“It’s the economy, stupid” – this was the motto used by Bill Clinton in his first successful presidential election campaign back in 1992. The recognition that the situation of an economy is determinant for people’s prosperity and quality of life is today more topical than ever. More than ever, it can be seen that the regulatory framework for an economy, but also transparency particularly for internationally oriented financial markets, is decisive for the ability of markets to function and to adapt. In this regard, incomprehensible laws and rules are just as much of a hindrance as opaque financial products, whose risks nobody can fail to see. But it is also important to have a government that acts with resolve Financial markets and the associated international capital linkages help to increase prosperity, in the same way as increasing exchanges of goods and services in the real economy. But interconnected economies cannot decouple as a reaction to macroeconomic disturbances and market excesses. It is all the more important to have a competitive regulatory framework which is reliable as well as flexible, and which focuses on individual responsibility and creates the room business urgently needs for investments in jobs, education and machinery. This is because economic development and the performance of a country depends not only on hard work and creativity of employees, entrepreneurs and scientists. Just as important is also that economic policy ensures transparent, open markets and keeps them functioning. Competitive companies as well as innovative products and services form the essential basis for prosperity and employment in our resource-poor country.
It is therefore of not inconsiderable importance how and using which instruments the legislator intervenes in and regulates markets – be they goods markets or factor markets. Above all, minimum prices along with minimum wages are the wrong route – just like high taxes and social insurance contributions, they have a negative effect on growth, economic dynamism as well as developments in employment and incomes. Since Germany is part of a globalised economy, economic policy measures are also subject to competition. This international competition also calls for a willingness to innovate in policy-making. Germany must grasp the opportunities of globalisation in order to maintain and increase its prosperity. This continues to be a decisive task of workers, employers and policy-makers.