German Chancellor Friedrich Merz used his address at the World Economic Forum in Davos to call for stronger global safeguards for free and fair trade, declaring that Germany intends to take a leading role in this effort. He argued that Europe must become “the counterweight to state-backed unfair trade practices, to raw-material protectionism and to arbitrary tariffs,” stressing that Germany seeks to play a “key role” in shaping this direction. At the same time, he noted that Germany can only guide Europe if it remains economically strong.
Merz said his government is committed to strengthening the German economy through reforms designed to restore competitiveness. “We must first put our own house in order,” he said in the mostly English-language speech. He criticized Germany and Europe for having “squandered enormous growth potential” in recent years by avoiding reforms and excessively restricting entrepreneurial freedoms, insisting that this is now being reversed.
Europe, Merz continued, should position itself as the alliance that enables open markets and new trading opportunities within a shifting global order. “There is no room for isolationism and protectionism on our agenda. We want to engage in strategic relationships around the world,” he said. Although he did not name the United States, Merz issued a clear rejection of punitive tariffs: “Tariffs must once again be replaced by rules, and those rules must be respected by our trading partners.”
To be taken seriously as a global actor, Europe must strengthen its competitiveness, Merz warned. Economic strength and the ability to shape international policy “are two sides of the same coin,” he said, adding that Germany intends to lead by example. “We are doing our homework. We want to make Germany so competitive that it becomes attractive again for companies and investment.”
Merz also outlined reforms aimed at cutting bureaucracy across Europe, arguing that both Germany and the EU have delayed necessary changes for too long. He stressed the need to “substantially reduce bureaucracy,” saying Europe had become “the world champion of overregulation,” a trend he insisted must end.
He highlighted joint proposals developed with Italian Prime Minister Giorgia Meloni, including a “bureaucracy emergency brake” and a modernized EU budget framework centered on competitiveness. Additionally, Merz said that Europe urgently needs a capital markets union to ensure European companies can be financed within the continent. The chancellor emphasized that these steps are essential for Europe to remain a credible economic force and a reliable partner in global trade.
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