Germans Deaf to U.S. `Nonsense' as Exports Power Growth
Jens Meier, head of the Hamburg Port Authority. Source: Hamburg Port Authority via Bloomberg
Hamburg has the most to lose from trade-surplus reductions
Jochen Eckel/Bloomberg
The Hapag-Lloyd container ship Berlin Express sits docked at the harbor in Hamburg.
The Hapag-Lloyd container ship Berlin Express sits docked at the harbor in Hamburg. Photographer: Jochen Eckel/Bloomberg
Shipping container cranes are seen during sunset at the harbor in Hamburg. Photographer: Jochen Eckel/Bloomberg
Hamburg calls on Chancellor Angela Merkel to reduce the trade surplus. Photographer: Rodger Bosch/AFP/Getty Images
Hamburg, the port city that sends 1 million tons of goods to foreign markets each week, has a reply to those who say Germany’s economy is too reliant on exports.
“Nonsense,” said Frank Horch, the city’s Chamber of Commerce president, in a June 24 interview in the offices of the 345-year-old trade group. “You cannot say Germany has to stop exports, it makes no sense. Germany was born out of this.”
Hamburg, Germany’s largest port and a crossroads in European trade since at least the 13th century, is the city with the most to lose from U.S.-led calls on Chancellor Angela Merkel to reduce the trade surplus in Europe’s biggest economy.
As figures released today showed global demand for German goods surging, Merkel is torn between fostering the export boom and honoring a Group of 20 pledge to bolster domestic growth and rely less on foreign trade. Her Cabinet’s backing yesterday of a $100 billion domestic savings program suggests she’s ignoring calls by President Barack Obama to tackle what some say are German imbalances.
“Germany is very skilled at exporting, and it’s neither possible nor desirable for it to meet U.S. and European calls to curb exports,” said Fredrik Erixon, director of the European Centre for International Political Economy in Brussels. “It’s politically convenient for some leaders and people to keep raising export surpluses, even if they know Germany can’t and won’t do anything about them.”
Hanseatic League
The message resonates in Hamburg, located on the River Elbe between the Baltic and North seas. Germany’s second-biggest city after Berlin traces its trading credentials back to the medieval Hanseatic League, a network of merchants’ guilds from London to Novgorod that dominated northern European trade for 200 years.
Hamburg, with a population of 1.8 million, is the richest of Germany’s 16 states, with a per capita gross domestic product of 48,229 euros ($60,700) last year, almost double Berlin’s and the European Union average, government statistics show. The city also has the country’s biggest red-light district, the Reeperbahn, a boulevard stretching from the port that includes bars where the Beatles played some of their first gigs.
Where merchants once dealt in amber, fish and timber, port operators such as Hamburger Hafen und Logistik AG and Eurogate handled about 40 percent of Germany’s 808 billion-euro export trade of goods in 2009, including machinery from Munich-based Siemens AG and chemicals from BASF SE of Ludwigshafen.
Port Traffic
Hamburg handled about 642,000 containers in March, the latest complete statistics available, or more than 20,000 per day. In 2009, Hamburg handled 7 million containers, known as TEU or twenty-foot equivalent units, the port’s website shows. That compares with just over 5 million TEUs in the Port of Long Beach, California.
Port traffic is picking up, said Axel Gedaschko, Hamburg’s state minister for economy and labor, in a July 5 interview. There has been a turnaround since March from a 28 percent slump last year, with container volume up 16 percent in May from a year earlier, he said.
China, which overtook Germany as the world’s biggest exporter last year, sends more goods through Hamburg than anywhere else in Europe.
An estimated 2.5 million containers will pass through the port traveling to and from China this year, up from 2.27 million TEU in 2009, according to the Hamburg Port Authority. That compares with 566,000 TEU with second-placed Singapore, followed by Russia and Sweden, which with 264,000 TEU was Hamburg’s highest-ranked trading partner in the European Union.
Chinese Consulate
China Cosco Holdings Co., China’s largest container line, has its European headquarters in Hamburg, one of more than 400 Chinese companies with offices in the city. China has a consul general in Hamburg, reflecting the city’s growing links with the world’s most populous nation.
“Some question our successful export model,” Economy Minister Rainer Bruederle said July 1 in a speech to parliament in Berlin. “They say: raise wages drastically, do more to stimulate the economy. That way risks turning Germany’s economic policy into that of Greece, and we refuse to do it.”
Germany came under pressure to do just that last month with calls by Obama and Treasury Secretary Timothy F. Geithner to boost domestic spending. The G-20 Toronto’s summit communique required countries to “reduce reliance on external demand and focus more on domestic sources of growth.”
Exports Surge
The euro’s 12 percent drop against the dollar this year is helping German exporters cement their advantage. Exports jumped more than twice as much as economists forecast in May, rising 9.2 percent from April, when they fell 6.3 percent, the Federal Statistics Office in Wiesbaden said today. Imports meanwhile surged 14.8 percent. Plant and machinery orders soared 61 percent in May from a year earlier, the VDMA machine makers’ association said July 1.
In Hamburg, the influence of centuries of seaborne trade is evident in street names such as San-Francisco-Strasse and Shanghai Allee. The downtown Ernst Brendler store has offered “Marine and Tropical Supplies since 1879.”
Jens Meier, who runs the Hamburg Port Authority from a 19th century redbrick warehouse once used to store coffee and tea, said he’s overseeing as much as 1 billion euros of investment over the next four years to create the “port of the future.” He plans to curb noise and light pollution, make the site more accessible to tourists, and boost efficiency via technology.
‘Port of Future’
“The simple things like carrying bags may not be the future, and the dirty, dusty, noisy business maybe also isn’t the business for this port,” Meier said. “There’s still a huge nucleus of engineers and people producing innovation here.”
Horch at the trade chambers, who is also managing director of Hamburg-based shipyard Blohm & Voss AG, which built Russian billionaire Roman Abramovich’s superyacht Eclipse, sees Hamburg’s advantage in turning its “Hanseatic view and Hanseatic behavior” to today’s globalized world.
“Hamburg is not a residents’ town like Berlin or Munich, Hamburg is a trading town,” Horch said, surrounded by oil portraits of his predecessors and a tapestry presented to mark the trade chambers’ 300th anniversary in 1965. “We build up industry, we build up know how, we bring ideas.”
To contact the reporters on this story: Alan Crawford in Berlin at acrawford6@bloomberg.net; Tony Czuczka in Berlin at aczuczka@bloomberg.net.
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