''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!
Reference the economy in Germany-
Germany is in serious trouble. It has been for years, now the reality is beginning to soak into the public’s consciousness and the denial that was practiced for years (As today they still are in light of the Islamic threat) is fading away to a reality that is becoming undeniable.
Things will get worse before they get better. Nothing will get ‘substantially’ better until the Germans change their mode of operation. High taxes, massive bureaucracy, large subsidies, high degree of state participation in the economy, large elaborate inefficient and abused governmental services have created the mess there is today. Basically, Germany NEEDS a Ronald Reagan or Thatcher, but unlike the UK and US which wanted reform Germany does not. Most Germans would agree there are problems but few would draw the conclusions that supply side economics and a minimalist government are the answer. In fact so far the public has supported ‘more’ government and ‘more’ taxes as a way to patch up all the wholes in this sieve called an ‘ordentliche sozialpolitik’. NOTHING that truly addresses the systemic causes of Germany’s economic trouble is being addressed.
The ONLY thing keeping Germany afloat today that has any positive indication is its exports. Now, imagine your #2 export partner the US, has an economy that begins to cool - As it is. Do you realize that nearly every second Porsche built goes to the US? Hint, it’s luxury products and articles that get hit first and hardest. What impact will the US withdraw military and other governmental agencies have from Germany? Minimal, but nonetheless some. Approximately 30 towns/communities will be affected by this. The US military historically were themselves a near 10 Billion US dollar money injection into the German economy.
As to cheap labor in Germany- Those investing in Europe today are looking at nations like Poland, Check Republic, Slovenia, Hungary today. Germany in all reality is a EXPENSIVE place to operate out of. While Germany still has world wide some of the highest and best productivity rates (Among the top 5 or so), the ‘Lohnnebenkosten’ in social costs are also some of the least attractive. Just look at what an employer has to cost share in medical, retirement and other costs! Costs in energy, taxes, water, road usage…….are all high in reality. But it gets worse. Highly regulated, slow bureaucracies and massive environmental constraints have squeezed certain industries out of Germany all together. Find a place that still does Zink work in Germany. Ask Siemens how the nuclear power industry is going. Within Europe Germany is NO low cost nation to produce in, and on the world stage it’s one of the more expensive ones. The US military leaving Germany to a large degree is nothing but a business decision and while the average German does not see it and maybe even welcomes this trend, the same forces that are making them choose to leave are also making others leave. Continental tires left in the early 90s to the Check Republic for example. If you buy a ML Mercedes in Germany, that car was built in the US.
The point is that long term even in this last bastion of hope the Germans have has storm clouds on the horizon.
Things will not go to worse over night and implode. But as a nation Germany will just malinger. The rest of the world in the meantime is moving on without them.
As to language and influence- It’s not even the US I was talking about. Go to the US and into a McDonalds. Get a happy meal for you kid and look at the languages on the package: English, French, Spanish. German? Nope. My wife is a foreign language teacher for German. German is among the smallest programs with both French and Spanish having far greater participation. Hell, some schools have larger programs in Asian languages than German! It’s not just English and the US my friend. It’s not the dominance of the US which you seem to believe, it’s the fading away of Germany even in relation to others! It’s Germany vs. everyone, and you’re still fading away from the world stage. It says something when Latin and German have about the same number enrolled in class. Compare Germany with Brazil in economic terms: 1.6 trillion 2.4% growth to Germany 2.3 trillion .9% growth (Real net growth). What about Russia with 1.6 Trillion and 6.4% growth? Let me make this real simple- Today Germany is place 3 (US/Japan). In 20 years Germany will be place 5 (China/India). In 30 years Germany will be place 7 (Russia/Brazil) - get it? This is not based on a forecast of only some trend of the last year but over what has been happening for a decade now. Just like you birthrate which is creating a negative growth has been a longer trend, so has Germany’s loss in ground to others on the world wide stage.
Germany is fading away in its significance in EVERY way - It economics, security, political influence and even culturally. The decrease in interest in German as a language world wide is but one of many many indicators of this trend.