Germany's Commitment to Freedom and Market Economy

The upcoming Bundestag elections hold significant implications for Germany's role in global governance. While the election outcome will not directly dictate the future order of the world, it will shape how Germany positions itself within forthcoming international decisions. Currently, Germany faces internal challenges, and dismissing regulatory frameworks as outdated would be a mistake.

For 75 years, Germany's economic success has been supported by a framework comprising strong ties with the United States and a commitment to a social market economy. This framework includes participation in a multilateral trading system. However, most elements of this structure are now under threat, and the necessary response is not to abandon it but to reaffirm commitment to it. Therefore, the results of the upcoming elections are crucial.

Historically, Germany has found no viable alternative to its transatlantic and European alignment. Attempts to navigate a multilateral world independently, especially when the continent's political and military strength is waning, are unrealistic. Political parties advocating for a distancing from the transatlantic alliance or a rapprochement with Russia pose risks to Germany's security and prosperity. Such parties should not be part of any future government.

As the United States embarks on another term under Donald Trump, supporters of the transatlantic partnership will need resilience. The U.S. will soon recognize that its foreign and security policies are robust only where Germany and Europe exhibit weaknesses, a reality that Trump has laid bare. However, the limits of American power stem not solely from its political decisions but also from a significant national debt financed largely by foreign investors and a waning industrial base in several sectors. The American economy, while powerful, is also vulnerable. To suggest that economic challenges can be resolved through erratic trade policies is misguided.

Germany has no reason to look down on other nations; rather, it has failed to prepare adequately for a more challenging future. The country is now confronted with the consequences of past complacency. The belief that good behavior on the international stage can be bought with financial incentives has proven ineffective, just as the notion that the state can effectively direct economic transformation has also faltered.

A revitalization of the social market economy is essential, granting companies greater freedom and reducing bureaucratic burdens. Furthermore, a critical reassessment of the state's role is necessary, focusing on establishing and guaranteeing a regulatory framework rather than intervening in markets. The primary responsibilities of a government, as outlined in Adam Smith's seminal work, include ensuring both external and internal security.

In both security and trade policy, Germany must take on a proactive and constructive role within Europe, moving beyond outdated perspectives that equate the European Union with German exploitation or financial imbalances.

The deficiencies within Germany's current approach have been well-documented. The next government must act decisively and swiftly, countering the notion that lengthy coalition negotiations are essential for governance. The speed with which global leaders, including Trump, operate will not accommodate delays from Berlin.