More from behind the great PPV firewall. Unfortunately only the reproduced extract is available to non-subscribers (like me):
The German economy, once the economic powerhouse of Europe, is stalling. Annual average growth in gross domestic product since 1995 has been just 1.2 per cent, unemployment has increased since 1970 to 11 per cent, the social security system could no longer be financed even if the population were not ageing, and the government’s finances are in disarray. This is a knot of problems, and it is difficult to disentangle the many threads, isolate one issue and solve it.
Unfortunately, Germany also finds itself in a political trap. Germans have become accustomed to the current high level of GDP used for social protection. In the west, this is due to earlier expansion of the welfare state; in the east, to the expectation of equal treatment created by the one-to-one exchange rate chosen for unification of the two halves of the country in 1990. Unfortunately, expectations determine voters’ behaviour, and political parties anticipate how the electorate will vote. Politicians are reluctant to tell the true story and to propose the reforms that are necessary. Witness the campaign leading up to Sunday’s regional election in North Rhine-Westphalia, where Gerhard Schr?der’s Social Democratic party, facing defeat, has stepped up its anti-capitalist rhetoric.
I think this is a clear statement of the problem from Horst Siebert. Of course we may all agree on the diagnosis, and yet beg to differ over the medication needed. Even if you can’t get through the firewall, you can browse his complete book at Amazon.
Standard issue “the market will fix everything” nonsense. In the end of the article he more or less says that government funded universities can’t be good.
It might help if I quoted that bit:
It is telling that Germany is actually debating whether responsibility for its universities – still administered by the ministries of culture and education of the L?nder – shou ld be constitutionally assigned to the federal government. Yet Harvard and Yale in America have neither federal nor state-level administrators; they are the result of the decentralised market process. In the same vein, German universities so far have not imposed student fees comparable to those in the US or UK. An opportunity to create high-value jobs in this area is being lost.
OK, Thanks for that Colman. I’m going to browse the book a bit later.Then I’ll be able to comment better.
The book is well worth browsing. For example he is well aware of the demographic issues. He has a whole chapter on immigration – which he recognises as essential. He also makes the point that since the ability of gastarbeiters to settle permanently in Germany was more limited than their equivalents in France or the UK, you need to look at the figures for in- and out-migration. As of 2002 the average period of stay was 15.6 years. Which is incredible.
He gives a figure of net migration into Germany in 1998 of 47,000 – which is again incredible. To put this in perspective: net migration into Spain – a country less than half the size of Germany is currently running at 650,000 per annum.
He also makes the very important point in my view that there tends to be a very high percentage of unemployment among immigrants due to the relatively high informal income floor provided by the welfare system in comparison with what can be earned by working.
The contrast here with Spain is salutary, since new immigrants have no access to welfare and support themselves by working. This means that they are relatively well accepted by the Spanish population even in large numbers. As he says Germany doesn’t have an adequate labour market for an immigration country, and that is what Germany needs to become given the demographic situation.
Sorry, I’m having a free browse of the Amazon book, and using these comments to keep working notes. I hope someone might find this useful :).
He then gives a summary of the administrative procedures which the would be migrant has to follow.
He goes through all the stuff about how to get an unlimited stay permit – which you need to have lived in Germany 8 years to apply for. I still find myself astounded by all this.
I keep seeing people complaining about how the Turks don’t integrate: but how the hell do you want people to integrate if they can only see themselves as being permanent ‘temporary visitors’.
He then goes on, of course, to talk about the green card rules.
He favours this type of approach, something like Australia or Canada. I’m not convinced, but I’ll have to go into this on another occassion.
The big years of migration into Germany where 69/70 and 89/90. This latter one was comparable with what is happening in Spain now.
Bottom line he recognises there is a problem, favours a positive immigration policy, even if he is somewhat unambitious and unimaginative.
OK I’m now reading the chapter on ceded sovereignty and economic policy (IE the euro). Basically boring and unoriginal.
A lot of rigmorole about the details of how to implement the stability and growth pact.
In the end the book is a disappointment. I suppose it is a good overview of the issues, but you won’t find anything being said which isn’t otherwise pretty generally available.
My advice: browse a bit, but then save your money.