''Why? Because the Germans embrace socialism. They believe in an 'ordentliche sozialpolitik', even though all historical examples, modern economic theory, and even common sense say it's a bad idea. When people hold on to an idea like this despite all evidence running contrary they are no longer acting pragmatic or rational. They are consumed by an ideology''.
As already discussed, I am aware this point is difficult to tackle with. I believe, it is not a coincidence, that
Bismarck IIRC introduced the first social insurance worldwide in Germany. IMHO the idea of solidarity is deeply embedded in German culture. Socialism and fascism just took advantage of it. And while a 'modern welfare state' claims to benefit single members and in the end the whole society, it has run now out of control. Not only in Germany BTW., France needs some readjustments as well.
In Germany it started in 70/80 with Willy Brands champagne 'mehr Demokratie wagen', when Germany still was in a pretty healthy, financial shape. So they started pouring money into the social systems. An 'Erwartungshaltung' was building up, the state had to provide everything etc. Chancellor Schmidt already tried to steer against it. So did Kohl. It's true the unification with the socialistic eastern part did not improve things, quite to the contrary.
Imagine for a sec. the USA had to takeover a bankrupt country with about 25% of its own population and feed it through( well, more or less) built up its infrastructure,
integrate its social security system ( which basically meant, credit them their worthless 'Rentenansprüche' to the full,) and pay this all out of the pocket of the rest population. Of course the 'Erwartungshaltung' in East
Germany expected this and more. Would you like to work with Eastern European wages in Germany and have to pay the high cost of living over here. No, you wouldn't. So their wages had to go up. Which in turn did`t encourage big scale industry. They rather went to Eastern European states with cheap wages( German companies included).
The local unemployment rates are still over 20% in some areas.
IMHO you have to be careful, when you cite 10% or 11% general unemployment rate in Germany. The area in the former BRD, I'm currently living in, has about 6.7%. Now for argument sake : still pretty good ,despite all the socialistic burdens, isn't ? And when you believe the theory that, the higher the tax rate the bigger the numbers of tax avoidance cases it is still much better. Have you ever tried to get a 'handwerker' in some areas in German ? If they turn up at all - with a high probability - they will ask you for a 'non bill' job(IE.. no bill - no tax). There is plenty of 'Schwarzgeld' around. This, of course, doesn't appear in official statistics.
It comes still better: After the opening up of East Europe ( well, partly at least) there are plenty people around here , who you can hire. For them it is attractive, because they can make more money in 3 months than in the whole year in their home country. So you would have to reduce the unemployment rate again.
In short: the economy is in better shape as some official statistics might reflect. I'm living here now, so I get a reality check every day.
Hence my conclusion : The main economic problems we are currently facing in Germany are caused by unification and
a social system, that has been blown out of proportion. WE need to cut it back to the size it was during the times of 'Wirtschaftminister Ehrhard'. BTW our bureaucracy needs the same treatment. I hate to admit it, but Germany is the most over-regulated country, I have ever been working in. Luckily/unfortunately the country is not in sorry state as Britain was, when Thatcher came to power. Hence it is unrealistic to expect big changes. As already stated, the best chance is still, the CDU/ FDP gets a majority in the next election and then, I predict, you will be in for a surprise!
''Today, Germany under Merkel will take a more sound and realistic approach to security matters. Unlike Schroeder, she will not play games to score cheap political capital at an allies expense. Iraq is not the only example of where Schroeder did this. Missile defense was another example where the Schroeder administration more or less took a position that ran contrary even to Germany's OWN security interests and they knew the US would follow through with it, yet they bad mouthed it and pandered to the political left within Germany. As the elections were nearing Schroeder even tried to play games with the Iran crisis! This man did not even serve Germany's OWN interests. He served himself, and should be happy with his job at Gazprom today''
Well, I did neither vote for entertainer Schroeder nor for diva Fisher. I agree that their government has done a lot of damage to the Atlantic relations together with Chirac. Thankfully, both are gone now and the acceptance rates of Schroeder plummeted after this Gazprom deal, so I guess he is politically dead by now. Merkel has more room to manoeuvre in foreign affairs than in domestics. She is
definitely USA friendly and I think she has already proven this and will do it further. She has obviously managed to establish a good working relationship with your president, so sunnier relationship times seem to lay ahead!.