Tuesday 24 September 2013

A Crucial Win for Germany and India !!!!



Germany went to polls on Sep 22nd to elect 630 members for the 18th Bundestag. Election results have pronounced a clear victory for the Chancellor Angela Merkel of Christian Democratic Union (CDU) for the third time in a row. But the results are uncertain as she falls short of full majority by just 5 seats and hence she has to forge an alliance to form a coalition government. Its previous coalition partner, the pro-business Free Democratic Party (FDP) had a disastrous performance as it could garner mere 4.8% of votes. For the first time in FDP party history, it is rooted out of the Parliament.

CDU has been gifted with a stupendous majority of 42%, up by 7% from the last elections in 2009 along with its sister party Christian Social Union (CSU).  This is the highest majority attained by any party in the past five decades. The Germans have passed a verdict crediting her for deft handling of the economy in the face of brewing economic crisis in the Mediterranean and South European Countries. It now seems that she has to form a coalition with its opposition, the Centre –left, Social Democratic Party (SDP) as she narrowly missed the absolute majority. Negotiations might continue for months as she will be compelled to accept some of the leftist propositions like minimum wages and higher tax cuts for the super-rich. She might even be forced to change her stance with regard to the bailing out Greece, award stimulus packages to Portugal, Spain and Greece and might go slow on austerity drive.

Angela Merkel is perhaps the most influential person in Germany post world war-II. She has successfully brought down the unemployment rates from 12.1% 2005 when she was first elected to 5.3% now. Moreover, she is also going to create a history by overtaking Margret Thatcher’s record of the longest serving women. The polls are an indication of the conservative nature of Germans who revel in the status of a powerful economy and their eagerness to share the responsibilities.

Germany earlier adopted an approach wherein China was the main focal point of interest and had a long standing bilateral and trade relations with China. But owing to strained relations with China following the Chancellor’s meeting with Tibetan leader Dalai Lama, Germany started realising a greater need to foster ties with other developing countries in Asia.

Economic and Cultural relations between India and Germany are dated back to 16th century. India was the first nation to end Second World War with Germany. India has recognised the Federal Republic of Germany as a sovereign country way back in 1951 and both nations had strong commercial, cultural and strategic cooperation. India is the fifth largest business partner of Germany after China, Japan and South Korea, Singapore in Asia. India is ranked 28th among the trade partners of Germany accounting for 0.7% of total trade.  Germany renewed its trade agreements with India, after India’s consistent growth record during the past decade. It has ventured into Indian markets to tap the unexplored avenues and has become the eighth largest investor in India with inflows of USD 5.05 billion. Germany is also India’s second largest technology partner.  The largest co-operation is in the field of machinery, heavy vehicles, chemicals, technical consultancy services, computers and electronic appliances. Large automobile giants (BMW, Daimler, AG, Audi, Volkswagen and Porsche) have established their assembly units/ manufacturing units in India. Indian investments in Information Technology, Energy and Pharmaceuticals amount to USD 4 billion in Germany. Bilateral trade has improved consistently from USD 15 billion in 2007 to USD 24.2 billion in 2011.

Germany is one of the most highly developed nations. Together with China, it is the third largest economy in the World after US and Japan. It exports account to more than a trillion euro which is three times its national income. India and Germany have reached agreements on issues like environment protection and conservation of natural resources, energy and sustainable economic development. Both of   them are now desperately attempting to obtain a permanent seat in the Security Council.  Following the signing of defence agreements Indian Navy and German Navy has conducted exercises together. Further Germany helped India to obtain a waiver from Nuclear Supplier’s Group (NSG) to procure radioactive material for non nuclear purposes. Germany has extended its cooperation to combat terrorism. India has launched seven satellites into polar orbits for Germany. There are certain issues of disagreement as well which include India’s stand on carbon emissions, UN reforms and civil nuclear cooperation.

Several MoU’s have been signed between India and Germany in the fields of Science &Technology, bilateral research cooperation in biotechnology, environment, material sciences and vocational training. Germany is India’s most important research partner after US with more than 1000 post graduate community constitute the largest student group in Germany after Chinese. There are significant numbers of collaborations between the elite Indian and German institutes. Several exchange programs for students and young scientists have been vogue and new programs are initiated to foster greater cooperation in science and technology.

Unlike India, Germany has significant challenges to long–term sustained growth. Further its aging population and declining net immigration is increasing pressure on the social welfare system. It spends roughly 2.5% of GDP on Research and Development (R&D) and plans to increase it to 3%. Thus there is lot of scope for highly qualified technical and scientific personnel from developing countries like India, China and Brazil to work in coordinate with the research institutes in Germany. Germany has started the ambitious scientific policy with international appeal to connect with centres of excellence thus building networks and strategic partnerships with foreign institutions. Its existing 41million work force is estimated to decline owing to the demographic changes. There will shortage of 6 million skilled workers. Realising the implications of shortage of skilled work force, Qualified Professionals Initiative project was initiated. The program encourages the professionals from abroad to come to Germany and work. They have eased immigration rules and providing valuable advice for successful integration. Indian workers especially qualified professionals can have safe havens and reap the benefit of getting assimilated into the work stream highly developed country. Remittances can thus flow back to the country. Above all, currently India along with Germany constitutes the G4 nations that include Brazil and Japan, mutually promoting each other’s bid for a permanent seat in the UN Security Council.

Other than Israel, India is the only non-European country with which Germany has closer strategic and business relationship. The year 2011 was called year of Germany in India titled “Germany and India: Infinite opportunities” marking the completion of 60 years of relationship with Federal Republic of Germany (1951). Parallel programme was conducted in Germany with the motto of “Days of India in Germany: Connecting Cultures” in 2012-13 featuring events on Indian culture in various cities of Germany. The cultural sojourn of Germany in India is effectively synchronized by the six Max-Mueller Institutes which conduct German classes for students. Similarly Tagore Bhavan acts as Indian Culture Centre in Germany.

Germany is the main pillar of the European Union and the decisions made by the Chancellor would be of utmost importance not only to Europe but to the vast majority of countries whose economies are dependent on the EU member countries. Tactical decisions on Energy Policy, environment policy, financial policies of the block are influenced by the commitment of the Chancellor’s decision. Hence these elections are closely watched by the World. Particularly some of her commitments to end the use of nuclear power have a wider implication on the oil and gas imports and exports.

Following election results, German Envoy Michael Steiner reiterated that German government is going to be “pro-Europe, non-nationalistic and pro-Indian” and hinted about possible increase in trade volume. Germany is the economic powerhouse and anchor of Europe. Undoubtedly, nothing significant can ever happen without the agreement of Angela Merkel. She is the towering politician in Europe with strong commitment to a single currency and  sustainable European Union. The grand vision she has for the Europe will translate in the form of  strategic partnerships Germany will promote with major partners like India in near future.
 
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