Tuesday, 29 September 2015

RISE OF GERMAN ECONOMY: VOLKSWAGEN AND AUTO INDUSTRY

Even after bearing the brunt of two World Wars, with German economy even collapsing after the paying of the first installment of First World War’s reparations to France, for instance, Germany has shown a remarkable capacity of rebuilding itself in the current era. The most visible signs of her economic power are the three big carmakers namely, Volkswagen, Daimler and BMW.
The rise of Germany is based on complex casualty, but the recent revelation of the Volkswagen scandal becomes important in many respects: firstly, it highlights the interplay of economic and political factors in the growing prowess of a country, secondly, the role of auto industry in German politics by defining political preferences and outcomes. 
The scandal relates to rigging of diesel emissions tests. There are two view points to this development. First, that the German politicians were not aware of any such violations. Secondly, the view of those who criticize Berlin for shielding the carmakers.
The industry employs over 750,000 of people in Germany and has become a leading economic sector. This makes it important for the government to pay attention to this sector. In this context, some facts are noteworthy: It has been said that Merkel’s party received donations from the family that controls BMW. There is also a powerful lobby group of automakers called Verband der Automobilindustrie (VDA).
This clear closeness between the auto industry and German politics has both positive and negative effects on Germany as well as the world. The positive ones relate to how the collaboration between the two have led to the growing German prowess, and the negative one relating to residue left behind by a state in pursuit of power. It would be unfair on part of a strong state (i.e., Germany) because on one hand, we are talking about cutting down emissions, holding climate change summits, and putting restrictions on the “emerging markets” and on the other, not amounting to fairness by violating emission targets or in other words, failing to regulate such practices.
Why Germany should be concerned is because she is seeking a greater weight for permanent membership at the UNSC, and not to forget that Germany has taken positive steps by giving refuge to migrants in the current refugee crisis facing the EU. 
Therefore, it is important for Germany to clear the dust on the Volkswagen scandal and showcase its global leadership yet again. 

Kritika Kaushik

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