unproductive uncompetitive and bureau crossteck, germany, once the beacon of fiscal stability has full and behind economically to talk about the policies needed to turn things arise. i'm joined by came in 1st. he's head of the for research institute, and according to a recent ranking, jeremy's most influential economist for us are fullest. welcome along, i want to begin today by looking at german industry. when you see a 9 months of top cuts the likes of fog 5 or boss, or b, a ss, isn't your instinct to say, okay, this is very unfortunate, but these are just market forces. let's trust them to do their thing. or do you think right now is really the time for the government to intervene to save these jobs? i think it's both actually. it's true that the car industry is in transition to us as we all know towards the electric vehicles. and that 1000000000, i'm afraid that the fewer value added will take place in germany and europe simply because batteries of produce more easily in imagining

economies not so much in highly developed economies. so market forces imply that will have to be some adjustment market false outs imply that will have to be on the adjustment in energy intensive sectors like the chemical industry. at the same time, we do have a decline in investment in germany, which is across the board rating, not trusting these sectors. and that doesn't mean the government has to look into over regulation, bureaucratic burden, a high tax rates in germany. so we do need a political agenda to make to how many more attract attractive for investments spot at the same time we shouldn't forget, companies need to adjust to market forces as well in concrete terms. so what should the german government do in this particular case, it's folks locking foss via ss a in these cases, i'm afraid all the government can do is say, okay, these companies need to adjust regarding the energy intensive industries of cause.

the down government does need to think about the way it runs energy policy. there's a lot of uncertainty driving the policy was a very narrow energy policy, focusing exclusively on renewable energy is routing out nuclear. it's probably time to re think that strategy because other countries do this differently bought in particular regarding the car industry. i think what the government can do is limited. it's not nothing. for instance, if we think about charging stations for vehicles the uh, grids. uh so we need the more. busy paul, for the grids, because otherwise we won't even be able to have charging stations everywhere. so the infrastructure side is something the government should look into to. okay, so better infrastructure on one side, but if we look at this strategically, isn't worth pumping more and more investment into say, the car sector, or is there an argument to made 1st thing, okay. well,

the era of germany being synonymous with cars is over. that's find something new to focus on. that's find a nice where we can really lead to god. absolutely. dominey will continue to be a place for the production of cause, but this will not be the false driving economic growth that has to come from somewhere else. fortunately, drum need does still have a lot of lots of number of very productive companies that this whole cold, hidden champions, companies uprising successfully and marketing nations in very different sectors of i think the challenge is not so much defining which sectors will be successful in the future that goes wrong if politicians do it about creating better conditions overall for economic development, and that includes a invest into the education system, invest into infrastructure, invest into research and development. and indeed we do need. busy new companies, there is a lack in germany, as well as the europe as a whole of nearly develop and companies of stop companies that are really

successful. so we need to look into the conditions for these new the creative companies. we like can be of the markets for, for capital, for these companies, bang, so i'm not very good at financing new companies. we need a better a text conditions. we need a different type of label. it needs to be more flexible to accommodate these new companies. so stopped ops, new companies can create dynamism and europe and dominate needs to embrace that. or let's look at europe and terminate together. then i'm specifically germany's role within the european union and the extent to which this is affecting economic performance. if we look at tariffs on that, chinese eaves, for example, this is something germany opposed, but was ultimately i voted on how do you view this tension between national goals and european cohesion? well, i think that a very different view as in europe, for instance,

about free trades around law protection is countries, germany because of its national economic interest, has been mall pro free trade. and i think germany should continue to try and convince the partners in europe that free trade is really what we need, we need, except for free trade externally. and that costs or a free trade agreements with, with less than about can countries are very important. and should be signed, but also with in europe, in the last 5 years. uh, the, the, your opinions, the you has neglected. what i think is it's great as the assets and that's the internal market. we have a need for studies showing that removing obstacles to trade within europe in services could increase value added by more than $300000000000.00 euros per year. so we do have a growth machine that does not dependent on either china, all the us, which is the repeat internal market, but we should use it's rather than producing video rock receive and regulation,

which we've done in the last 5 years. how do you get rid of this regulation? what is it in particular that is, is holding back the success of this internal market? or i think it's a fundamentally wrong approach to the us taking the last 5 years. and that's the idea that we need to regulate the economy so that it becomes more sustainable and regulated in every detail that has gone wrong. mario, rocky, and his report on competitiveness has pointed out that the e u. a has issued 13000 acts of legislation in the last 5 years. this is much smaller than any other country. and it is simply too much. nobody can follow this legislation. it needs to complete over regulation. and we need to get rid of that, the tech, some of me on sustainable finance is a planned economy approach, which is totally misguided. the history reporting,

the so called energy efficiency regulation, which is basically a limitation of energy use is totally misguided because many of the sectors of the future, for instance, artificial intelligence do need a lot of energy. it doesn't distinguish between green and other types of energy. so a lot of policy arrows have been made in the u. i'm afraid these, i want to be corrected if we really abolish this legislation and replace it by more appropriate approaches. you mentioned that germany has a favorable approach to the free market and it sounds like you're saying that the e u is becoming increasingly centrally planned. does this mean that the solution is more or less of the because this internal market requires an excess of cooperation? uh uh, i think we need, uh, not more or less you, but the right type of you, i think the, you does have some approaches to, for instance,

the environmental policy to find a plan of policy which are very effective. uh like c o 2 pricing. the, the, the, the plan is out there now to extend the c o $2.00 pricing to the building sector, and traffic. that's exactly right. what we need to get rid of is this over regulation. and this plan, the economy approach, like in the uh, techs on me for instance, defining sectors that are supposed to be sustainable and other sectors that i'm not supposed to be sustainable. that's for instance, has left to us defining the defense sector as unsustainable. and that now how it's becky or ability to, to defend itself. so it's a totally misguided approach to try and define politically which sectors are sustainable in which i'm not, it's really nonsense and we should get rid of that as quickly as possible. if not, we are getting all sides into problems. when you say sustainable, are you talking about sustainable on an environmental level or on the financial level? well it's, it's not me, it's the,

you're calling the sustainable. and i think they don't know themselves what they are really talking about of cause the idea is mostly about the environmental sustainability of call sustainability. it has the social and government side. but because this approach is so wrong, my understanding is that the youth has given up on define making the same definitions for governance and social. so it has failed in the environmental area and stopped extending this. thank god to social and governance. you've mentioned that germany needs to invest in education on infrastructure, but you are among those who don't think it should listen. it's rules on limiting that. what is your reason for that? especially when you consider that the debt to g d p ratio in the us, for example, is almost twice as high. yes, correct. but the us is a, an economy growing much small, quickly with a different demographic structure is that's why you know,

does need. and germany does need lower levels of that. it is important not to confound that with investments. so if we just relax the deck that break what we, we'll get is more consumption, not necessarily more investment. so i think we should stop by understanding that for certain types of investment, for instance, replacing all crumbling infrastructure, we need to change the structure of public spending. we cannot do this on the basis of that. if we think about education, we cannot use only debt financing to finances education because in the long term and that there's so many people that retiring. so we are losing human capital and we are only replacing those by investing on education. and that has to be done out of current government revenues i, i wouldn't rule out that financing, for instance, for higher military spending. but i think we should start, we should 1st restructure public spending because issuing that is very easy. that's

why politicians like it restructuring public spending is much small fraud with the conflict. it's small, difficult, uh, structural reforms. but i need a more difficult and we shouldn't let politicians get away with just issuing that. as i said, that's very easy, but that's not, not the main thing we need that's returned to the question of demographics that this is a problem that's been brewing for a long time. there simply aren't enough workers here. the government has tried to address those with immigration reform. is there any indication these policies are having an effect? there is some of the migration that has been acquired. uh, quite a lot of immigration in germany in the last. lets say decade and that has helped the labor market. it's not just been immigration of refugees, it's been immigration into the labor market that has health and will help dominant europe in the future. however, for instance, for germany, some of that immigration came from south on a south east european countries. and these countries have lost

a lot of labor falls and this immigration to germany is not going to continue. so it is going to be more difficult to become all difficult to attract people and that means yes, immigration has to continue, but we should also try and make more of the domestic labor force. and this is about making sure that it is, was supplying labor that the incentives are right to walk. we need to look into our education system. we need to make sure that people don't get tied to early a. so there is a lot that can be done. i want to come back to the retirement question in a minute, but just staying on that immigration reform, one argument i've heard many times is that germany would be far more attractive to talent. is more companies adopted english as a working language? do you agree with that? i totally agree. i think a lot of companies have adopted it more or less still it a, i mean the,

there are still people who don't speak english and it's not always easy to do that . but to being more open generally in companies, but also in the public administration. establishing more of a way to come culture, simplifying bureaucratic procedures. these are all things that are very important to make this a place which is attractive for immigrants. you said you want to make sure the germans don't retired to early. one is too early, in your opinion, a we don't really have a system that moves towards a retirement age of $67.00. and if that is the effective retirement age can be, it's at $64.00, that would be progress. this will take some time, what we probably need is not the same retirement age across the board. we need more flexibility. but overall we should avoid incentives to retire early ends

and some legislation was introduced into pos, for instance, from the.