Thursday
(0)With all the understandable attention being focused on the dreadful situation in the lands skirting the Indian Ocean, there is always a danger that disasters of a different, more Man-made kind, get overlooked. Well this week the German statistics office reported a dreadful set of unemployment figures, showing the number of jobless in Europe's biggest economy to be at the highest level for seven years
A Bloomberg report on the story contains the following passage:
New measures cutting benefits for the long-term unemployed took effect on Jan. 1. Those without a job, including people previously registered as social-welfare recipients rather than as jobless, will also face increased pressure to accept job offers or risk losing benefits. The changes will add an as yet undetermined number of people to the January jobless total.
But it is clear that the German authorities are still tinkering with the issue. That 10.8 percent of the working age population of such an important country should be out of a job is a disgrace. What I find odd though is how little outraged commentary in the economics part of the press there is about this. It is almost as if the European chattering classes have come regard this problem in Germany, and also France, with an air of sullen resignation. Of course, dealing with it will involve lots of vulgar, Reaganite actions such as deregulation, tax cuts to spur business formation and the like, which of course goes against the grain of Germany's 'managed' form of business so beloved of leftist commentators like Britain's own Will Hutton.
Germany needs to get its act together. Some 15 years since reunification with the eastern part of the country, Germany has failed to live up its early promise. With so many young people, including those from immigrant backgrounds, on the dole, no wonder commentators wonder about the social fabric of that country. They should.
When West Germany merged with East Germany in the early 90’s everybody in the world (including them) thought that the result would be a larger West Germany.
But what they got was the worst of both worlds. They ended up with a German who wants to sit on his ass all day long (East Germany) but still get a high income (West Germany).
The only thing that will cure the problem is to bring all of the Stasi members out of retirement and have them reform East Germany. The bad news is that Europe would have to deal with the Red Brigade and its terrorism again. The good news would be that West Germany would be prosperous and an ally of the US once more.
Posted by Jake at January 6, 2005 11:34 PM
Having grown up in an era when Germany's "economic miracle" was a mess into which my nose was repeatedly rubbed, I'm afraid all I can do in response to the state the country is in is experience a happy bout of schadenfreude.
I was never convinced that Germany's success was solely the result of the native industriousness of its workers, as I knew far too many British ex-servicemen who had participated in the complete fresh start given to post-war German industry (largely) by the USA, while comparable British industries were still attempting to produce widgets using 19th Century machinery and 18th Century attitudes.
The seeds of Germany's present problems lie only partly in re-unification. I clearly recall a German engineering manufacturer prophesying today's problems when we sat discussing his business in Dusseldorf, sometime in the early 1970s - a time when it looked as if Deutschland really was uber alles and would remain so.
The tragedy inherent in this is that a generation of Euro-statist politicians has grown-up and achieved power with no experience of real life and is now seeking to impose the Statist model that always was Germany's Achilles heel across the whole benighted continent. They are simply too detached from the messy business of earning a living to have realised that the "miracle" they so admire was really a mirage.
Posted by GCooper at January 6, 2005 11:55 PM
The Germans had to wait until now to get Attlee's Post War Labour Government.
Posted by Peter at January 7, 2005 03:30 AM
What GCooper said, with bells on. I got rather sick of hearing the left bleat on about the "German economic miracle." How you could have great success and have a wonderful all-consuming welfare state. It was, of course, rubbish and bound to come acropper.
Posted by Andrew Ian Dodge at January 7, 2005 12:46 PM
Actually, I think Germany is doing remarkably well, given its rather unique circumstances. Merging with Eastern Germany at a 1/1 parity of the mark on both sides from day one, with all the massive infrastructure upgrade costs it entailed, internal labor migration and other endless social and economic side effects, all the while maintaining the insanely expensive welfare and labor regulation system the country is famous - and infamous - for...and all of this without simply imploding under the internal white-dwarf-like density of self-inflicted liabilities.
I don't know how they do it.
But somehow, I doubt the EU15 will do anywhere near as well or better with its 10 new Eastern members.
Posted by Sylvain Galineau at January 8, 2005 12:36 PM
