Germany - Australia's gateway to Europe

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It will be 25 years this month since the fall of the Berlin Wall. While millions of people are commemorating this momentous occasion, it’s also an excellent opportunity to reflect upon the opportunities Germany offers Australian companies and Australia generally.

Just as the fall of the Wall reunited East and West Berlin, the digital age has broken down the distance barriers between Australia and Europe, making it relatively easy for Australian companies to operate in Germany.

When Australians think of doing business in Europe, many naturally think of the United Kingdom. But Germany should not be ignored. As the fourth-largest economy in the world and Europe’s largest economy, Germany offers enormous scope for Australian companies doing business in Europe.

TRADE RELATIONS BETWEEN AUSTRALIA AND GERMANY

German immigration to Australia dates back to the mid-19th century, and Germany and Australia’s cultural and trading relationship has flourished ever since. Australian companies that have had operations in Germany for some time include Brambles, Sonic Healthcare and Hochtief, just to name a few.

The two countries marked the 60th anniversary of Australian-German bilateral relations in 2012 by signing a Strategic Partnership to further strengthen ties. Under the Partnership, the two countries have committed to facilitating connections between German business and Australian business, particularly in the areas of climate, renewable energy and resources.

Significantly, Germany’s Chancellor, Angela Merkel, is scheduled to attend the G20 Leader’s Summit in Brisbane on 15-16 November 2014 as a guest of the Australian government. This is the first such visit since 1997.

WHY SHOULD AUSTRALIAn COMPANIES CONSIDER DOING BUSINESS IN GERMANY?

Germany has the largest economy in Europe

Germany’s GDP is 22% of the entire Eurozone’s GDP. It is one of the world’s largest exporters, with approximately AUD$1.46 trillion worth of exports each year and a current account balance of around US$215 billion. It is Australia’s tenth largest trading partner. Further, around two-thirds of the world’s key international trade fairs are held in Germany.

Shared interest in key industries

Underpinning Germany’s strong economy is a history of investing in priority industries. Many of its key industries are also priorities for Australia, which makes the two countries natural trading and economic partners.

There are already over 300 partnerships and co-operation agreements between Australian and German universities. There is also great potential for co-operation in the supply of Australian raw materials to Germany and German investment in Australia‘s resources and biotechnology sectors.

Germany’s key industries include:

Information and communications technology - Germany's ICT industry is Europe’s largest and it was one of the reasons the German economy weathered the global financial crisis as well as it did.

Renewable energy and environment technology - Germany is a global leader in renewable energy and environmental technology and is home to:

  • The world’s largest photovoltaic market;
  • Europe’s largest solar thermal market; and
  • Europe’s largest wind energy market and one of the largest wind industries worldwide.

Medical technology - Germany is Europe's leading location for medical technology and the second largest medical technology producer and medical services provider worldwide.

Germany is the gateway to Europe

Germany shares borders with every major economy in central Europe and provides access to both established markets in western Europe and emerging markets in central and eastern Europe. Germany's exceptional infrastructure is set up to transport both passengers and goods quickly and efficiently by air, land or sea. 

Further, given the Single European Market of the Eurozone, goods, services, persons and capital can move freely within this market. As a result, imported goods sold in Germany are exempt from customs duties and procedures if the goods originated in a member state of the European Union or the goods were previously imported into another member state of the European Union before moving on to Germany.

With a number of shared priorities and many Australian companies already having successful operations in Germany, there is a great deal of scope to further strengthen existing relationships and build new alliances.  

Germany is about much more than bratwurst and beer: its economic might and open market offer Australian companies excellent opportunities to thrive in the European market.


Haley Aprile is a Senior Associate currently seconded to one of Germany’s leading law firms, Hengeler Mueller as a Foreign Lawyer. More information on Hengeler Mueller is available from its website.




The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


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