Speech of Chancellor Angela Merkel, May 4th 2009

“Make the Social Market Economy a Major Export”

“The social market economy is the answer to the causes of the economic crisis. If all economies would abide by the principles of the social market economy, the crisis could never have arisen in the first place,” said Chancellor Angela Merkel in her address on “Sixty Years of the Federal Republic of Germany and Twenty Years Since the Fall of the Wall” on May 4, 2009.

“The social market economy combines freedom and security, competition and solidarity, creative dynamism and public spirit. The fathers of these principles knew that the free market is an irreplaceable instrument to create prosperity. But it is value-blind. Therefore, the social market economy depends on the state to keep order. The social market economy gave people a framework in which to develop their own abilities and opportunities, to create prosperity for us all with their efforts.

“On the financial markets, the limiting order was lost. Or to put it differently, the actors in the global financial markets did not operate in a social market economic system. The bonds on their freedom were insufficient or did not exist at all. But those who make the freedom of the market an absolute do the market economy no favors: This awareness stood at the start of the social market economy over sixty years ago. The market needs state regulation. A way out of the crisis is only possible if the social market economy is strengthened. It demands its further development. This task can only be achieved internationally. We must create a global regime for the economic and financial systems. That is one of the lessons of this crisis. Only in this way can we provide against the repetition of such a crisis.

“Today, too, we find ourselves in a phase that makes many people uncertain. Now, too, decisive action on the basis of clear values is required. The way the world economy functions is up for debate. And we, the CDU in Germany, have a very clear solution. We want an economic system that rewards achievement, protects the weak, and punishes irresponsibility. This economic system is the social market economy. It is the most humane type of economy. For us, the crisis means the opportunity to share our experience with the world. We want to make the successful model of the social market economy a major export. The social market economy is the answer to the causes of the economic crisis. If all economies would abide by the principles of the social market economy, the crisis could never have arisen in the first place.

“The social market economy combines fairness of achievement with social responsibility. In this way, it is superior to the inhuman state planned economy as well as the risk-obsessed gamblers’ economy, in which irresponsible individuals can destroy tremendous assets. We will come out of the crisis stronger than we entered it if we turn the social market economy into a major export.”