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Over 5.2 Million Unemployed: Germany's Economic Tragedy Continues
Gerhard Schroeder's Government Helpless in the Face of Record Unemployment
We already know: The SPD-Green government has been one unending disaster for German-American relations. Gerhard Schroeder's exploitation of war fears and anti-American sentiment in 2002 is the only reason his Socialist-Green government was able to cling to power. What has followed is unprecedented in German history. Schroeder's SPD quickly dropped into the 20s in the approval ratings and unemployment continued to rise above 4 million.
Now the most unpopular government in German history has achieved a new all-time low: Schroeder, who earlier demanded that the German people judge him on his ability to create jobs, currently presides over a nation with over 5.2 unemployed citizens, the highest number since the Nazis came to power during the Great Depression. Right-wing extremists are gaining strength with every passing day, but Schroeder and his party refuse to accept any implication that their failed economic policy is a direct or indirect cause of the re-emergence of German nationalism.
So what is the SPD's solution? German exports. Particularly arms sales. Gerhard Schroeder recently visited China and expressed his desire to lift the EU's arms embargo on the Communist nation. The "Peace" Chancellor is currently on a trip to the Middle East where he is sealing business deals in Saudi Arabia, Kuwait and other dictatorial Arab states. There too, German arms are a best seller. The same German left that can't get enough of pointing out America's supposed hypocricy in supporting Saudi Arabia is busily signing weapons deals with the same government.
And even the German media, which has so often towed the government line, can no longer ignore the extent of Germany's economic tragedy. The usual excuses, that the unemployment is due to September 11 or that the numbers are due to statistical changes, now ring hollow. Even SPIEGEL ONLINE is describing the situation in Schroeder's government as one of "helplessness, perplexity and naked panic."
The worst part of it all: There seems to be no immediate recovery in sight. One has to admire the German peoples' patience with the profoundly incapable, incompetent government that has failed them year after year after year. In other nations, the SPD-Green coalition would have long received the boot.
The main two questions now seem to be: How much longer will Germany tolerate the SPD's economic debacle? When will the SPD finally be put under "massive pressure" by the German media for their obvious and profound failure?
Only time will tell...
And the incentive to invest in France and Germany would be what? The high taxes? The labor unions? The Brussels Politburo? The inflated Euro that inhibits exports? The tax-jacked price of fuel? The Government regulations? The superb political relations with the US? Wait, I know: it's the plan to sell weapons to China.Rising Jobless
http://www.bloomberg.com/apps/news?pid=10000102&sid=a_Cc7fwRkEDU&refer=uk
"Slower global growth and a strong euro is impacting euro zone growth,'' said Holger Schmieding, co-head of European economics at Bank of America in London. Fourth-quarter growth in Europe lagged behind the comparable U.S. rate of 0.9 percent and U.K. pace of 0.7 percent. "We need to get significant strength in investment to create jobs,'' Schmieding said.
German unemployment rose to the highest since World War II in February, a government report showed yesterday. In France, the jobless rate climbed to a five-year high of 10 percent in January.
Use Labor Better, Europe Told
By Gabriel Rozenberg, Economics Reporter
http://business.timesonline.co.uk/article/0,,8209-1506624,00.html )full text)
FRANCE and Germany must reform their labour markets to stem the widening gap in growth between Europe and the United States, the OECD said yesterday.
The Organisation for Economic Co-operation and Development told Europes leaders to take action to make better use of their labour forces and increase productivity.
The think-tank made its call for deregulation to strengthen employment as unemployment in Germany rose to its highest post-war level.
The number of those without jobs climbed by 177,000 to 5.2 million 12.6 per cent of the potential workforce although the rise was caused largely by statistical changes and seasonal variations.
German reforms of welfare and unemployment benefits caused an additional 126,000 people to be classified as looking for work. Lorenzo Codogno, of Bank of America, said: After these recording changes, it is difficult to say whether the underlying trend . . . is still deteriorating or has already stabilised.
In its report the OECD called for Germany to cut taxes on income and to unpick anti-competitive practices in professional services.
It also said that Germany must get more older people into work by scrapping preferential access to unemployment benefit for older workers.
The biggest eurozone countries must make their low-paid workers cheaper to hire, the OECD said. In France, Germany, Italy and Belgium the statutory minimum wage should be increased at a slower pace than wages in general.
France and Germany should also reduce the barriers for companies to enter network industries such as telecoms, electricity and railways to enhance competitive pressures, the OECD said. Dominant companies were crowding out competition in some network industries in Europe and new entrants often found it difficult to gain market share.
Productivity was being damaged where significant numbers of the working-age population were lacking in basic skills.
Jean-Philippe Cotis, the OECDs chief economist, said that the gap in economic growth between countries such as France, Germany and Italy and the US had grown sharply over the past two decades.
Economic catching up, which was widely believed to be automatic, started to stall during the 1980s and degenerated into relative decline during the 1990s, he said.
GDP per capita in France, Germany or Italy is 30 per cent below US levels and, at current trends, this gap will increase during the next few years.
That gap was emphasised yesterday with the publication of data showing that manufacturing continued to be weaker in Europe than in America.
