Studio Guest – Monika Schnitzer on Outsourcing and Globalization

This week our studio guest is Professor Monika Schnitzer of the Ludwig Maximilians Unversity in Munich. She's be talking about globalisation and its effect on the job market in Germany. DW-TV: We are now joined by Prof. Monika Schnitzer, an economist with Munich's Ludwig-Maximilan-University. Ms. Schnitzer - break this down for us please... where are all these billions disappearing to? And why are global equities continuing to plunge? Monika Schnitzer: Fortunately, the billions are not disappearing. They are used to buy up non-performing credits. Hopefully they will then perform again and the money will be again to the use of the taxpayer. DW-TV: Who would you say is responsible for this mess? Monika Schnitzer: It's the managers, the owners of the companies, and it's the politicians. The managers because they have taken on too much risk, the owners because they have given them the incentive to take on too much risk by giving them money for short-term profits, and it's the politicians who failed to regulate enough. DW-TV: The German government has decided to guarantee savings accounts here - why the drastic move? Monika Schnitzer: This is very important so as to stop people losing trust. Banks and fianncing is all about trust. If people withdraw their money, then we're in trouble. It's important that people keep their money in their savings accounts and then hopefully, the recession won't be as bad. DW-TV: What needs to be done right now to prevent the situation from getting any worse? Monika Schnitzer: The politicians need to get together and coordinate their rescue packages - not to work on a national basis but to coordinate because this is a global crisis, and in global situations it's important to coordinate response. DW-TV: If we are headed for a global recession, will exports be able to help keep businesses alive? Monika Schnitzer: Germany has always been a great exporting country, and it will remain so - so yes, exports will help us. DW-TV: A survey of German businesses showed the factors for setting up shop in a foreign country... the main reason seems to be the new sales markets - the cheaper labor costs play much less of a role than you would have thought. There is a perception that when companies move outside the country...they take jobs with them..is that really the case ?? Monika Schnitzer: Not at all. This moving-outside-of-a-country helps preserve jobs. Because you want to find new customers. So definitely this is going to boost production. And even if it is for cost-saving reasons, it makes you more competitive -- and therefore also preserves jobs. DW-TV: So in the future, will we need to see the entire world as one big market, instead of thinking in individual national terms? Monika Schnitzer: Absolutely, this is definitely where we're heading. It will be even more global, which is why politicians have to work together: moving back to autocracy is not the right direction. DW-TV: Do you think the current financial crisis will change the globalisation process? Monika Schnitzer: It will force us to work together. Which is actually a good development. (Interview: Heather DeLisle)

DW-World | October 7, 2008

Tags:. .used. .national. .money. .bad. .market