Ladies and Gentlemen,
A very cordial welcome to you all here in Munich!
Munich, in fact, is not just a very beautiful and attractive city with
many sightseeing attractions that provide an excellent setting for international
conferences, but it's also one of the most successful economic regions
And this fact is reconfirmed to us by international studies and the
ranking of top-cities.
But of course, Munich has also felt the weak economic development.
Unemployment is up, many companies are planning a further cut-back in
jobs and, for the first time in many, many years, there are vacancies
in office buildings.
I insist on mentioning these alarm signals which should not be swept
under the carpet.
Nevertheless, Munich's economic situation is quite good, in comparison
with other German or European cities. Even last year. Munich's average
annual unemployment figures were the lowest of all German cities: 6 per
cent. At times we were beaten by the City of Stuttgart, it is true. But
no other region is rated for better growth potential in the years ahead.
And there are a number of reasons for this:
- Munich has a sound mix, the so-called Munich mix, involving
various branches of industry. Its not just the IT sector which is particularly
strong here, it's also the media, economy, financial services and lately
- Munich also shows a sound mix of different sizes of firms and companies.
The global groups of Siemens and BMW are headquartered here, and we
still have a backlog of producing industries, but we are also strong
in tourism and the manufacturing trade.
As far as international visitors are concerned, Munich is even ahead
of Berlin. Every seventh workplace and even every fifth training place
falls to the manufacturing trade. In contrast to certain global players,
the manufacturing trade tends to stick to the location, which is an
important stability factor for the job market. Thanks to its universities,
colleges, municipal vocational schools and public research institutions,
Munich has an enormous potential of excellent and highly qualified labour.
This is playing a big role when it comes to locational decisions taken
by high-tech enterprises.
- Finally, I would like to mention the factor of social stability,
and the high quality of living as a locational asset. The positive social
climate has a lot to do with the social activities of our city. And
the high quality of living is partly due to the proximity of mountains,
lakes and forests, and in part even to the enormous variety of cultural
and recreational attractions.
- Over the last decade, Munich's position was greatly strengthened
again as a result of enormous capital investments by the city and state
in the construction of a large-scale airport at the doorstep of the
city, as well as a new trade-fair centre which ranks among the most
advanced facilities in the world.
However, inspite of these assets, Munich is also facing big challenges:
- As a result of the globalization of the economy we are getting a tighter
competition between the cities. On the one hand, Munich is benefiting
from concentration processes, especially in future-oriented sectors
which are all represented well here. On the other hand, Munich is also
under threat by completely new competitors in the finance and IT sector,
by locations with highly qualified staff also, but with lower costs,
ranging from wages to taxation. This means that we have to take great
efforts, inspite of our leading position in Germany, to attract and
keep businesses and by no means to discourage them.
- The further development of the information society is connected with
higher demands being made on the cities and even their residents. To
promote a knowledge-based municipal economy is considered to be a key
element in this respect. Life-long learning is of outstanding importance
here, just as a higher degree of interdisciplinary cooperation, new
forms of knowledge dissemination and the promotion of networks.
- The European process of unification is also connected with a liberalization
of formerly sovereign monopoly markets. This means a threat to the institutions
providing municipal services. Liberalization has already occured in
the field of electricity generation. Our city works have done extremely
well in keeping up with big private competitors, not without undergoing
painful reforms, however. At present there are negotiations about public
transport. And we are seeing new steps being taken towards the privatization
of municipal water supply. Munich fights, like other cities in Europe
do, to retain the right to organize its public transport in the city.
This model has worked well over a century and is also expected by the
citizenry. Looking at the privatization of British railways, it seems
to be a disaster so far. In addition, we find that new monopolies are
often created after privatization, namely regional monopolies which
are in private hand and without public control. In such a case, the
city hall would be reduced to an office handling complaints for the
mistakes and failures committed by private contractors, without having
control over the quality of its public services. Let me be very clear
about it: This is what we don't want to happen.
Well, we are quite serious, when incomes to water supply in Bavaria,
and that beyond all differences between political parties. We have the
highest quality of water, at reasonable prices, and we want to keep
water management in the hands of the city.
It should not be allowed to become a trading commodity for big industrial
players. The same applies to municipal hospitals and other services
we are trying to stay in control of. The cities must be able to guarantee
the supply of the population and maintain the quality of living for
which we need suitable instruments. However, if a city wants to open
up to privatization it it free to do so. But, if a city wants to stay
in control of its services, this should also be possible in a liberally-minded
- Munich, too is facing severe financial difficulties, of course. The
financial plight of the cities presents also a problem to the economy
because two third of public investments are made by the municipalities.
If the cities are to provide sufficient infrastructure for the economy,
and if the economy expects to get contracts from the cities, it should
also stand in to create a basis for sufficient financial supply of the
cities. A prospering Europe depends on the cities as engines of economic
and social development.
In my capacity as Mayor of Munich, and being the only municipal representiative
at your conference, I wanted to point out this aspect in all clarity.
For your convention I wish you every success and would kindly ask you
not to forget the cities when dealing with European future issues, as
more than 80 per cent of the people of the European Union are living in
cities. And the cities are the future workshops for social, cultural,
economic and social development.