President's Speech

German President Horst Koehler warned Tuesday, March 24, in his annual speech that the global downturn could shape the entire century.

"The crisis is no backdrop for show fights, but rather a test for democracy as a whole," Koehler.

The president added that politicians could not afford campaigning for an upcoming German parliamentary election in September at the expense of getting the current work of governing done.

"Even in the run-up to a federal parliamentary election there is no suspension of the responsibility of government." he said, in reference to recent infighting within the coalition government.

The president, whose role in Germany is largely ceremonial though it has traditionally been a voice of moral authority capable to shaping political debate, lauded the government's action to stem the economic crisis.

"The direction being pursued is right," he told the audience gathered for the event at a church in Berlin.

Koehler, who is a former managing director of the International Monetary Fund, condemned the unbridled freedom of the financial markets, demanding that "the market needs rules and morals."

"We are now experiencing that the market doesn't correct itself," Koehler said. "It needs a strong state, which sets rules for the market and ensures their enforcement."

His comments supported German Chancellor Angela Merkel's demands for greater financial regulation ahead of a summit of the Group of 20 (G20) leading world economies in London next week.

Climate change a big concern

Koehler's speech also touched on the challenges posed by climate change, and called on German industry to find economic opportunities in environmentally-friendly pursuits.

"Already, (Germans) are the global leaders in environmental economics and environmental technology," Koehler said. "Nearly two million people work in this sector, and that number will be increasing."

He singled out the automotive industry to work to beat the industry association's forecast of having the first zero-emissions vehicles ready for series production in 15 years. "I believe we can be faster than that," the president said.

Koehler, a member of Merkel's Christian Democrats (CDU), is himself standing for re-election to a new five-year presidential term in May. His main challenger to the post is Gesine Schwan of the government's Social Democrat (SPD) coalition partner.

Schwan welcomed the president's comments on the global financial crisis. "It is a statement of opinion that many have long waited for," the presidential candidate told German news agency DPA.