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Germany reaps rewards of entitlement cuts - The Washington Post
Keywords:
Germany went through a period of stagnant growth and persistently high unemployment leading to reforms of the welfare system and entitlements under the Schroeder administration. The reforms led to lower unemployment benefits and an effort to get the unemployed take up jobs. Instead of unemployment benefits that amounted to half the salary indefinitely, unemployment benefits ended in 12 months under the reforms, and workers were forced to take up jobs or dig into their savings. The cuts to benefits led to more of the unemployed taking jobs that were not their first choice with lower incomes. Unions agreed to defer wage demands and wages remained relatively flat for a long period. The "kurzarbeit" system of government subsidizing employers to retain workers during economic downturns, helped cushion the workforce from ups and downs in the economy. Unemployment which was in double digits a decade ago, is now 6.1%. The system still preserved some other aspects of generous benefits- parental leave of 14 months at two-thirds salary, vacation time and publicly sponsored health insurance. Recent changes include raising the retirement age to 67 from 65. The Organization of Economc Cooperation and Development estimates that the 200,000 jobs saved in Germany during the recession of 2008-2009 cost the government $7 billion. Government funds helped companies retain workers by paying a portion of worker salaries and averting layoffs.This comes to $35,000 per job. Compare this with the $38.9 billion allocated to a loan program at the Energy Department under the U.S. stimulus. 8050 jobs were created under this program according to the Washington Post- for the money spent so far in Sept 2011- 2 years into the loan program, of $19.3 billion. This comes to $2.4 million in government guaranteed loans per job. The Energy Department says that 33,000 jobs were saved under the $5.9 billion that was given to the auto industry under this program for investments in manufacturing to improve fuel efficiency. This comes to $178,000 per job. The Energy Department and Congress estimated a 5%-10% loss on the $38.6 billion loan program for loans that go sour, such as the Solyndra solar company $535 million loan. This comes to $1.9 billion at 5% loss and $3.8 billion for a 10% loss. The purpose of these figures is to show the cost of programs when the programs fail to achieve job goals or produce too little for the investment. The $3.8 billion loss under the program is over half the $7 billon Germany invested for the 200,000 jobs saved as estimated by the OECD. That ranks as a far superior investment than the Energy Department program. For the U.S. there are aspects of German reforms such as "kurzarbeit" that bear emulation, with serious questions about the effective use of the U.S. stimulus funds. For the rest of Europe the stingier unemployment benefits, raising the retirement age to 67, and other reforms send a different message. From the average German the message is: we made the tough changes, the rest of Europe cannot expect Germans to pay higher taxes while they put off similiar changes. Italy needs to change its retirement age, just as the Germans have done. As Chancellor Merkel puts it: "People in countries like Greece, Spain, Portugal shouldn't be able to retire earlier than in Germany. It's important for everybody to put in effort to make it roughly equal. Germany will only help when others really make an effort." Which is why Greece, Spain, Italy, even France are faced with making serious changes. This isn't stalling when it comes to euro bonds, from the German perspective. And it isn't about the lack of committment to the idea of a European Union, as all major political parties in Germany, the CDP, the SDP and the Greens, all strongly support the idea of a European Union.
A German view of bailouts by the president of the Ifo Institute in Munich
05/26/2010
Hans-Werner Sinn of the Ifo Institute says Germany has already done its part, and socialization of losses in Europe- through eurobonds or other measures- is dangerous. Something he says, even the U.S. avoided doing in the 1830's and 1840's when it let 8 states go bankrupt.
Grouped Articles
Elites Flock to Anti-Euro Party, Alternative for Germany
New York Times 04/14/2013
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
New York Times 05/26/2010
German Election Overturns Political Order
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Germany Open to Deal on Pooling Euro Debt, With Limits
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Germany Can't Fix the Euro Crisis
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Alsace on both sides of the Franco-German border and the efforts to make the European experiment work
10/28/2006
The saying goes that "the French work to live and the Germans live to work." Alsace has been part of France and of Germany at different times in history. Here one sees the two systems in close proximity, the French more attuned to state control than the German model, with more regulations. Changes were made in Germany with labor reforms during an earlier period of high unemployment, while things have not changed as much in France. The German apprenticeship system works well there but a university degree is favored by French families. The efforts to make the French system work with high unemployment and the active debate in France for improvements.
Grouped Articles
Poll Shows European Union Loses Favor on Continent
New York Times 05/13/2013
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
New Attempt at French-German Amity Stumbles in Venice
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Can't Find Skilled Workers? Start an Apprentice Program
Wall Street Journal 01/17/2014
Britain Scrambles to Fill Skills Gap
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France's New Finance Minister Faces Fiscal Challenge
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Gerhard Schroeder, former chancellor of Germany, Agenda 2010, and Angela Merkel's handling of the eurozone crisis
09/20/2011
Gerhard Schroeder describes his approach to a new Agenda 2020 for Europe. Schroeder implemented Agenda 2010 for Germany with changes to the welfare state in Germany starting in 2003. He talks about how this was done and important decisions that were made at the time for implementing it without losing public confidence, which bear directly on the situation today.
Grouped Articles
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
Germans Respond to Merkel's 'Motherly' Side
Wall Street Journal 08/23/2013
Germany's Surplus Isn't the Problem
Wall Street Journal 11/11/2013
Germanyâs Neighbors Admonish It Over Surplus
New York Times 11/13/2013
Germany’s flagging economy: Build some bridges and roads, Mrs Merkel
Economist 10/17/2014
Greek Crisis Shows How Germany’s Power Polarizes Europe
Wall Street Journal 07/07/2015
A warning light for Greece to exit the eurozone and return to the drachma to restore competitiveness and growth 2011-2012
05/26/2010
Greece needs to lower prices by 31% just to get to the level of Turkey, says the head of the Ifo research institute in Germany, Wener Sinn. Experts fear a breakdown in civil order inside Greece if deflation at this level occurs with Greece still using the euro. Hollande, the Socialist party candidate in France, also expressed similiar concerns, as reported in the New York Times, calling it a breakup in European governance that followed the breakdown in Greek governance. Sinn says the bondholders are overly exaggerating the risks of a breakup in the eurozone if Greece exits the euro.
Grouped Articles
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
New York Times 09/25/2011
New York Times 05/26/2010
New Attempt at French-German Amity Stumbles in Venice
Wall Street Journal 08/21/2013
German Election Overturns Political Order
Wall Street Journal 09/23/2013
Departing EADS Chief Urges Europe to Recommit to Industry
New York Times 04/12/2012
Germany's labor, welfare system and entitlement reforms and lessons for the U.S. and Europe.
10/28/2006
The "kurzarbeit" program, work sharing and other measures taken in Germany.
Grouped Articles
The Price of Saving Jobs in Germany
BusinessWeek 07/29/2010
French Attempt at German-Style Labor Reform Flounders
Wall Street Journal 12/05/2014
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
Amid crisis, Italy confronts a culture of tax evasion - The Washington Post
Washington Post 11/25/2011
Bayer: Pressure on Prices Has Bad Side Effects
Wall Street Journal 02/07/2012
Even Critics of Safety Net Increasingly Depend on It
New York Times 02/11/2012
The outlook for further reforms in Germany after the 2009 elections.
09/28/2009
This looks dim considering that unemployment may hit 11% in 2011.
Grouped Articles
German Coalition Hangs on a Vote by One Party
New York Times 12/09/2013
Wall Street Journal 09/28/2009
German Economy Faces Pain, Official Says
New York Times 10/26/2009
Merkel Looks to Recharge Her Ratings
New York Times 07/21/2010
Will Stress Tests Overcome Resistance to German Bank Reform?
New York Times 07/21/2010
Germany's economy: Angela in Wunderland
Economist 02/05/2011
Angela Merkel's handling of the financial crises in eurozone countries
04/29/2010
The German response to the debt crisis in the eurozone and the events in 2011-2012.
Grouped Articles
As Greek Drama Plays Out, Where Is Europe?
New York Times 04/29/2010
Germany Clears Rescue for Greece
New York Times 05/03/2010
Economist 05/13/2010
Germans Respond to Merkel's 'Motherly' Side
Wall Street Journal 08/23/2013
Merkel Wins Big in German Election
Wall Street Journal 09/23/2013
Germany's Surplus Isn't the Problem
Wall Street Journal 11/11/2013
The 2010 austerity budget and the European financial crisis affecting Spain.
05/13/2010
The contagion effect affecting Spain after Greece and Portugal similar to the manner in which the Asian financial crisis spread during a prior decade.
Grouped Articles
New Spanish Budget Free of Austerity Measures
New York Times 09/27/2013
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
Spain is simply shifting the problem
Wall Street Journal 05/14/2010
Amid Europe's challenges, citizens face lifestyle shifts
Wall Street Journal 05/14/2010
French Cracks Are Showing in Euro-Zone Core
Wall Street Journal 05/13/2010
Wall Street Journal 05/13/2010
Italy, Spain and austerity measures- 2011-2013
08/08/2011
Analysts point to the austerity measures adopted by Italy and Spain much earlier than other countries in the eurozone. The risk now is cutting into muscle as growth for 2011 is expected to be below 1% in both countries. Italy say analysts is actually in surplus when the interest on debt is excluded.
Grouped Articles
Italy Urged to Resist a Relapse in Spending
Wall Street Journal 05/03/2013
Still Sputtering, Spain Turns Away From Cuts
Wall Street Journal 05/12/2013
German Election Overturns Political Order
Wall Street Journal 09/23/2013
New York Times 11/03/2013
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
European Finance Ministers Support Investment Program
New York Times 09/14/2014
Germany's "kurzarbeit" and government-business cooperation to tackle cyclical swings in the economy
07/29/2010
About half a million jobs were saved by one estimate through the German government sharing the costs of labor retention with industry during the last downturn. The program is known as "kurzarbeit" in Germany and is accepted by the German public, workers and business as a better way to handle the cyclical swings in the economy. The lack of a similiar program in the U.S. means a larger loss of jobs in the U.S., which is being painfully felt in 2011-2012. U.S. programs focussed on a stimulus measure and government spending, not on a program of joint cooperation between industry and government such as "kurzarbeit." There is no history of such cooperation in the U.S. and the government is seen more in the sense of intervention than cooperation with industry.
Grouped Articles
The Price of Saving Jobs in Germany
BusinessWeek 07/29/2010
Where Germany, U.S. differ: How much should government steer the economy? - The Washington Post
Washington Post 06/08/2011
Fixing America's Economy: Nine Ideas from Around the World
BusinessWeek 06/08/2011
Growth in Euro Zone Stalls, Slowing Debt Crisis Solution
New York Times 08/16/2011
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
Wall Street Journal 11/21/2011
The Obama White House and the investigation into the half a billion dollar loan to Silicon Valley solar company Solyndra
01/16/2009
Solyndra collapsed in mid 2011. U.S. taxpayers will bear losses on the loan supported by the Obama White House. The cost of jobs created in the U.S. with Stimulus money.
Grouped Articles
New York Times 04/13/2013
New York Times 09/06/2011
White House pushed $500 million loan to solar company now under investigation - The Washington Post
Washington Post 09/14/2011
Obama green-tech program that backed Solyndra struggles to create jobs - The Washington Post
Washington Post 09/15/2011
Obama administration e-mails: Giving more taxpayer money to Solyndra was risky - The Washington Post
Washington Post 09/16/2011
Wall Street Journal 09/16/2011
U.S. Stimulus spending and meeting long term sustainability goals and short term job goals.
12/24/2008
Reconciling short term job goals and longer term goals to build an America in which we live and work with sutainability in mind for a global economy/ and build education and infrastructure to compete in a global economy.
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U.S. Schools Chief Arne Duncan Labors to Straddle Political Divide
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Allan Meltzer's soluton for the financial crisis facing euro currency countries Portugal, Spain, Italy, Ireland and Greece
05/26/2010
Meltzer says a new currency union should be setup for the northern countries France, Germany, and others who commit to financial discipline and fiscally binding arrangements. The euro currency countries such as Italy and Greece should devalue their currency to fix gaps between wages and productivity in their countries. At a later stage these countries could be readmitted to the new currency union under strict fiscally binding arrangements with enforceable sanctions.
Grouped Articles
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
New York Times 09/25/2011
New York Times 05/26/2010
Wall Street Journal 09/14/2011
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ECB study in April 2013 using 2009-2010 data showing the median household wealth in Germany at 50,000 euros, lowest in the eurozone
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The median for household wealth in Greece is 102,000 euros.
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Elites Flock to Anti-Euro Party, Alternative for Germany
New York Times 04/14/2013
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
Wall Street Journal 03/03/2010
New York Times 05/26/2010
Europe's Easy-Money Policy Snubs German Savers
Wall Street Journal 11/25/2013
Americanized Labor Policy Is Spreading in Europe
New York Times 12/03/2013
How the German role in the eurozone crisis is viewed inside Germany, in Greece, Spain, Italy and the rest of Europe
05/26/2010
German media/public opinion and media/public opinion in other eurozone countries.
Grouped Articles
Elites Flock to Anti-Euro Party, Alternative for Germany
New York Times 04/14/2013
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
Germans Love Europe â But Not the Euro
New York Times 10/11/2011
New York Times 05/26/2010
Luxembourg Foots a Big Piece of the Greek Tab
BusinessWeek 05/27/2010
Germany's Surplus Isn't the Problem
Wall Street Journal 11/11/2013
Shifts in German public opinion to bailouts of other European countries
12/01/2010
Grouped Articles
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
Collapse of Greek Bailout Deal Brings Surprise Boost to German Coffers
Wall Street Journal 07/04/2015
Greek Crisis Shows How Germany’s Power Polarizes Europe
Wall Street Journal 07/07/2015
Merkel’s German Critics Say Greek Bailout Was Doomed From Start
Wall Street Journal 07/08/2015
Debt crisis tests German ties to euro
Washington Post 12/01/2010
Merkel's Defense of Euro Forged in East Germany
New York Times 01/30/2011
The crisis facing Centre-Left parties in Europe as they lose their working class base with promarket reforms- 2005-2009
09/28/2009
Gerhard Schroeder and the SPD in Germany lost badly in 2009 elections with support down to 23% of the vote. In Britain, France, Poland, a similar situation prevails.
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German elections pit Merkel, challenger over poverty problems - The Washington Post
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German Election Overturns Political Order
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Germany's Social Democrats Agree to Coalition Talks With Merkel
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Europe's Easy-Money Policy Snubs German Savers
Wall Street Journal 11/25/2013
German Coalition Reaches Deal but Faces Tough Party Vote
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A shift to the Social Democrats and Greens in Germany's regional elections in 2011-2013
02/22/2011
Merkel and the Christian Democrats are not getting much credit for an improving economy, as many of the reforms date back to the government of the SDP's Gerhard Schroeder. The unpopularity of foreign minister Westerwelle of the Free Democrats in Germany's ruling coalition government.
Grouped Articles
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New York Times 04/14/2013
No Clear Winner in Debate Between Merkel and Challenger
New York Times 09/01/2013
Germanyâs Political Fragmentation May Pose Challenge for Merkel
New York Times 09/16/2013
Painful Past Plagues German Greens
Wall Street Journal 09/18/2013
German Election Overturns Political Order
Wall Street Journal 09/23/2013
Germany's Social Democrats Agree to Coalition Talks With Merkel
Wall Street Journal 10/21/2013
What does Germany want from the Euro and the European Union? The Euro issue facing Germany in 2011-2015
03/03/2010
German political leaders do not want a "transfer union." At the same time they want to keep the European Union, just as much as Chancellor Kohl and Chancellor Adenauer. Merkel, Schroeder, Schauble and other leaders agree on the need for the European Union. The question is how to bring fiscal discipline to the EU, even if this means redesigning the structure of the EU. The vision of a united Europe persists.
Grouped Articles
Wall Street Journal 03/03/2010
Germany's Surplus Isn't the Problem
Wall Street Journal 11/11/2013
New York Times 05/22/2014
Greek Crisis Shows How Germany’s Power Polarizes Europe
Wall Street Journal 07/07/2015
Economist 08/08/2015
Charlemagne: Germany’s euro question
Economist 09/10/2011
German reaction to the debt crisis in Greece, Portugal, Spain and Italy.
04/09/2009
Germany said to be turning nationalistic in this crisis, seeing Germany's economic successes as its own, and not accepting the advantage of export markets in Europe in strengthening Germany's economic position.
Grouped Articles
Wall Street Journal 03/03/2010
New York Times 11/03/2013
Germany's Surplus Isn't the Problem
Wall Street Journal 11/11/2013
How Italy's ENI Vastly Boosted Oil Output
BusinessWeek 04/09/2009
Greek Crisis Shows How Germany’s Power Polarizes Europe
Wall Street Journal 07/07/2015
New York Times 05/26/2010
Italy's austerity measures- 2011-2013
06/30/2011
Grouped Articles
Italy Urged to Resist a Relapse in Spending
Wall Street Journal 05/03/2013
How Righteousness Killed the World Economy
New York Times 10/12/2014
EU Won’t Reject French, Italian Budgets
Wall Street Journal 10/28/2014
New York Times 11/30/2014
Italian Government Advances Austerity Plan
New York Times 06/30/2011
Wall Street Journal 07/12/2011
The 2008-2009 U.S. Stimulus and solar energy projects
01/16/2009
Grouped Articles
New York Times 09/06/2011
Wall Street Journal 09/09/2011
White House pushed $500 million loan to solar company now under investigation - The Washington Post
Washington Post 09/14/2011
Obama green-tech program that backed Solyndra struggles to create jobs - The Washington Post
Washington Post 09/15/2011
Wall Street Journal 09/16/2011
Solyndra Told White House in May It Was Healthy
Wall Street Journal 09/16/2011
Impact of U.S. Stimulus spending
01/16/2009
Grouped Articles
New York Times 09/06/2011
Stimulus and the Depression: The Untold Story
Wall Street Journal 09/26/2011
New York Times 08/08/2010
New York Times 10/10/2010
The Obama Stimulus Impact? Zero
Wall Street Journal 12/09/2010
Wall Street Journal 09/08/2011
What the U.S. and other eurozone countries can learn from Germany in reducing unemployment (1)
04/30/2009
The Harz labor market reforms under the Schroeder administration helped Germany reduce unemployment after over a decade of high unemployment folowing reunification.
Linked Articles
Germany reaps rewards of entitlement cuts - The Washington Post
Washington Post 09/20/2011
Learning Labor Market Lessons from Germany
BusinessWeek 04/30/2009
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