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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: AugustWest who wrote (2381)	9/23/2002 4:07:35 PM
From: MulhollandDrive	Read Replies (3) \| Respond to of 57110

right now i have a happy case of schadenfruede (btw..i'm boycotting german goods) German Businesses Want Economic Aid By DAVID McHUGH 09/23/2002 14:35:59 EST BERLIN (AP) - Business leaders demanded Monday that Chancellor Gerhard Schroeder use his narrow election victory to tackle painful changes in the country's costly labor regulations and stimulate Europe's biggest economy. As the sun rose on Schroeder's victory, Germany's Chamber of Industry and Commerce and other business groups issued a chorus of pleas for more flexibilty to hire and fire and relief from heavy payroll taxes and mandated benefits. "The labor market is our Achilles' heel," chamber president Ludwig Georg Braun said in a statement. "The competitiveness of Germany as a business location must be strengthened through a reduction in benefit costs." "Only business can create jobs, and for that we need to change the economic environment," said Diether Klingelnberg, president of the German Machine-Building Association. "Germany should pull the train of the European economy, not wreck it." But leaders of the country's leading industrial union, 1.7-million member IG Metall, issued a none-too-subtle warning to Schroeder. "The Social Democrats won their votes with the workers, not in the center," union head Klaus Zwickel said in a statement that urged a focus on "jobs and social justice." Schroeder had blamed his failure to fulfill a pledge four years ago to slash unemployment in part on the lagging world economy and on the difficulty in balancing interests in Germany's consensus-based economy, based on broad agreement between labor, business and government. Economists and business leaders were skeptical as to whether Schroeder - with a razor-thin majority - was any more likely to shake up the business environment this time. Schroeder's remarks at a news conference Monday leaned toward preserving the country's status quo of generous benefits and few layoffs, saying his agenda for the next four years was "renewal and social cohesion - what we have described as the German way." He also called for "a sensible balance between the interests of capital and the interest of working people." Business groups say the way things stand robs the economy of jobs. German industrial labor is the most expensive in the world because high benefits are either mandated by law or negotiated by strong unions. It's costly to lay people off, with the result that companies are reluctant to hire in good times. During the campaign, he seized on proposals made by a government-appointed commission on labor market reform. It suggested turning unemployment offices into temporary staffing agencies, putting more pressure on people to take available positions and reducing red tape for the self-employed. Schroeder has backed the "social market" economy that Germany has maintained since World War II, and on the campaign trail criticized the excesses of U.S.-style capitalism. Still, the German system is showing cracks, with the economy growing only 0.3 percent in the first and second quarters of this year after shrinking in the last half of 2001. Christoph Hausen, an economist at Commerzbank in Frankfurt, said the government was unlikely to heed business groups' pleas. "It is clear from the new government being the old government there is not a lot of change in economic policy to be expected," he said. "I don't think we can really expect a business-oriented course." Klingelnberg, however, said he hoped the government would eventually change its tune. "The economic situation gets worse and worse," he said. "I hope that before it gets worse the government will do something about it."