Christoph Sander, Germany’s recently arrived consul general based in Atlanta, participated in a wide ranging interview Sept. 19 in his office downtown with Margaret Sherman, assistant professor of legal studies at Georgia State University’s Robinson College; Vincent Froemer, a foreign exchange student from Germany studying business at Georgia State, and Phil Bolton, publisher of the Global Atlanta news service.
Mr. Sander covered a number of issues including German investment in the Southeast and cited several examples of German companies that have invested in Georgia including ZF Friedrichshafen AG’s plant for the production of wind turbine gearboxes in Gainesville; Mage Solar USA, the U.S. branch of a German holding company, which develops solar photovoltaic systems for residential as well as commercial buildings in Dublin and RWE Innogy’s biomass pellet factory in Waycross.
He also addressed his country’s policies regarding the future of the euro, Europe’s banking system and provided his personal analysis of the response of Muslim radicals to the defamation of Muhammad both in the press and on Internet videos.
PROF. MARGARET SHERMAN: Welcome to Atlanta, Mr. Sander. Your career has brought you all around the world – Venezuela, Pakistan, India – to name a few. During this time you have been confronted with a variety of different situations and problems. How will your past experience be relevant to your work in Atlanta?
CONSUL GENERAL SANDER: Indeed I have been in diplomatic service for more than 25 years. In general, it takes several decades until a German diplomat becomes head of a post. You gain experience in various settings all across the world. Then, of course, by representing Germany actively in various countries and contexts, you obtain the experience you need to become head of a post.
In India for example, I was head of the consulate, not dealing with the grand political questions, but basically visiting people in jail and supervising the visa department. I think you should know about that part of the business we do as well, not only the politial aspects. I also handled commercial affairs in Venezuela and political work in Pakistan. So I think I have a broad background that enables me to fill the position as consul general for Germany in Atlanta.
Prof. SHERMAN: More and more German companies are establishing a presence in the United States. How will you promote the Atlanta region and the state of Georgia to these companies?
Mr. SANDER: Our goal is to help German companies to sell their goods in the region and also to set up a presence if that is what they desire. This goes both ways, meaning that we also encourage companies from this region to market their products or set up a presence in Germany and enjoy the single market the European Union has to offer. One of the most specific tasks is to sponsor delegations of German companies. It is very important for them to see the market in the area with their own eyes. In that context, we bring the companies in contact with state and city authorities. This experience, the experience of what is possible in this market, is very important.
Secondly, we are working closely together with the German American Chamber of Commerce. These are people who have a lot of experience working with businesses. They are much more focused on day-to-day business affairs. In working with them, we can actually provide a wider insight to the German companies.
The third point I would like to make is that we have a representative of German industry working in the German Embassy in Washington. There is also a business office in New York. We are working with this office as well; it is one more geared for the larger companies, whereas, the representative for the German Federal Ministry of Economics is looking more after the medium-sized companies.
So we have a wide network of experience and offices in the United States. What the consulate in Atlanta does is to coordinate between these various institutions.
Prof. SHERMAN: Germany is one of the world’s global leaders in the area of renewable energy. Do you have any plans and visions for the Southeastern region in this area?
Mr. SANDER: The first thing I realized after coming to Atlanta is that there is a lot more sun than in Germany. So there is obviously great potential in this area. German companies have set up offices and production facilities in the region in both solar energy and wind energy. Both ZF industries and Mage Solar have set up operation facilities in the region. So we already have a presence in the market. Also, the German company RWE is currently looking into bio fuel production in the area.
As a consulate, we have shown our commitment to renewable energy by having an exhibition in the state Capitol in the spring of last year. Both businesses and government came, so we had a great turnout. We also have an initiative with the embassy in Washington called the ‘Transatlantic Climate Bridge’. In the context of this initiative, there will be a conference in Savannah in November and speakers from Germany, Savannah’s sister city Halle in particular, will address the topic of renewable energies and how to possibly work together in this field. Overall, I do see a great potential for renewable energy. Germany has been a pioneer in the field and has shown great commitment in reducing CO2 emissions. Since the research and production cost a lot of money, it is important for companies with experience to market their technologies to other parts of the world.
VINCENT FOERMER: In response to the European debt crisis, the European Central Bank recently announced it will buy an unlimited amount of government bonds from EU countries, if certain conditions are met. Jens Weidmann, president of the German Bundesbank, has been criticizing the bond buyout from the beginning. What is your reaction to the ECB’s decision?
Mr. SANDER: First of all, this is a decision the European Central Bank took under their responsibility. It is monetary politics and this is what they do. Their mandate is to fight inflation, to keep monetary stability, but also, and this is what Chancellor Merkel pointed out specifically, to make monetary markets go. At the moment we can see some imbalance in that field. One example is the difference in interest rates, such as the very low interest rate that Germany is paying versus the very high interest rates that Italy and Spain are paying. The imbalance involves both economic fundamentals and market exaggeration. By putting more money into the system, the ECB intends to reduce some of the imbalances. The German government has welcomed the recent decisions taken by the ECB.
Mr. FOERMER: The European Stability Mechanism is another important program for the future of the Union. On Sept. 12th, the German constitutional court in Karlsruhe ruled that Germany could participate in the ESM. What are the implications of this ruling?
Mr. SANDER: First of all, the most important implication is that we can go ahead. Basically, the court has said that there are no constitutional limits in that sense, so we can move forward. This is an important signal for the markets. The ESM will provide a lot of money for the system that can be used to stabilize markets. In giving that signal, we also provide a framework to the players in the markets, so that they can see there is a commitment to do what it takes to provide stability. When looking at financial markets, confidence and commitment are vital things. To that end, it was a really important decision made by the constitutional court in Karlsruhe.
Yet, there is some fine print to consider. In essence, the decision says that the federal government cannot commit money beyond the limits that are set by the Parliament. This is a fundamental principle of democracy. Usually, governments do not like these kinds of limits set by parliaments, but it is the way the system works. This means that if the government at some point in the future wants to go beyond the 192 billion euros committed by the German Parliament at the moment, they would have to refer back to the Parliament.
So basically, you have a green light, but also a warning in the form of certain limits. As a citizen, I feel quite happy about those limits. To give governments an unlimited right to underwrite guarantees without the consent of the parliament would be a very difficult proposition in a democracy. So in that sense, it is a reinforcement of the democratic principle. We are strengthening the rights of the Parliament in this system. Therefore, it is very important.
Mr. FOERMER: On Sept. 12th, European Commission President Jose Manuel Barroso called for a single ECB regulator for all 6,000 eurozone banks, as a first step toward creation of a federally united Europe. What is Germany’s response to this proposal?
Mr. SANDER: We are a bit cautious on this. The chancellor basically said that we want to move in this direction, but she does not really see us able to set up all details for such a mechanism by January.
Also Finance Minister Schäuble has said that what we really need is supervision for the approximately 25 larger banks in Europe that are considered system players.
If those would fall, they really would bring the whole system down. The commissioner’s proposal would be enforced for all the banks in Europe, which would amount to about 6,000. This makes the mechanism much more complicated. We think that it would take a little more time to develop a mechanism working on such a large scale.
In general, this banking scheme is very important, because there is a lot of distrust in some of the banks in the peripheral countries – and we have seen banks going down in Germany as well at the beginning of the crisis.
So, banks are vital players and when they go the wrong way without supervision, they can give so many bad loans that large banks could really bring down the whole system. Therefore, they need stronger supervision. The difficulty is that a new banking supervisory agency would also need a common bailout mechanism for banks. That, of course, is always something where we come very close to some constitutional limits.
We would have to work on questions like: What kind of guarantee are we giving? Are they limited? And so on. There are a lot of details that have to be worked out. As we discussed earlier, the federal government does not have the right at the moment to give unlimited guarantees because that would then involve Parliament again. Yet, in general we support the European Commission’s move towards stronger banking supervision.
PHIL BOLTON: Is the U.S. banking system, which does have the FDIC and other regulators, a model in terms of integration?
Mr. SANDER: There is one important difference here. You are one country; the European Union consists of 27 different countries and 17 of those have the euro. The United States has one Congress that makes the decisions on taxes or bailouts. In Europe, you have a system where one national parliament could make decisions that, if we had a common bailout fund, would have implications on the taxes or money to be paid from other countries.
Therefore, it is not that easy to compare the two. Yet, we have gone through the process of deregulation in both the U.S. and Europe in the 1990s to a certain extent. The banking crisis from 2007 and 2008 has shown that maybe some of the steps that we took ten or twenty years ago were a little too courageous without the proper checks and balances.
We are now trying to move back a little bit and to strengthen the supervision of the agencies. And this is basically what the commission is trying to do. The crisis has really shown that we need that. How to do that in a system that is not a single nation, but 17, is of course, something new.
What the U.S. did, moving from the confederation to the United States and mutualizing all the debt, is the only instance when this was done. The debt that you mutualized in the 1790s was the one you accumulated during the war against England. So you had a common purpose. This does not apply to Europe. So we have a different base in the system.
Mr. FOERMER: You have worked in Pakistan, so you are familiar with more sensitive posts. What do you think of the recent events in Benghazi and their long-term effect?
Mr. SANDER: I actually was a diplomat in Pakistan in 2005 when the Mohammed cartoons were published in Denmark. The Danish Ambassador and the Consulate basically came over to us and stored their archives with ours and integrated their visa department with us and left the country. A car bomb blew up in front of their embassy a couple of days later. So I have experienced firsthand what can happen. It shows the impact of modern communications technology in a globalized world. An event here can have immediate impact on the other side of the world.
And often, these events are claimed by interest groups and then marketed to the media. These people know there would be a lot of excitement and a lot of emotion coming out of such events. Also, we have seen that some interest groups have used the emotion of the masses, but also we are seeing an important difference in the way of thinking.
We, in Western countries, believe in the freedom of speech. For example, this person has the right to make this video, or this newspaper has the right to publish these cartoons. And we as a government would say that we do not like it and that we advise not doing it, but we do not have the right to stop it. We try to explain to our friends that that is part of the constitution. It does not mean we share that opinion. The differentiation between public policy and personal opinion is very important.
But to people, especially in the Arabian world who have lived under dictatorship for 50 years or so, that differentiation is very difficult to make. In traditional Islam, the connection between the religion and the state is much closer than in Western societies.
I believe that we will be seeing more of these kinds of incidents, where somebody tries to provoke here and some of the interest groups try to use it to their advantage over there.
In Germany, we are looking into the possibility of banning the screening of the video under our criminal law. Our blasphemy law would enable the German government to prevent acts criticizing religion, if they are able to create public unrest. My minister and I think that this law would be applicable. As for the U.S., I do not think this would be possible as the law stands today.
Yet, I do not think that this will prevent events like this from reoccurring. Mr. Fischer, when he was foreign minister a couple of years ago, made a remark after the publishing of the cartoons in Denmark.
He stated that Western societies have to learn again how public sentiment goes in countries that are much more religiously engaged than we are. It is something that we have to learn again. Cartoons and videos like that have much bigger consequences in countries like Pakistan and Libya or Sudan. And it would be wrong for us to throw our constitutions overboard, but we have to approach these topics with care.
Christoph Sander became Germany’s consul general for the Southeast United States on Aug. 13. Mr. Sander comes from Venezuela, where he spent three years as deputy head of mission (second in command to the ambassador) and head of the economic section. He has also held posts in Pakistan, India, Hungary and the city of Chicago, in addition to various appointments at the German foreign office in Berlin.
Margaret Sherman is an assistant professor of legal studies in the Risk Management and Insurance Department at the Robinson College. She has over 13 years domestic and international experience as a corporate attorney, representing primarily technology companies. She served as vice president, associate general counsel and assistant secretary for Per-Se Technologies, Inc. (formerly Medaphis Corporation); and was an associate at Powell, Goldstein, Frazer and Murphy, Corporate and Technology Department.
Vincent Foermer is a foreign exchange student from Germany and a business major at Georgia State University.
Phil Bolton is publisher of the Global Atlanta news service.