German Chancellor: Europe Must Boost its Technological Capabilities | Financial Buzz

German Chancellor: Europe Must Boost its Technological Capabilities

Angela Merkel, the German Chancellor, wants countries that are members of the European Union to boost their technological capabilities and invest more in areas including battery manufacturing for electric cars and cloud computing.

“I believe that chips should be manufactured in the European Union, that Europe should have its own hyperscalers and that it should be possible to produce battery cells,” said Merkel in an interview with the Financial Times on Thursday.

In the past the EU faced tremendous struggles to build leading tech companies. Currently the majority of Germany’s automotive giants, including Daimler (DDAIF) and BMW (BMWYY), have no other choice but providing their new electric vehicles with products from battery producers in South Korea and China. Volkswagen (VLKAF) and Sweden’s Northvolt merged in a partnership to build a battery factory in Germany, however, the production won’t start before late 2023.

Chipmaking is currently dominated by U.S. and Asian companies, due to Europe’s lack of hyperscalers.

Merkel emphasized that the results of her ideas will lead to more competition, which has high potential to increase productivity.

French President Emmanuel Macron favors a European strategy that creates and protects European champions, who are able to compete with international rivals. By stating her belief that the EU as a whole, and not only Germany, should boost its technology capabilities, Merkel might be partnering with Macron. One successful example of a European champion is Airbus (EADSF), which operates across the EU and competes with Boeing (NYSE: BA).

The German Chancellor further called Brexit a “wake up call” for Europe and defended the European Union’s core principles.

Angela Merkel said: “With the U.S. focus on Europe declining, European countries, especially Germany should ramp up efforts to make Europe a more “attractive, innovative, creative, a good place for research and education.”

Regarding the current trade tensions between the U.S. and China, Merkel advised the EU to stop coming “under pressure between America and China,” and therefore avoid involvement in the ongoing U.S.-China trade war.

“In my opinion, complete isolation from China cannot be the answer,” added the Chancellor, indicating that Germany and Europe shouldn’t take the interconnected global supply chains to pieces, only because of the economic competition.

However, Angela Merkel, who is said to step down after her fourth term as Chancellor of Germany, also told the Financial Times that Europe should be confident enough to set global standards regarding data protection around the world, such as the GDPR rules.