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German-Italian Economic Relations

‘The objective is to enhance cooperation in digital and ecological transformation’

Bologna, 27 October 2023
Italy and Germany, both founding members of the European Union, share a close economic exchange. To further strengthen this partnership, the mechanical and plant engineering sector backs the action plan that will be signed by the two governments during autumn. This partnership aims to promote even closer cooperation in economic development. “Enhanced collaboration between Italy and Germany, particularly in the realms of digital and ecological revolution, would be pivotal in propelling Europe forward. Mr Karl Haeusgen, President of VDMA, expressed that a joint strategy should be formulated and executed by Berlin and Rome in conjunction with societal and economic organisations during a press conference in Bologna, marking the inauguration of VDMA’s recently opened Italian office.”

Export growth in both directions
Small and medium-sized enterprises dominate machinery and plant production, which is of significant importance in the economic development of both countries. As a result, trade is closely intertwined. From January to August this year, Germany exported machinery and equipment worth a total of £6.7 billion to Italy, indicating a nearly 6% rise in comparison to the previous year. In the same period, German customers imported machinery and equipment worth just under £5.6 billion from Italy, representing an increase of 7%. Italy is now the second-largest supplier of machinery to German consumers, after China. All other relevant figures confirm the strong economic ties between the two countries. Cooperation with Italy should be a top priority for answering how the EU can position itself more firmly in international competition, according to the VDMA President. German direct investments in Italy reached approximately EUR 40 billion in 2022, while Italian companies invested about EUR 35 billion in the Federal Republic. Around 1,800 German firms with roughly 200,000 staff operate in Italy, comprising roughly 500 firms in the mechanical and plant engineering industry. These firms collectively offer almost 70,000 employment opportunities.

Red tape and supply chain problems
The challenges facing businesses in both countries are similar. “On both sides of the Alps, companies are struggling with excessive bureaucracy and supply chain problems. And they all face the challenge of managing digital and environmental change,” says Haeusgen. It is not enough to invest in the energy efficiency of one’s own products, he warned, “we must also increasingly address issues such as the circular economy or the expansion of renewable energies”.

In this context, Haeusgen praised the very stable economic relationship between the two countries. “However, it would now be important to coordinate the measures of our two countries and to provide for an intergovernmental dialogue also on economic issues, starting with the action plan that will be formalised in the coming months,” the VDMA President concluded.

Karl Haeusgen

The VDMA opens an office in Bologna
From 1st May this year, VDMA has established an office in Italy. Dr. Raffaele Talarico will be heading the VDMA Italy, located in Castel Maggiore (BO). Talarico states that the intention is to act as the local contact for more Italian VDMA members and German members’ Italian branches. This implies that they will be focusing on specific services and topics while also serving as an interface for VDMA’s complete service portfolio as a European association. The VDMA’s Bologna office is the fifth European branch, following those in Brussels, Vienna, Maastricht, and Warsaw.

Dr. Raffaele Talarico

The VDMA represents 3,600 mechanical and plant engineering companies from Germany and across Europe. The sector prioritises innovation, export orientation, and medium-sized companies. These firms employ more than 3 million people in the EU-27, with over 1.2 million of those jobs located in Germany. As a result, the mechanical and plant engineering industry has become the top employer among capital goods industries in both the EU-27 and Germany. In the European Union, it is estimated to have a turnover volume of EUR 860 billion with approximately 80% of machinery sales originating from domestic production plants.

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Kontakt Telefon E-Mail Datum
Holger Paul
+49 69 66 03-1922 holger.paul@vdma.org