Ladies and gentlemen,

dear friends and colleagues,

Isaac Newton said, "We build too many walls and not enough bridges." That is very true. The German people know that better than anyone else. The Atlantik-Brücke is dedicated to building bridges.

The German-American relations, this bridge, was designed over 60 years ago and is still standing today. It has tall and impressive columns such as the Marshall Plan or the integration of post-war Germany into NATO as well as the United Nations and the European Union. But it also has strong and flexible cables necessary to weather storms that may occur from time to time. Those cables are made up by numerous personal relationships between people who travel back and forth between our two countries, who communicate, who exchange ideas and opinions. Be it on business or holiday. Let’s call them citizen-ambassadors, because that’s exactly what they are. They are representatives of our two cultures. And they speak on behalf of our countries - everyone in his or her own personal way. They meet in the offices of Wall Street or downtown Frankfurt, in the streets of Boston and Berlin. And many, many meet in beautiful Hamburg - the city I call home. And of course, nowadays they also meet on Facebook.

No matter where our citizens meet, friendships and partnerships are formed. Those personal ties may just be the most important part of the entire design of the bridge connecting us.

The Atlantik-Brücke” is an organization dedicated to building and maintaining the bridge between friends and partners who live on opposite sides of the Atlantic. It brings people together. It facilitates dialogue. And most importantly, it keeps a watchful eye on the bridge’s columns and cables and makes sure they remain strong and intact.

I feel honored to have been invited to speak here today and to be in the company of so many (young) men and women, who have dedicated themselves to the improvement of German-American friendship, which is so important for our two nations.

Tonight, I’d like to speak to you about the opportunities and the challenges that German economy faces.

Discussions about Germany's economy almost always focus on two aspects - the strength of the German export sector and the skilled workforce. Both are quite obviously connected.

However, there is an ongoing debate on both subjects. There are some who criticize the predominance of the German export sector, and there is the rising question about whether there will be a sufficient supply of skilled workers to meet the future demands of Germany’s economy. I would like to draw some light on a couple of points in this discussion.

Let me begin by focusing on the export sector.

As the crisis of re-financing national budgets hit the euro-zone as a whole and countries like Greece in particular, Germany's export strength was criticized by many as being one of the reasons for the problems. Among those who voiced this opinion were such prominent figures as the French minister of Economy, Industry and Employment, Madame Christine Lagarde. And there have been other well-known critics as well.

Many of our citizens were utterly puzzled. But not all were surprised. Because there has been an ongoing national debate about whether Germany has been too focused on the export sector and whether or not we should turn more attention towards our domestic demands.

Those views certainly bear some truth. Nevertheless I would like to present you a number of counter-assumptions.

First assumption: Germany's export strength is associated with the continuing economic importance and outstanding performance of its industry. Germany is one of the leading nations in many cutting-edge technologies. This includes biotechnology, nanotechnology and information technology. Many German companies are among the world market leaders in mechanical engineering as well as in the electrical and automotive industries. The German environmental technology sector (wind energy, photovoltaic, biomass) also has a strong position on the international stage. Compared to other countries, industry accounts for a bigger GDP share (29 percent, for the US it’s about 22 percent). Also, Germany still has numerous worldwide operating medium-sized industrial companies that contribute greatly to Germany’s economy. In many other countries this sort of companies have all vanished.

Second assumption: It may sound trivial but there are both advantages and disadvantages to the predominant role of an export-oriented economy. On the one hand, this huge importance led to a swift decline of the national product during the economic crisis, which emerged at the end of 2008. Today, however, the German economy is growing again at the same pace.

Third assumption: Germany is not just extraordinarily export-oriented, it is also extraordinarily import-oriented. To be precise, Germany's economy depends on international trade to a higher extent than many other countries. And this goes vice-versa. Let me illustrate this point. Germany does indeed export huge volumes of products and services. But it also imports many goods. Among those, sources of energy such as oil and coal are of the highest importance. In 2008 Germany ranked number one in international exports but also number two in imports - coming in second only to the United States.

The so-called trade-to-GDP-ratio” - which adds imports and exports and puts the sum into relation to a country’s GDP - is quite interesting. Germany’s economy is indexed at 73 percent. Japan and the US are indexed at 29 and 22 percent, respectively.  This shows how interconnected Germany’s economy is within the global economy. This state is irreversible - and it composes a distinguishing mark of the German economic model.

Fourth assumption: A decline in Germany's export activities does not automatically entail an increase in exports in those countries that complained so audibly about Germany's export strength. This is because most products of certain manufactures can’t be replaced by others at short notice. World-market performance of individual companies does indeed depend on macro-economic interrelations, but much less than some figure-focused economists may believe.

Fifth assumption: When I pointed out the importance of an industrial base to German export strength, we should not forget the growing role of services even in export. The trade-to-GDP-ratio of services is slowly but constantly rising. A decade ago it was about 10 percent. In 2008 it reached more than 14 percent.

Sixth assumption: It is Germany's well-trained employees who are the back bone of our country's high-performance economy. While this is also true for some other countries, it is not true for most countries. However, it is vital to all nations to keep an eye on how to provide a sufficient number of skilled employees in the future.

This brings us to the second topic.

As I just mentioned, the success of our economy is based in great measure on the excellent skills of our workers.

It is, however, highly likely that there will soon be shortages of graduates on the labor market, and this may impair economic development. There are already complaints about a shortage of engineers in mechanical engineering and in the IT sector.

But the looming shortage of skilled workers affects the entire range of professional qualification. There might be up to 2 million qualified workers already missing by the end of this decade, forecasts say. This is a result of demographic change. In short: more people retire, less people leave school. To put it somewhat drastically, we are running short of young people.

However, the situation is not hopeless. What we need to do is make sure we use the skills of the entire generations of young workers that follow. Today, this is by far not the case. Nowadays, too many young people leave school either without any sort of secondary school diploma or with not enough skills for them to cope with vocational training. This has always been unacceptable, however today we as a society simply cannot afford this any longer. Changing the situation schools are currently in is not easy. But it is possible.

After all, the German constitution gives the federal states the power as well as the responsibility to determine what goes on in our schools. Globalization does not interfere with that and cannot serve as an excuse for political failure. Thus we urgently need to enhance the quality of our schools and further develop early child care programs. It is a fact that the number of available jobs for employees without professional qualification is constantly decreasing. Companies, for their part, must strengthen their efforts in training young people. As state-run institutions do, who are responsible for education, companies also increasingly need to pay attention to those who are low-performers at the beginning of their vocational training.

At the same time, we must produce more candidates achieving the highest degrees of education. In this regard, we can be thoroughly optimistic. There are more and more people who attain better and better degrees of education. In major cities like Hamburg A-levels (the so-called Abitur which serves as university-entrance diploma) are the most frequently achieved degree of education. We need to make sure we keep focusing on this goal. We must ensure that 40 percent of all one-year age groups in Germany go to university. Among these students there should be as many as possible who aspire to achieving degrees in engineering, maths, science or information technology.

However, especially regarding young engineers, we must abandon a distinctive feature of the German education system: the vast majority of students in our country have attained an education degree from high school - the already mentioned Abitur - which automatically entitles them to enroll in university. I see the necessity to ensure opening the doors of our universities to those who have opted for vocational training after leaving school and who have gathered experience at the workplace. Currently the number of those students is at 1 percent. The goal should be 10 percent. This is common practice in other countries, and if we are to encourage every promising young talent, this is our way to go.

Nevertheless, this will not be sufficient: Despite its considerable domestic potential, Germany also depends on the immigration of specialists. For this reason, opportunities for the immigration of highly-qualified individuals have been expanded and rules for the employment of highly-skilled foreigners simplified. Regrettably, word has not spread enough yet. Germany is currently seeing even veritable Ministers calling for chances that have already been put in place quite some time ago. Today, Germany has one of the most open labor markets for graduates in the world. And many other qualified employees benefit from these innovations not yet sufficiently known.

Virtually all immigration restrictions for EU graduates and their families were abolished in January 2009. For specialists from other countries, only a priority examination by the Employment Agency is required. Anyone opting to work in Germany can now be assured that a career in a German company will not be impeded by bureaucratic hindrances.

All graduates (university or technical college graduates) from EU member states and their family members may work in Germany.

Highly-qualified individuals, in particular specialists and managers with special vocational experience, who are offered a job in Germany where they earn more than approximately € 65,000 p. a. may work without a priority examination. They immediately receive an unlimited settlement permit entitling them to take up employment. Their family members may also take up employment.

Managers and persons with company-specific knowledge, transferred to Germany within a group of companies, and their family members may work.

Anyone having completed their studies in Germany may remain and work here if they take up employment matching the qualification acquired at a higher education institution, and if payment and the other job working conditions offered are not less favorable than those of comparable German employees.

Former students of German schools abroad have had easier access to the German labor market. Now they can not just enroll for higher education, but also for any certified (three-year) in-company training course in a recognized training occupation. If former students of German schools abroad have concluded three years of training in Germany, or have concluded higher education, they may be admitted to any employment in this country matching their vocational skills.

Graduates from countries outside the EU may work following a priority examination by the Employment Agency. The family members of such persons are not required to undergo this examination.

In closing, let me say this: Germany is an open country which welcomes its guests. Sure, I have spoken mainly about economic aspects with regards to people coming here. Sometimes speeches about the economy sound a bit technical. But we must never forget about the people behind the statistics and economic models. It is important that we value the contributions of each and every one who works hard and brings new ideas to the table.

I thank you for your patience and attention. I have tried to keep my remarks brief, in order to give you the opportunity to ask questions and join the discussion.