EU Business German CEOs Get Political

German executives are reluctant to take political stances, but in a world of Brexit and Trump, they are standing up for European integration – and their own trade.
The business ties that bind.

Peter Terium, the chief executive of energy giant Innogy, could be forgiven a little complacency. Business is booming for Innogy and over the last year, the company has successfully completed a complex spin-out and stock market flotation. Mr. Terium just had his own contract renewed until 2021.

But instead of resting on his laurels, he chose to do something unusual for a German CEO – take clear political positions and stand up for them in public. The 60-year-old executive’s hot-button issue is the defense of the European project: he is the main organizer of #We4Europe, a new campaign to support the European Union, which has gained the backing of many top German firms and executives.

The campaign took its first public steps in May, issuing a statement affirming support for  ongoing European unification, based on values of peace, openness, free trade, tolerance and cooperation. As well as Mr. Terium, chief executives of eleven other German corporations—including BMW, Deutsche Bank, Lufthansa, Airbus and Volkswagen—signed the statement, which called on people to “stand up for Europe’s future, for peace, freedom and prosperity.”

Opposing populism requires strong leadership from liberal and democratic elites. Oliver Bäte, chief executive, Allianz

Of course, the companies also have their own businesses in mind when they talk about the EU, a 28-nation bloc ranging from Finland in the north to Portugal in the south and from Ireland on the Atlantic Ocean to Cyprus in the Mediterranean Sea. Britain’s decision last year to leave the group is seen as a risk to its future existence, as more countries could decide to part ways. This may weaken the single market the 28 nations have created over the past six decades and contributed to the region’s economic growth. More than half of Germany’s exports and imports is done with EU countries.

Speaking to Handelsblatt this week, Mr. Terium outlined his reasons for backing the project. “Innogy is a European company. Europe is the foundation of our business, but this base is ever more under attack,” the CEO said. “There is a clear focus on the EU’s negative sides. One has to give a counterview. We view the prosperity enabled by the EU as too self-evident.”

The Dutch-born CEO made his own commitment to the European Union clear, condemning “those attacking Europe… thus threatening our welfare, our freedom and our open societies.” The Brexit referendum, he said, had been a turning point for him personally, a wake-up call: he wanted to use his position to defend the historic achievements of post-war Europe against “enemies” determined to do them down.

Such a clear, combative position is highly unusual for a German chief executive. For decades, the German business community largely operated behind the scenes, functioning via a close-knit network of institutional connections, sometimes nicknamed “Germany Inc.” Even today, public campaigning by corporations is rare, generally left to powerful industry associations unless an issue impacts a company in a particularly direct way.

But given the threats and challenges facing Europe, Mr. Terium and other CEOs are beginning to speak out in candidly political terms. According to the Innogy boss, their audience is partly their own staff, but #We4Europe also plans a large public demonstration in Berlin. To say the least, this would be an unusual move. Marches in the streets of the German capital are more usually organized by the country’s powerful trade unions.

#We4Europe is just one sign of German business increasingly taking public political positions. This has been prompted by recent blows to the liberal world order, with Brexit shaking the architecture of the European Union, and the election of Donald Trump setting off a new wave of protectionism.

When Angela Merkel visited Washington in March, she was accompanied by the chief executives of Siemens and BMW, keen to build relations with Mr. Trump while also encouraging supporters of free trade in the American capital. Joe Kaeser, Siemens CEO, has at times acted almost as a special envoy to the US administration. When Ivanka Trump visited Berlin, he personally guided her around a Siemens training facility.

More striking than CEO diplomacy, however, is a new willingness to speak out. Since the Brexit vote and Mr. Trump’s election, a number of senior executives have warned of the effects of populism, calling for a defense of free trade and European integration. Shortly after last year’s American election, Oliver Bäte, CEO of insurance giant Allianz, told Handelsblatt that “Opposing populism requires strong leadership from liberal and democratic elites.” In an op-ed for Handelsblatt shortly after, Mr. Kaeser warned that “Populism, nationalism and protectionism narrow viewpoints, promote intolerance and hinder global trade and cooperation.”

Companies and executives do not have political responsibility, but they do have social responsibility. Peter Terium, chief executive, Innogy

This was followed in May by the B20 gathering, associated with Germany’s presidency of the G20. The event drew 2,500 representatives of business, politics and science in a Berlin concert hall, in a two-day show of support for globalization, free trade and climate protection.

The main sponsors of B20 included Allianz, Deutsche Bank, Bayer, Siemens, BASF and L’Oréal. It was organized by the three largest German business organizations – the BDI, a group of associations covering some 100,000 companies, the Association of German Chambers of Commerce and Industry, or DIHK, and the Confederation of German Employers' Associations, or BDA.

Industry groups also backed Angela Merkel after a high-profile speech last month, in which she claimed Europe could no longer rely on America as a strategic partner. At that time, the president of the BDI, Dieter Kempf, accused the United States of marginalizing itself, while Mr. Terium called for a “united, strong Europe” that can “shape the future on an equal footing with our transatlantic partners.”

German business leaders’ anxiety at threats to free trade and economic integration goes back further than 2016. They were taken aback by vigorous popular opposition to the Transatlantic Trade and Investment Partnership, or TTIP, a proposed trade deal between the United States and the European Union. Business groups repeatedly made public appeals to politicians to do a better job of selling free trade to a skeptical German public. In one of his first actions as president, Mr. Trump suspended the U.S.–European trade talks.

 

Jürgen Flauger covers the energy market for Handelsblatt. Klaus Stratmann covers energy policy and politics for Handelsblatt in Berlin. Brían Hanrahan is an editor with Handelsblatt Global. Gilbert Kreijger an editor with Handelsblatt Global, contributed to this article. To contact the authors: [email protected], [email protected]