Giving Germany New Strength
The new German government intends to kick off with a ruthlessly honest analysis of the serious economic and financial crisis. "And then we will draw the right consequences," announced Chancellor Angela Merkel speaking in the German Bundestag on November 10. In a government statement, she presented a five-point plan to this end.
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- Chancellor Merkel delivers the government statement in the Bundestag.
- (© REGIERUNGonline / Bergmann)
"Growth. Education. Cohesion. Leading Germany to New Strength." That is the title of the government statement.
The Federal Republic of Germany is currently going through the worst recession in its history. Growth has plummeted five times further than the hitherto harshest recession in the early 1970s. Major banks are still dependent on state assistance. "Germany is facing a harder test than at any time since reunification,” declared the Chancellor.
Angela Merkel announced the following five points of the government’s agenda:
- Overcome the consequences of the crisis
- Improve relations between citizens and government
- Respond appropriately to the changed demographic situation within society
- Regulate the way we deal with natural resources and establish a global regulatory framework
- Establish a new balance between liberty and security
General Motors must shoulder the main burden of restructuring Opel
Angela Merkel expressed her regret that the US company General Motors (GM) had pulled out of the sale of Opel to the investor Magna. She called on GM to present a convincing restructuring concept swiftly. Over a period of many months, she said, GM had failed to "meet its responsibilities as parent company”.
The Chancellor declared that she now expected GM to repay the bridging loan. The federal and state government were, however, willing in principle to consider applications for assistance, she continued. The Opel workforce has made major sacrifices and expected GM to act reliably. "GM has deeply disappointed them,” she noted.
Growth to overcome the crisis
Angela Merkel rejected the idea of drastic spending cuts, in spite of the high level of national debt. Next year the national budget is expected to run a deficit of 86 billion euros. To make good a deficit on this scale would require the largest package of cuts in the history of Germany.
That is not an option for the new government. It intends to put in place the preconditions for more growth.
Yesterday the Cabinet adopted the Growth Acceleration Law. It will free up 22 billion euros for Germans as of 1 January 2010.
"Hard work must be worthwhile again"
For 2011 the German government is planning another vigorous impetus for growth. To this end Angela Merkel announced income tax cuts. "We will also use this impetus to make structural long-term changes to the tax system."
The tax system is to become simple and fair with low taxes. This is the only way to restore Germans’ faith in the state. Children are to be treated the same as adults for tax purposes. The government aims to end the current system under which average earners are taxed disproportionately highly.
Angela Merkel wants to make it easier to offer fixed-term contracts. At the same time she spoke out against immorally low wages, but rejected across-the-board minimum wages. The principles of co-determination and free collective bargaining will not be touched.
The German government will once again extend the period for which short-term working allowance can be paid. This measure is the only thing that has kept unemployment down to comparatively respectable levels in Germany, said Angela Merkel.
The challenge posed by demographic change
Today more 65-year-olds than under 20-year-olds live in Germany. By 2020 the overall population will drop by 3.5 million. But the percentage of over 65-year-olds will continue to rise, with inevitable consequences for the social security and pensions systems.
The Chancellor asked her audience to refrain from knee-jerk reactions in the vein of demanding a decoupling of the costs of social security, because discussions of this sort would not be of any use. She announced a capital-covered add-on to the terminal care insurance.
Energy mix to counter climate change
The Chancellor warned of the danger that the UN Climate Chance Conference in Copenhagen next month might fail. The next decades will determine whether or not we can mitigate the consequences of climate change. "Any failure in Copenhagen would throw back climate policy by decades,” declared the Chancellor.
In particular she demanded that the USA redouble its efforts along with countries like China and India.
In Germany the government is putting its energy into promoting an energy mix. Nuclear energy will remain an indispensable part of this for a transitional period. For this reason, German nuclear reactors will be permitted to operate for longer.
