World Business Conference Finance and Trade in the 1980s: A Financial Times Conference Frankfurt, 14 February 1979

Abstract

This speech by Schmidt was delivered in Frankfurt at the “World Business Conference” organized by the Financial Times on 14 February 1979 in a changed political and economic context. Both the Camp David peace accord of autumn 1978 between Egypt and Israel, negotiated with the help of President Carter, and the ousting of the regime of the Shah of Iran by the followers of Ayatollah Khomeini triggered a second wave of increases in oil prices. Questions of energy saving and of a structural change in industry through scientific and technical innovation moved to the forefront, as did the closer integration of developing countries into the world economy. Schmidt was therefore free with his criticism of the partially failed agricultural policy of the EC as well as that of other large industrialized countries such as the United States and the Soviet Union. His praise for the German trade unions, represented at the conference by a single delegate, had a certain topical resonance. Given the shrinking possibilities for redistributive state policies he relied even more on the rational behaviour of the trade unions in their wage policies. He also mentioned other veto players such as the Bundesrat (upper house) and the German Federal Bank in order to successfully dampen international expectations directed at the federal government in Bonn.