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Cablegate: Saarland Leader Mueller Lauds Own State As

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS FRANKFURT 005927

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON PINR PREL GM
SUBJECT: Saarland Leader Mueller Lauds Own State as
Blueprint for National Success

REF: FRANKFURT 0462

1. SUMMARY: Saarland Minister-President Peter Mueller
(Christian Democrat-CDU) used the state's June 30 "Empower
Germany" conference to call for greater innovation and cited
his own state's comprehensive economic development strategy
as a model for Germany. Mueller's American-style manifesto
includes greater autonomy for universities and the
development of economic "clusters" within Saarland. It is
the M-P's latest effort to publicize his record of reform in
the leadup to September state elections. END SUMMARY.

2. On June 30, M-P Mueller addressed almost 1000 attendees
(including most of the state cabinet and Social Democrat-SPD
opposition leader Heiko Maas) at the state's "Empower
Germany" conference, Saarland's biggest political event of
the year. His speech centered on the need for innovation in
the German economy. He noted that while Germany is a global
leader in terms of invention (with 19.5% of the world's
patents), too many of its ideas are purchased by foreign
companies and taken overseas. Mueller called for an
economic approach that encouraged new ideas to stay at home.
The M-P pointed to France's practice of creating "national
champions" (such as the recent Sanofi-Aventis merger) as a
possible model for Germany.

3. Mueller asserted that German business suffers from a
sclerotic and risk-averse approach that discourages
innovation. He cited the recent failure of the
Siemens/Daimler toll collection initiative for trucks as an
example, mentioning that the government had spent two
billion euros to fund the unsuccessful project while
ignoring a competitive and more practical proposal by a
Bremen student consortium that would have cost only 1300
euros. The Minister-President called German bureaucracy
ponderous and excessive, noting that it takes twenty-two
days to open a business in Germany as opposed to only seven
days in Great Britain.

4. Mueller called upon German leadership to abolish the
current system of higher education and "start from scratch."
Instead of "elite" universities (reftel), he advocated more
autonomy for universities in selecting their students and
the creation of interdisciplinary research networks to
develop new ideas and share information. Mueller condemned
traditional "stovepipes" at German universities that
compartmentalize research and discourage innovation.

5. Mueller hailed his administration's accomplishments in
promoting innovation and reducing bureaucracy, suggesting
that a victorious CDU in 2006 could use Saarland's success
as a template for national reform. He noted that Saarland
had abolished 70% of the "red tape" governing business in
the state. Mueller lauded Saarland's flexibility in
establishing economic "cluster" regions and research
networks using the state's small size to exploit niche
marketing opportunities like nanotechnology. The M-P
pointed to the EU's designation of Saarland as the number
one nanotech region in Europe as proof of the state's
success. He also observed that Saarland had increased the
number of employees in its IT sector by 40% since 1999
(compared with 0.8% growth nationwide).

6. COMMENT: Mueller's manifesto marked a clear shift
towards more "American-style" economic ideas, stressing
equality of opportunity over equality of result and calling
for a flexible business climate fostering hard work and
innovation. He stated at one point that "the strong are not
here to devour the weak; they are here to encourage the weak
to get stronger." Although some of Saarland's structural
reform began under the previous SPD administration, Mueller
has succeeded in convincing most of the electorate that he
is personally responsible for the state's forward-leaning
approach. He remains the clear favorite in September state
elections. END COMMENT.

BODDE

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