elections. sure, marine le pen, the front woman of the far right in france, did not become the french president, and geert wilders, her counterpart in the netherlands, did not become part of the dutch government. so yes, there is reason to be a little less pessimistic. however, two weeks ago, the german general election showed us that politics has not yet laid the groundwork for optimism, as a populist party came in third. i will come to that in a moment. in my eyes, though, the positive outcome is one of government stability : chancellor merkel ’ s conservative union gained the majority again. but she faces the difficult task of forming a coalition, as only two options are possible. the first, which is to continue her current grand coalition with the social democratic spd, has little chance of success as the spd wants to go into opposition. second, she could form what has been dubbed the jamaica coalition with the liberal free democratic party and the green party. while all parties are willing to enter into negotiations, it will be challenging – finding common ground, will take creative political agendasetting and political diplomacy. but i am confident that an agreement can be reached. thus, i am confident that the stability of the german political landscape will remain intact. and with that the strong growth momentum of the german economy will also remain intact, which, in turn, will be a strong basis for continued growth of the euro area economy. yet this election reveals a deeper, inconvenient truth – that we are far from having found sustainable solutions to the root causes of populist success. this is mirrored in the first far - right party entering the bundestag since 1949 : alternative for germany, or afd for short. it is now the third - biggest party in the bundestag, with almost 13 % of voters supporting it. 2 / 7 bis central bankers'speeches its supporters can be divided into three buckets : first, an established fringe group of far - right voters ; second, a group frustrated with how the government handled the refugee crisis and their integration ; and third, a group of economically disappointed people. about half of the party ’ s voters are economically disappointed. this is the economic side of why protectionism and populism still enjoy strong support. the afd, like many other populist parties, pins the blame for economic malaise on globalisation and european integration – and demand that they be reversed.

a slight nudge or slow it down, if this is required to ensure stable prices in the medium term. in doing so, it only influences the cyclical fluctuations around the existing growth trend. to permanently raise the growth trajectory, the right course has to be set by economic, social and tax policy. in europe, it is first up to the individual governments to make economic structures in their countries competitive. this is an ongoing task that all countries have to face – even germany. on the whole, germany ’ s standing as a business location isn ’ t bad, but i see three areas we need to work on : education, corporate taxation, and infrastructure. germany ’ s good infrastructure is regularly attested to, but it does have specific weaknesses. we do need to catch up on providing high - speed internet access, in particular. the expansion of the fibre optic network is making only slow progress. we definitely need to pick up the pace here. when deciding where to set up base, enterprises don ’ t just look at the quality of the infrastructure ; the tax burden is also an important factor. the reforms in the united states have recently added impetus to the discussion of corporate taxation. other countries, such as france, have since initiated tax cuts. when it comes to taxes on corporations, germany is edging its way 4 / 10 bis central bankers'speeches to the top of the international league table. slightly above average tax rates may be defensible in germany, but if the difference becomes too great, our attractiveness as a business location will suffer. that ’ s why i believe corporate taxes should also be given due regard. companies could be granted targeted relief for research and development, for example. this could set incentives for innovation and bolster competitiveness. here in this region, i don ’ t need to explain to you what innovative power is. mannheim is traditionally considered a city of inventors. karl drais built the first bicycle here, werner von siemens presented the first electric elevator in mannheim, and the first automobile built by carl benz took its maiden drive on the streets of this city. at first, carl benz only ventured onto the roads at night. and during the day, too, he worked on the vehicle in secret, afraid that someone might preempt him. he only unveiled his invention to the public once he had the patent for it. this shows that technological advances do not simply fall like manna from heaven. they are only made when researchers and developers have an incentive to