The European Union is vital to Germany’s economy. More than half of Germany’s exports are destined for EU member states. As European economies are closely integrated, dynamic growth in EU countries benefits Germany’s economy as well.
Exports to EU member states create value and secure jobs
Exports to other EU member states generate an annual value added of around 550 billion euros in Germany, accounting for 16 percent of total value added and the EU’s importance keeps growing. Ten years ago, the EU accounted for just 13 percent of total value added. Trade with neighboring countries matters most. France, the Netherlands and Poland are Germany’s most important export markets in the EU. In total, 7.2 million German jobs exist because of exports to other EU member states.
Germany benefits from dynamic growth in the EU
Given these close trade ties, Germany gains greatly when other EU countries prosper and suffers the effects of their economies stagnating. If the economies of all EU member states stopped growing, Germany’s gross domestic product would be 23 billion euros lower by 2030 than if EU economies grew moderately. The effect would be somewhat smaller if the U.S. economy stagnated; if China’s economy stagnated, German GDP would decrease by 15 billion euros in the same timespan.
Germany benefits from the Schengen Area
The study highlights the positive effects of the open borders within the Schengen Area ensuring efficient supply chains and facilitating trade, tourism and cross-border commuting. Reintroducing border controls would cost Germany between 1.5 to 2 billion euros in economic welfare per year. Border controls would result in long wait times at borders, make trade in goods more expensive, compromise tourism, and impede European labor mobility.
