Aside from revealing the extent to which internecine warfare seems to have broken out in the CDU camp, I was pretty much stopped in my tracks by this statement in Heinrich von Pierer’s interview with the FT:
“The important problems, such as the ageing of the population or what kind of immigration policy we need, are not being discussed at all”
Note: Heinrich von Pierer is Angela Merkel’s chief economic adviser and was formerly chief executive at Siemens.
What a pity that the FT only published a one-liner from a presumably somewhat longer interview.
And I don’t know how seriously to take his view that the ageing has not been discussed. It certainly was a subject of relevance in the context of pension, health care etc.
“What kind of immmigration policy we need”. A perfectly ambiguous statement. Is he for or against more immigration ? If he wants to argue for more (controlled)
immigration, he is supporting the wrong party.
Anyway, I haven’t seen much from him in the German media during the election campaign. Maybe he doesn’t want to fall out too harshly with his partner Gerd Schroeder ?
“And I don’t know how seriously to take his view”
Well you are in Germany and I’m not Karl Heinz, but then, he may be Germany’s most important economic opinion in the next government (unless, that is, you prefer Kirchhof) so I think we should take him seriously.
“Is he for or against more immigration”
I think it is reasonable to assume that anyone who mentions ageing and immigration in the same sentance has to be in favour.
Or let me put it another way: ageing, immigration *and* labour market reforms.
“I haven’t seen much from him in the German media during the election campaign”
I think this is the point, I think he is complaining that Kirchhof and his flat tax have handed a lot of things to the SPD on a plate, oh, that and citing Ronald Reagan.
Everybody debates Turkish accession to the EU as a potential trigger for a rather substantial influx of immigrants. Everybody discusses how to create more jobs for fear of doing irreparable damage to the current pension system if job destruction continues.
So NOBODY = EVERYBODY.
Wow! Mr. von Pierer can demonstrate that X = U. Surely Edward has instantly established a claim to possessing equally magical powers by virtue of putting an exclamation mark behind von Pierer´s revelations?
“if job destruction continues.”
I think von Pierer’s argument would be that it’s not job destruction that’s the problem but an ageing and therefore declining labour force which won’t be able to pay for the pensions without substantial immigration. This is the bit he says isn’t being discussed while everyone focuses on globalisation and non wage costs as a source of job loss.
“Everybody debates Turkish accession to the EU as a potential trigger for a rather substantial influx of immigrants”
Well we know that Merkel is against this, are you saying that Schröder is in favour of Turkish accession because it will increase the flow of immigrants? I hadn’t picked that part up, I thought his argument was geopolitical.
I think what von Pierer is getting at is the way the flat tax and Reaganomics have hijacked the debate away from more pragmatic and in some ways more pressing structural questions.
Also, what debate has there been on child support as a way of increasing the birthrate? Is this another of the key questions I have missed?
Don´t you see how you substitute an emphasis on intentions for economic logic in regard to the two topics of Turkish accession and child support?
Four points:
1) Yesterday I leafed through the latest flyer that is being distributed by one of the two big parties. On page 2 (of 4) it recites the current TFR number and the replacement level, then drawing conclusions. Guess which party that comes from? Not Mr. von Pierer´s.
So Germany is a whole nation of “nobodies” now…
2)”child support as a way of increasing the birthrate?” In the same flyer the SPD commits to the objective of offering daycare for every 2-year-old. Perceived fiscal constraints usually tend to prevent the SPD from fulfilling this long-standing promise while the CDU prefers to cite fiscal reasons as an excuse for its utter disinclination to consider child support as a top priority at all.
3) What´s the importance of admitting Turkey into the EU for geopolitical reasons – rather than demographic ones? Migration doesn´t depend on the wording of the invitation. (Of course, if demography were the only concern, you should conclude that Turkey and Russia need to open their borders to each other, and that could be facilitated by offering both membership in the EU – at least in the long-run and, of course, subject to the “rule of law and democracy”-condition.)
4) Merkel doesn´t seem to realize that Thatcher and Reagan represent incompatible policy models for her to imitate. She will either figure that out early (and hopefully not follow the Thatcher path – Germany doesn´t have any Arthur Scargills in need of being stripped of their power), or she will be a one-term chancellor. However, my money is on her trying to emulate Thatcher more than Reagan – her choice of quotes notwithstanding. So far, her career has been based on doing the “iron-lady” thing. It´s no coincidence that the ranks of female politicians in the CDU have been thinned out in due course. Long-term, the question is who is going to learn faster: the electorate (by realizing that they prevent the Social Democrats from returning to power if they split their vote across three leftist parties) or Ms. Merkel.
The Social Democrats would best be served by developing a European policy model. Germany can either follow in Japan´s path – which doesn´t seem to be possible within the EU -, or it will drive EU reform in the opposite direction of what “received wisdom” would currently dictate, seeking to combine strict adherence to Maastricht with an expansion of fiscal powers and resource allocation capacities on the “federal” EU level. So far, Schröder hasn´t got it, and I´d be surprised if Merkel did.