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How Real Is The Current German Economic Miracle?


General Urko

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I was in Germany recently and was surprised to find that it has no minimum wage, a point clarified by the German ambassador on a discussion on the German economy on PK subsequently!
So can it really be called a miracle if established workers have been forced to take very little by way of pay increases, a once great social welfare system has been destroyed to bits under Hartz IV rules, workers cannot usually retire until 68, workers pay AFAIK, relatively high taxes and many workers are effectively forced into doing low paid work, not for the good of their communities as in CE schemes here, but for the likes of Supermaxie!:mad:
To what extent will Angela try and superimpose all this madness on top of us and will she succeeed?
 

Telemachus

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The German people arent having any kids, their problems are going to get a whole lot worse over time. They have abnegated themselves as german Author Thilo Sarrazin has said.
 

Ryan Tubbs

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So can it really be called a miracle if established workers have been forced to take very little by way of pay increases
But German workers are happy with this arrangement. They don't seek crazy pay increases, and in return they're happy with the persistently high employment and economic stability they have enjoyed for the last 50 years as a result of the broad economic consensus.

Why do trade union hacks insist that it's always all down to pay rates?
 

Ryan Tubbs

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What miracle?
Persistent stable growth and low unemployment for the last 30-40 years, with the only blips being approximately 2% contractions in 1968/69, and in 1974 during the oil crisis. Added to that the progressive establishment of an excellent welfare state, albeit one which is now threatened by an ageing population, as are other systems across Europe.

I'd call that a miracle when you consider that most of the rest of the world has gone through 2/3 crippling recessions in the 1970s, 80s, and the 2008-2012 period.
 

TiredOfBeingTired

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What miracle?
Senor Ferrari: Might as well be frank, monsieur. It would take a miracle to get you out of Casablanca, and the Germans have outlawed miracles.
Casablanca
 

stopdoingstuff

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Persistent stable growth and low unemployment for the last 30-40 years, with the only blips being approximately 2% contractions in 1968/69, and in 1974 during the oil crisis. Added to that the progressive establishment of an excellent welfare state, albeit one which is threatened by an ageing population.

I'd call that a miracle when you consider that most of the rest of the world has gone through 2/3 crippling recessions in the 1970s, 80s, and the 2008-2012 period.
Most of Western Europe, the USA, Japan and Korea have had similar performances. The more recent "miracles" in South East Asia, China and India are equally as impressive. But the question he asked was about the "current" miracle, and I hold that it is far from miraculous.
 

True Republican

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The minimum wage is far too high in Ireland it needs to be cut to €6.50 per hour, if it means more jobs been created especially for younger people then so be it.
 

General Urko

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The minimum wage is far too high in Ireland it needs to be cut to €6.50 per hour, if it means more jobs been created especially for younger people then so be it.
Odd that somebody calling him/herself "true Republican" should hold a view like that!
 

True Republican

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Odd that somebody calling him/herself "true Republican" should hold a view like that!
Not at all, its better to have someone working instead of been unemployed. Wouldn't you agree?
 

asknoquestions

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I was in Germany recently and was surprised to find that it has no minimum wage, a point clarified by the German ambassador on a discussion on the German economy on PK subsequently!
So can it really be called a miracle if established workers have been forced to take very little by way of pay increases, a once great social welfare system has been destroyed to bits under Hartz IV rules, workers cannot usually retire until 68, workers pay AFAIK, relatively high taxes and many workers are effectively forced into doing low paid work, not for the good of their communities as in CE schemes here, but for the likes of Supermaxie!:mad:
To what extent will Angela try and superimpose all this madness on top of us and will she succeeed?
The retirement age is being phased in month by month (it goes up a month every year) so it will be another 20 years or so before it reaches 68.
Many workers are forced into low paid work also in USA and other countries.
The social welfare system has been reduced but workers who are laid off still get a percentage of their previous salary (e.g. 66% of net salary) for up to a year after being made redundant.
There are work schemes where people do stuff like e.g. try to help people at train stations but they're not allowed to do anything that might make 'real workers' redundant so what they can do is sort of circumscribed.
Also child care is much cheaper from an early age - the cost is typically less than 200 euro per month per child. Both parents are entitled to parental leave, though not as much as in Sweden.
Tax is high but it also includes compulsory health insurance and unemployment insurance.
On the other hand, there is no statutary redundancy payment in Germany. Also, there isn't really any equivalent to FAS for training (for better or worse :)).
 

Mackers

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Well seeing that a fair percentage of their dosh is made up of other countries paying them back loans and money to bond holders, would suggest it's real enough.
 

feedmelies

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While the rest of the developed world was enjoying precarious high living standards from a housing and credit bubble, the Germans were implementing austerity and labour reforms led by leading German companies, all the while being lectured by people like Tony Blair on how to run their economy.

I don't see any reason to suggest the current German Wirtschaftwunder is not based on good fundamentals. Perhaps if Merkel tried to impose labour reforms on us, we should welcome them.
 

feedmelies

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Well seeing that a fair percentage of their dosh is made up of other countries paying them back loans and money to bond holders, would suggest it's real enough.
While that may be true in the future, at the moment it is the other way around. They are giving out loans now.
 

stopdoingstuff

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While the rest of the developed world was enjoying precarious high living standards from a housing and credit bubble, the Germans were implementing austerity and labour reforms led by leading German companies, all the while being lectured by people like Tony Blair on how to run their economy.

I don't see any reason to suggest the current German Wirtschaftwunder is not based on good fundamentals. Perhaps if Merkel tried to impose labour reforms on us, we should welcome them.
Again what miracle? Look at their numbers- their growth is not exceptional in global terms or even in European terms. Miracle suggests that Germany is an outlier- it is not.
 

southwestkerry

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Most of Western Europe, the USA, Japan and Korea have had similar performances. The more recent "miracles" in South East Asia, China and India are equally as impressive. But the question he asked was about the "current" miracle, and I hold that it is far from miraculous.

100% correct.
SwK
 

Mackers

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While that may be true in the future, at the moment it is the other way around. They are giving out loans now.
I think you'll find their bond holders are raking it in at the present time. And the loans have interest attached. So no free lunch.
 

feedmelies

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Again what miracle? Look at their numbers- their growth is not exceptional in global terms or even in European terms. Miracle suggests that Germany is an outlier- it is not.
Their unemployment is at about 6%. They have a budget surplus. No other large western economy can boast this. Take into account that exports are a large proportion of their economy, and much of the rest of the world - their customers - are suffering from poor economic conditions - and you realise they are in pretty good shape.

Their growth may not be exceptional at the moment, but how fast would the USA, UK, France, Ireland grow if they imposed austerity to achieve a budget surplus?
 

Kevin Doyle

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But German workers are happy with this arrangement. They don't seek crazy pay increases, and in return they're happy with the persistently high employment and economic stability they have enjoyed for the last 50 years as a result of the broad economic consensus.

Why do trade union hacks insist that it's always all down to pay rates?
Trade Union Hacks?

You do know that Germany has probably the highest unionised workforce in the world? Its required by law to have a union rep on the board of a company.
 

feedmelies

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I think you'll find their bond holders are raking it in at the present time. And the loans have interest attached. So no free lunch.
Please provide evidence that German is currently a net receiver in terms of debts. As it stands, Ireland, Greece and Portugal are recipients of bailout funds, large proportions of which come from Germany. The deficits of these countries far exceed the amount paid to Anglo-bondholders - of which I am pretty sure the majority are not German.
 
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