Germany needs a jolt
German
voters have just elected a parliament that will not address the country’s most important problems, that cannot make strong decisions and that will put off until tomorrow actions that desperately need to be taken today.
That’s bad news for Germany’s five million unemployed. It’s bad news for Europe as a whole, slumped in economic malaise. And it’s bad news for North Americans, who are facing a future in which the democracies of Europe will matter less and less — and an aggressive and possibly hostile China will matter more and more.
Two years ago, the American Institute for Contemporary German Studies published an alarming study of the German economy’s long-term problems. Since 2002, it has not grown at all. In the 10 previous years, from 1992 to 2002, it grew at the dismal rate of 1.4% per year, after inflation. Germans cannot fairly blame the costs of reunification for their troubles: In the last decade before reunification, 198089, the German economy grew at a rate of only 1.9% — far behind the United States and the United Kingdom, and below average even for Western Europe.
What’s holding Germany back?
Just as an example, consider its laws on shopping hours. Until the mid-1990s, all German stores, including food stores, were obliged to close by 6 p.m. on weekdays and 4 p.m. on Saturdays. Sunday shopping was banned altogether. In 1996, one small reform allowed stores to open longer during the Christmas season. In 2002, reformers gained another small victory: Shops could stay open until 8 p.m. during the week. But even now, it remains illegal to sell bread on Sundays or to buy a dress after 4 p.m. on Saturdays.
Few Germans will defend their outmoded laws — but the power of trade unions and small shopkeepers has again and again prevailed over public opinion.
It’s not just shop hours. German business is a maze of rules, regulations and restrictions that discourage innovation and job creation. The German welfare state offers lavish sick leave and disability benefits, tempting workers to quit their jobs despite the world’s highest average pay and benefits. Between 1990 and 2000, the percentage of the German adult population at work declined by an average of 0.7% per year.
And once a German leaves his job, it is hopeless to expect him to move to find another. In order to discourage real estate speculation, the German government charges a 10% tax on the purchase or sale of a house or apartment — which makes moving to another town or neighbourhood a very expensive gamble for a job- seeker.
Meanwhile, high housing costs contribute to the collapse of the German birth rate: Today there are more Germans over age 60 than under age 20.
Germany desperately needs a jolt. What it was offered instead was a choice between the reactionary Gerhard Schroeder and the listless Angela Merkel. True, Schroeder introduced some tentative welfare reforms in 2002, when he was still trying to position himself as the Teutonic Tony Blair. He quickly figured out, however, that there was far more political profit in opposing change than advancing it. So he seized on the Iraq war as an opportunity to speak up for the anti-Americanism that still ran strong in eastern Germany.
Earlier this year, the cover of the inhouse magazine of Germany’s largest union, IG Metall, ran a cartoon that caricatured American investors in German companies as bloodsucking mosquitoes. Some noted that the image in the cartoon hearkened back to a famous image of the Nazi era. Guido Westerwelle, the leader of Germany’s pro-immigration, free- market party, the Free Democrats, spoke out against the caricature at a public meeting: “ I say this as a liberal, with the greatest clarity: I am against hate of foreigners from the right, but I am also against hate of foreigners from the left.” But Schroeder did not rebuke his allies: Instead he called for new regulations to punish foreign investors who tried to rationalize German businesses.
These methods worked. In May, Schroeder stood almost 20 points behind the Christian Democrat Merkel in the polls; on Sunday, they ran almost exactly even.
Merkel did not help her own cause. While constantly arguing for the need for radical change, she offered few specifics of what she had in mind. Her vagueness allowed Schroeder to get away with accusing her of harbouring all kinds of scary secret agendas, while she herself never offered a vision of the future exciting enough to overcome Schroeder’s mindless defense of the failed status quo.
So the status quo will continue, and Germany will fall further and further behind, dragging the rest of Europe with it. For the rest of the West, this implies a future that is far more lonely and dangerous than it might otherwise have been. When Europeans and Germans blame Americans for “unilateralism,” they might from now on ask themselves a little more searchingly whose fault it really is that the Americans so often feel that they have no one but themselves to rely upon in an increasingly threatening world.