is the beginning It's I think that the strongest part of the whole paper so that Could be one indication that you're right in your interpretation. I think in on paper. It's easy to commit to this Politically they would really you have to risk something because I mean you're absolutely right that people still like the euro But if you look at numbers, you know when when Germans asked you trust the ECB doesn't look so great Because this narrative has taken hold that look the ECB is basically robbing people of their savings, you know with these interest rates And so I will react In terms of you know if you have to tell people this is what we need to do now This is why it says to be great moment for European integration I think you're gonna get a little bit of resistance so they would have to really say look Grand Coalition is something unusual needs special justification and You know we have to convince people that even though economically things are pretty good for Germans right now This is actually the right time to be more ambitious in terms of a European architecture I think the case can be made people could be persuaded But Mackle would have to maybe overcome her how to put this politely a version to sort of risking too much leading too much from up front Should basically have to convince his party that this is also a good left-wing project and not just with all due respect About business and so on and so forth So it's it's not an easy proposition, but I think it could be done. You wanted to read. No I Was in Maastricht 25 years ago So I can witness one thing that we should not Idealize the good old days and saying that a quarter of century ago It was much easier to have a French German discussion. It was already Tough I can say you so we have German French debates and we need having them But what we can achieve is progress Answering probably to German words, which I take very seriously The first one is the one you mentioned about the risk of monetary policy being overburdened or ECB being Overresponsible so to say it's why we need a stronger economic union because we need other common economic tools In order for monetary policy not to be the only game in town when the next recession will come And this is a German worry. I perfectly understand and then the second thing we could explain is going in mr. Rules Directions that it will help European competitiveness and here you are completely right on Digitalization we could also mention energy transition a semi scaling up and such other thing We have huge investment needs in Europe Let me offer a simple answer at least in words, which is capital market unions We have huge savings in Europe We have 350 billion euro each year of excess savings towards investment in Europe We should better foster these savings towards the investment needs you mentioned and this is private we're sharing But it's about financial regulation. It's about banking union It's about quote-unquote boring topics But this boring topics this technical agenda would serve the economic purpose we fully share And if you look at the single market 30 years ago, it was also a technical agenda But we delivered it for a very good economic purpose We could have the same story today and here I see no political difficulty It's a practical answer to Europe's fence 100 billion this right and R&D But also more in common or general Technologies and and and not in not really new technologies when we took on what took only 10% Then this would be already a big step forward probably but we we have the resources We have the needs what we need is to is a simple as that to channel this private resources to the investment needs We mentioned including research Regarding a financial policy in Europe, Mrs. And would you would you think the the ideas in Germany and in France to set up a joint European financial Policy strategy and to to part at least partly have a joint European budget Would that help from a business perspective or what impact would that have so I think I mean I would absolutely agree with the comments that you made about the CMU the the common Muntree Union You know, I think moving that forward Capital markets me sorry That forward is is an important step, you know, I think if you look at competitiveness of Europe I think that would make a significant difference I think if you look at is it politically toxic or not I don't think it is I agree that absolutely the the the CMU is a way you could move forward I think this question about you know the ESM and and some of the backstop again I think while a little more difficult politically I think it's achievable and it's certainly necessary in terms of the eurozone and you know Actually using the good times to actually help support or to take the action that will be necessary actually in some of the more difficult times I do think they're then a lot of other activities that could be identified Where where there is a commonness or a common sort of view I think between between France and Germany And in fact some of the European Union countries as well and these are things like you know sort of youth unemployment And what are we doing apprenticeship schemes the retraining? Investment into new technologies So it seems to me that there's a range of maybe I don't know five or six different activities that could be undertaken That could show real progress actually and and deeper integration both in the in the actual Infrastructure of the European Union and you know how it operates and then also just some very practical You know sort of social good Do I think that that matters from a business perspective? Yes, but I'll come back to my earlier comments Which is I think if Germany just waits for Consensus with others whether it's France or others to actually act I think then we've missed the timing, you know I think there is this need irrespective in terms of creating, you know an attractive business environment In terms of creating the right sort of skills competencies capable capabilities of in terms of education You know the ease of starting up businesses in Germany And these are things that they can act on without getting agreement from from across the political sphere And I think if you look at it from a business perspective in the short term Those are probably the things that would make the most difference actually Rather than the wider question of you know, how do you go with the European and project more more broadly? Germany currently has an investment gap of about 130 billion euro and we have unbelievably but true we have unbelievable but true we have 30,000 industrial areas not being connected to to the Fast internet So what does this one example now what what you were saying? So the digital infrastructure So that is there is something which which a company has to have gone forward when when it wants to stay competitive It's and and so it's it's and and it's not only only broadband It's also 5g but we don't need it in every forest So when you're discussing this was Politicians and then you often hear okay I most lately was in the touring of forest and I couldn't make a telephone a phone call a mobile Call but so but but at least we have the industrial centers and so they So why don't we begin there? No, so we don't have to spread it throughout the country But so this is a digital infrastructure is one what could Germany do on its own no doubt about it It's actually not just the forest it's enough to try to ride on a train and make a telephone call which is already very difficult in germany this doesn't work and and Or e-government government says also something what you need going forward to stay Competitive and and this also what helped my and maybe Governance to understand how important this is and how this works, and so when they do it by their own and other other issues or subjects like like the single European digital markets of course something where you need Europe But this is also extremely important because you have to we just had the discussions Discussion here this morning with startups they have problems to scale because Scaling in each country and in Europe is much more difficult than scale into the US and one guy was saying okay next time I would start in the Silicon Valley because then I immediately have a 300 billion market and and and and yeah, so they are there but but this is not new everyone knows it and Maybe a question to the capital markets Review capital markets union together with Yeah, what about but what about by the way when when the the German pension system when out of the German pension system It would be possible for instance to spend 3% or so for new technologies. What that be something which would work In in terms of what you mean taking out of the pension system and putting in so you know I think in terms of funding If if it was clear what was being achieved what the desire was I don't think there's a lack of funding You know, I think the question as to whether it comes out of a pension system whether it's private capital whatever it might be You know, I think is a secondary question in many ways I think the question is the willingness to actually move it forward and to take the activity around it and I think the funding will will follow because you know in terms of If one were to look as a pure investor at an opportunity to invest in you know Digitalizing Germany to a greater extent all of the history would show if you look at the agenda 2010 sort of labor Reform, you know hugely successful. So you would have the sense of a track record a sense of position I mean certainly the existing You know the existing sort of very educated very specialized workforce would be attractive to invest into so it feels to me Like that's a secondary question in part But but certainly the concept of whether it's establishing funds the fund structure that my crumb talked about or you know Something else like that You know, I think that's the way of of how do you take it forward? Is that necessary or not? Let's let's take one example and when we talk about a broadband internet when we talk about connectivity That's just taking Germany up to a certain situation in which other countries like Estonia or whatever have we Have arrived a long time ago So but looking into the future talking about for example artificial intelligence we and data management We have the situation that data platform Platforms are a huge issue. China has one Russia has one. Yes, the US have one of course Europe doesn't have one Isn't that something where we at the moment lack? Leadership with a consequence that for the industrial Internet We will experience almost the same like we did for the for the commercial Internet in the first round. I think it's a really interesting question that I mean I think if you start from the premise that actually value as we increasingly move forward lies in data and data analytics and You know, I think there's certainly indications a lot of that sort of theme through through the forum If you start from that position the question becomes, you know, who owns that that data And I think the fact that Europe has Really, I think no no internet-based companies in the top 30, you know, very little Existing sort of skill and competency and capability in the sort of space is is problematic Which is something we should be looking at in some form I think there's a second question to it, which is and and this may be my my personal perception I think I think Europeans generally feel differently about data than say the Americans and the Chinese do And so I think there's almost a policy question that comes first and foremost Which is what is it that Europe would stand for in terms of data? And I think you know the so the data protection act, you know, there's there's a There's a individual protection about it this belief that data belongs to the individual that there's a right to privacy That runs through a lot of the sort of regulation on the data front in Europe And I think that would almost counterbalance or be the exact opposite actually of These large data platforms that are being created in the US or China So I think the question for Europe around data is do we believe that actually data should be The the source of value in the future And and what role do we want our individuals in our societies to play in that data? And what does that they mean in terms of the existing footprint? I think absent that what will happen is, you know, the commercial Benefits or the state-driven benefits of data ownership will subsume Europe in its wake And we'll be playing, you know, we'll be paying on the back foot all the time And I think that's a little bit of what's happening here There's a an attempt to defend Rather than to create an offensive strategy in some form And is it a question of belief or is it a question of facts and figures that that data platforms will be the future of business all over the world? I think they they are already to a certain extent. So all this platform in this platform economy is based on data and And then data is already the new oil. So this is already there and and But but for Europe concerning concerning this data platforms. It's too late anyhow No, so the big data platforms in the US and and and in China and all what when we working on clouds also from a business perspective Typically these are clouds Which are in US clouds, so it's it's a Google cloud. It's the Amazon cloud and and it's not It's not a European cloud. So this I think and and also concerning IOT internet of things Okay, we in Germany think with industry for zero that that we have at least reach competitive position but But the technologies we use for industry for zero or IOT are again Coming mostly then from the US now, so it's again. It's it's artificial intelligence is machine learning clouds and And and this is risk risky also going forward because of talent now What will happen is also that then talent talent goes where the technology is and and and and so we might even Also, we're talking about the skills get maybe we don't need this to close the skill skip anymore when we not move them forward because then The talent has moved anyhow I think you're right that it's already too late But just to counter the maybe the slight sense of skepticism that all these anxious Europeans They want to hold their data and they have all these irrational worries Putting it very crudely And in a cliched way you might say might say I mean if you look at American political culture The leading value remains freedom and pursuit of happiness in post for Europe the leading value is Individual dignity and if you remember that European integration was always primarily a political project for which the economy was a means and not an end It also opens a possibility For European leaders to say look if you ask what has Europe done for you lately a certain type of protection If people want that and democratic determined that this is what they want is actually a positive answer to that worry So politically it's not all you know bleak and bad because always only of it means that we are sort of falling behind if people can somehow combine the right kind of economic measures with a Particular to put a very grandly civilizational model where individual dignity matters more I think it's actually a positive thing and not just a negative But let me let me tell some story here So concerning individual data, and so we have the European data protection law and we figured out that Business personal data is treated Like like personal data. So there is no difference So when you go on forward when when you give someone a business card and you want to memorize this data It falls under the data protection law. I went to Berlin. I went to Brussels. I discussed it with politicians on both sides and They all agreed that this has to be changed and and then we discussed in Brussels How long it will take and it and then they're saying me it will take at least five years to change it And I then I said okay, then forget about it. So it's and it's too late anyway So it's this even even the small even small changes So difficult to achieve take much too long No, perhaps one word about is it too late for us Europeans the battle of yesterday is lost without any doubt The battle of tomorrow is still open and who knows which will be the technologies in 10 years So it's still an open battle and the role of public authorities including at European level is to create a you a favorable framework with three elements Financing this is a capital markets Union Regulation this is a single market and we need a digital single market with probably a single authority and Research talents. This is the role of public authorities and then it's up to entrepreneurs They will not create the European platforms or the European tank companies of tomorrow and here We have some motive for optimism when we look at German or French or Spanish youth We have young entrepreneurs more than ever, but it's up to us to create a favorable framework, but they need money So and and they they don't getting enough money And so they might maybe maybe when they start in the seed phase they're getting the money they need but then when they want to scale Okay, then they then they have again then they have okay This is part of the capital market union We should create European cross-border venture capital funds and not only seed money, but scale up money This is this is also up to private business sure, but I contradict in one point that that If you look at for example the digital risk Republic of Estonia once again You see that setting up a national blockchain for example could be an idea if if Angela Merkel and a Malin Macron would step up and say We need a European blockchain. We could tackle the migration issue. We could tackle tax issues You could tackle everything with that and that would be really progressive Would set an example why not but again my only message with German entrepreneurs is to say I would be surprised German Entrepreneurs saying the only answer lies with public authorities for sure. This is not my vision of social and marked No, but it's an important responsibility to create a favorable framework. I would like to open up the discussion to to the audience Whenever you have a question, please get up We have a microphone over there and if you would like to introduce yourself quickly, that would be great Please that's the first question over here So I'm medical case I teach Princeton University about the data and about the e-commerce and the platforms I think that this is the first phase of of this economy and It's these are mass products. This data is very total logical It's algorithmic to get ahead of it would be to do a luxury market and since this is by definition a global e-commerce There should be the non algorithmic Processing of the data because data is nothing information is nothing without Navigation without what what you are doing with it and the way it is now Navigated it goes into the the kind of business of the Coca-Cola of like the total logical the bubbles the echo chamber the the there is no in fact Pedagogy and heuristics and getting ahead of demand getting ahead of just sussing out demand and then giving the supply but having the kind of Business Invention when you are giving when you are sussing out When you are giving the supply Educatively that might change and create more sophisticated demands so there are areas that I'm familiar with I Teach film and I see how Europe has destroyed the possibility of research of art films and teaching of art films by the new economic laws that I Done for turn that into a question. Yes, the question is that why is it that? the the business world is not trying to go ahead of of the of the the morally already disadvantageous Handling of data and Rely on Intellectual and artistic talent and just talent in general Not to have the algorithmic approach to data, but a kind of a moral approach to data when it's not data anymore Answer that question. I'm not sure Question correctly, but let me say it in this way So when we as a as a corporate When we really want to do something with data So this will probably only successful when we when we when we are able to Develop new business models or even disruptive business models with with data and because other than that it's more an improving of the same improving improving along our products improving along our services and and and this disrupt this Disruption of yourself With data with new business models. This is something where we especially as traditional Corporates, which is which is to a certain extent difficult. So we here we have the innovators dilemma and principle and But here again this so we we doing this also Together so here you need someone from outside here You need again also the the startup community now for instance to develop this kind of new business models for instance When you take the automotive industry and so we always coming from the automotive and and we still and we still Thinking about data then it's more the improvement of a car But it's not a new business model for for this new mobility model and this is The issue we were fighting with and corporate can I maybe add something a little a little bit different again I'm not quite sure if it's on point, but I want to come back to this thing about is it too late And I fundamentally don't believe it's too late I think what we do is we look at the Googles and the Amazons and all the rest of the world And we think data is all about you know individuals social media and personal preferences and there's certainly I mean that's a big part of consumer Products that'll be a big part of you know sort of how How new products how new businesses are developed? There's a lot of data that isn't about that And so you look at something like the German healthcare system my understanding And I'm no specialist in Sarah But my understanding is because of the way the German healthcare system works it has more deep and detailed data It attributed to an individual than than any other healthcare sort of environment And so there are a lot of healthcare providers saying is there anything that we can do on an anonymized basis? So not using individuals data, but because we then understand from this healthcare system the likely progression of diseases and the likely responsiveness to treatments If you look at other examples, you know in industry like ours You know not at the sort of the retail end of it, but in terms of things like you know How do you make good investment decisions? A lot of investment decisions are driven by Emotions, you know human beings making those decisions and sometimes emotions are good, but sometimes they're really bad That's what triggers people always to sell into you know falling market and and to buy you know at the peak So how do you effectively use data to take out the bad investment decisions? And then a million others when you go to the Internet of things when you look at you know sort of integrated applications Millions of examples. We actually I think we are pretty nascent in terms of what is happening with data And where I think you know Europe could absolutely create You know its own position its own Strategy and and work out how it drives competitiveness in an ethical and a moral way that you know People are comfortable with in terms of their data usage. There was another question over here My name is Kristen Jensen and come from Denmark and I would like to go back to the beginning We talked about the future of the Great Coalition and you mentioned Miller that they could have a new narrative about doing something with France changing Europe and There's no Discussion there's more need for Europe now than ever before That's just this problem. It's the European ready for that in 2016. We had three referendums All of them the government lost Denmark the Netherlands Great Britain if you look at Romania Hungary Poland the Czech Republic Some of the Scandinavian countries. There's a great distrust in having more integration So you described a project for the coming German government. I hope there will be a coming German government as a Euro integration project, but how would they get the European on bought that? I'm glad to have the next three hours I think we should get away first of all from a A question that always revolves around more or less Europe In some areas it might be a good idea to have less Europe in some areas I think we've learned that even though nobody wants to describe it in those terms We're actually seeing the emergence of what traditionally we would see as the characteristics of a state common currency common borders and What we've learned is that well you can't really stop halfway with certain things You might say oh if we could start all over again We would have done it differently, but now given where we are if you want to stick with this and since the Consequences of dismantling it are pretty much unpredictable. We have to take further steps So that's already a different framing than simply saying the old line of oh There always has to be more Europe because that's automatically always better So if you give reasons and if you convince people that look to really kind of make something work that we've already embarked on You need to do this. That's a different. I think narrative than simply saying Automatically always more and more and more so in that sense. I think it's it's not impossible to convince people What of course makes it difficult is not that you know the European public wakes up one day and says oh god You're we don't actually like it. It's the fact that as you know many national leaders have basically made it their business to say Oh Brussels, you know look at with all due respect someone like Mark Rutter, you know who's seen as a kind of pro European liberal leader I mean for years he's been saying oh Brussels really terrible and then God forbid yes He has a referendum and he gets a result where turns out that Dutch public doesn't like Europe so much well God forbid why could that be could that be because national leaders in a sense of taking the easy way route of always blaming Brussels and so on Now I don't really naive I mean of course you cannot tell these people be a better person be more upfront and honest about how this really works But it's also not hopeless to I think say look if we really want to make this work We have to do certain things the Other in a sense issue that you pointed to I think is of a different nature Hungary and Poland this is not really about more or less Europe I think it's sometimes represented like this by these national leaders and they basically say look You know we don't want more integration like this because we think the nation state should remain primary But the real story as you might agree is that they have basically engaged in Power grabs within their own countries and that when people then say oh the populists are at the gates But you know thank God unlike last year in Davos now we sort of kept them out no populist iron power in Budapest and Warsaw and The reason they don't want more integration is that in a sense they see it as a threat to their Particular kind of government power. So I think that requires a quite different different response I will go back to the beginning and say you know how say over inviting Victor Orban to Munich and say Victor Orban is a great guy for the rule of law That doesn't help either My head that democracy in Europe is not only about the referendum of 2016 which you mentioned They were very important national election beat in the Netherlands or in my home country which gave a Strongly different signal especially mr. Macron won against a nationalist tense as you know And when you look at opinion polls since Due to Brexit probably due to one of the referendums you mentioned European support and your support increased in all the countries in all the countries including in Germany It doesn't mean that your skepticism has disappeared And could I say that in some measure your skepticism is useful for our discussion because it says something and here I joined probably what Professor Müller said we must be concrete in Europe We must have a Europe of projects and not only of many votes talks We probably this is my personal view devoted too much energy about Institutions how it works what is more important for citizens is what it produces as Concrete progresses what we said about capital market union what we said about the digital single market What we could say about a print I ship cross border I am an advocate personally of an eras most pro program for young and qualified Europeans This is Europe of projects and this is for me the best answer to this Eurosceptic stimulus We have time for one more question too much snip communications strategist great debate Congratulations, but quite elitist as it should be I would like to go back to the very beginning again the IFT the rise of the Populists not only in Germany, but elsewhere in Europe too My view is that you know a lot of these political gains they got was Coming from a regions where there is no infrastructure anymore So people do have the very distinct feeling that the state is failing them It's I'm not sure whether it's it's sort of so much about you know the immigrants But the immigrants might have been the the rot that sort of ignited the whole thing So here's my concrete question a Professor Muller do you agree that that might be might have been a triggering point that people really feel that government is failing them on a very Concrete day-to-day level no shops anymore. No bus lines anymore. No banks anymore and so on and so forth and number two very often I feel that Business and politics are two parts of the of the equation that you know the Business very often acts like if there are the opposition Wouldn't it be a good idea to say come on? Let's sit all down and think what we can do for business for example to invest in eastern Germany as one part of Some rural areas where there's not not so much infrastructure and really work it out together because I think the more and more populists rise the more and more Maneuver room you take away from politicians to do the right thing and to in one way or the other by doing something or not doing something You know react to these guys this by the way what we done here and and I was in the last couple of days and I think we also had a couple of fruitful discussions, but when they decide then they are on their own again, so Maybe a quick answer. Yeah Up are the voters of populist parties discontent. Yes, obviously are the reasons primarily economic No, I think social science is absolutely clear on this the economic anxiety story doesn't work So that's why also in countries that are economically doing very well You have very successful populist parties second point. Is this an unstoppable development as has sometimes been suggested? No, the single most important factor in whether these parties come to power is the behavior of conservative parties Where these conservative parties decide to collaborate with them as an Austria as in the UK as in the United States They will come to power if conservatives says no, we draw the line. They will not come to power a Very very quick last round if you all were an advisor to the Germans Chancellor for the coalition talks One as a specific point that you really would like to introduce to her Mrs. Hunt, please start the draft document was Largely silent on this question of investment and innovation and you know How do you actually drive the German economy forward make Germany more? Attractive as a location to do business in and I would absolutely say, you know, that can be the backbone of reinvigorating some of these You know less less fortunate areas You know, I think working through, you know, what what does that policy look like in a real way? You know in in a project-based way, whatever it might be not just grand ideas I would say, you know, that would give you a reason to go forward that would be kind of a common thing that might pull it together Okay, very quick your idea the German Chancellor had a French advisor. It would be a tremendous change But my only advice and perhaps to the German leaders and my German friends as a whole Would be something like don't be afraid be more self-confident today. We need you in Europe We need a strong Germany and a stronger German integration a practical a concrete one is in German interest There is no contradiction on the contrary Okay, other practically I would say now It's probably difficult to change it. So I would say if so then then but then please execute Execution execution is interesting advice. It's like Mr. Miller the last advice but not least Build up a successor who will prevent the party from lurching, right? She has unfortunately often if I may put it that way executed plausible successors who look very good In the past now is the time to build up some kind of statesman or for the metastate's woman Who can look for who is pro-European who can maybe join Emmanuel Macron if he stays in power for one longer To kind of drive Europe forward Very forward-looking advice that totally relates to the practical approach. We we know from business if it's run in a in a Decent way. Thank you all very much here on the panel. Thanks to the audience for listening and have a great day