Foreign trade promotion needs better instruments

Frankfurt a. M., 05/11/2023: In the FAZ edition of 30 October 2023, Stefan Liebing and Andreas Freytag present their joint position on foreign trade promotion.

Around half of Germany’s economic output depends on exports, which brings both advantages and risks. On the one hand, it protects against economic problems in times of a weak domestic economy, but on the other hand, the current phase of international crises and alliances reveals the risks of this dependency. It is therefore of great importance to carefully monitor economic relations with foreign countries.

Companies and politicians are equally challenged, whereby political measures and a reform of the federal government’s existing financing instruments are necessary. The latest steps taken by the federal government in this direction are in part positive, but also present some problems.

The expansion of guarantees for untied financial loans, particularly for investments in risky raw material projects and green energy in developing countries, is a welcome step towards securing investments abroad. However, the question arises as to why similar guarantees are not also offered for domestic projects, such as chip or battery factories.

The planned increase in cover for environmentally friendly products under Hermes guarantees is commendable, but the fact that gas-fired power plants abroad may not be insured at all could have a negative impact. The special conditions for green products are essentially similar to existing conditions in other countries.

In order to remain competitive, the German government must promote its financing measures for foreign investors and engineering, procurement and construction abroad, as other countries are already doing. It is also necessary to extend investment guarantees to selected economic risks in order to promote green energy projects in developing countries.

The German government should ensure that it does not mix its foreign trade promotion and climate policy objectives, but uses separate instruments for each objective. A revision and improvement of the initiatives in the aforementioned areas of foreign trade promotion is necessary.

More information: