Skip to comments.Breaking Germany's Entitlement Culture
Posted on 03/16/2005 3:17:59 PM PST by srm913
Breaking Germany's 'entitlement culture' Crucial talks today seen as Chancellor's last chance to end economic malaise
By Derek Scally Straits Times Europe Bureau
BERLIN - CHANCELLOR Gerhard Schroeder will sit down with his political opponents in Berlin today to hammer out a cross-party 'Pact for Germany' designed to end years of economic gloom.
The meeting, following a much-anticipated speech in Parliament, is seen as his last-ditch effort to turn around the country before next year's general election.
The challenge is immense: Economic reforms introduced in January have yet to have a noticeable effect; unemployment is now at a 70-year high of 5.216 million, or 12.6 per cent; domestic consumer demand is still worryingly low; and leading economists have cut their growth forecasts to as low as 0.6 per cent for the current year.
But Mr Schroeder's problems are not just economic. He is trying to break what observers call the 'entitlement culture' that runs through German society.
A judge at the constitutional court told this week of a social welfare recipient who launched a constitutional challenge because the state refused to pay for new bicycles for his children.
Other cases arose from allegedly poor hospital food or because the state would not cover the cost of shampoo during a hospital stay.
Mr Schroeder has criticised this 'culture of welfare freeloading' where even the well-off take from the state what they are entitled to, rather than what they need.
'No welfare state can afford this long term without going to ruin,' he said last autumn.
The intervening months have seen a collective belt-tightening among Germany's unemployed.
Welfare payments are now means-tested and for shorter periods. But even with tighter rules, Germany's unemployed are still entitled to a rent-free apartment as well as a television, a fridge and a washing machine - all paid for by the state on top of their social welfare payments.
The handouts go beyond social welfare recipients. Young German couples can get a 'homebuilders allowance', meaning a couple with two children who build a new home are entitled to a total of 32,720 euros (S$70,850).
The government has argued for years that the allowance, introduced to address the postwar housing shortage, has no place in a well-off country, particularly considering the depopulated areas in the east with swathes of empty housing.
Opposition conservatives have always staunchly defended the allowance, but reports suggest Mr Schroeder will today propose abolishing it, using the money saved to cut unemployment insurance contributions by 1.5 per cent.
President Horst Koehler rang the alarm bell on Tuesday, saying that Germany could no longer continue living beyond its means.
He said that the 'entitlement culture' and resistance to reform was a 'betrayal' of the postwar spirit that built Germany into an industrial giant.
'Long before anyone spoke of globalisation, Volkswagen Beetles were running everywhere in the world, and ran and ran,' he said, urging a new era of 'energy, creativity and solidarity'.
'Our total debt...is currently at 7.1 billion euros, that's 330 per cent of our gross domestic product,' he said. 'Do we finally see what a burden this is for our children and grandchildren?'
I think this is a watershed moment, the next 18 mos. or so. There are now voices in Germany and France calling for modestly trimming the bloated welfare state, but there is deep resistance. I don't know yet if any meaningful reform will happen.
"'Our total debt...is currently at 7.1 billion euros, that's 330 per cent of our gross domestic product,' he said."
So over 3 times their GDP. What's ours? It's less than annual GDP isn't it?
The assumption was that the German welfare state would be paid for by German efficiency, German engineering, and the German work ethic. They did not anticipate that the cultural effect would be so corrosive that it could not be sustained.
"I think this is a watershed moment"
Either the German people will come to their senses or they won't. Like any socialist state, there are many, powerful interests that will want to keep the gravy-train running. Who can blame people for wanting to collect freebies that the government shouldn't necessarily be providing in the first place? Believing to the contrary goes against common sense. France is virtually paralyzed by their interest groups. Let's see if the Germans are too. Either way, it's going to hurt!
US debt is between 35% and 55% of GDP. Germany's is actually 66%, not 330%.
330% for Germany is probably what they get after including unfunded future obligations in Social Security and other programs. If US debt was counted in a similar way, it might be more than 35%-55%, too.
Unfortunately, the work ethnic is gone in the W.German workers. We have a German on contract who gets German terms..8 weeks vacation..New years and Vacation bonus.
He is management employee, but goes home on the dot..turns off his company cell and won't keep track of important projects while his is on his long vacations..
Germany is where the rats would take us. No thanks.
How dare Schroeder take economic factors rather than social factors into consideration! How positively Anglo-Saxon! What would his good buddy Jacques say? He must not be a good European and was not "well brought up."
Surely they tax themselves to prosperity. Let's urge them to give it the ole socialist try!
That reminds me of a business trip to Germany. The Germans were very prompt about getting to their workstations in the morning, but don't you dare get between them and the door at quitting time. The only ones who worked late were the two bosses, and I think they were Turks.
Now, on to predictions, the opposition party isn't going to help Schroeder save his bacon. Two, all Schroeder is going to succeed in doing is to break his own party. His intra-party political opponents are sharpening their knives to carve him up. Outside the party, the powerful Unions aren't going to stand for this. The opposition parties campaign on saving benefits. In other words, until Germans believe their is a crisis, they're screwed. Nothing is going to happen.
The US debt is about 8,000 billion:
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