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Germany's Economic Problems

• The Economist: The sad lack of reformers in Germany, even on the right: "The economy is in its best shape for several years, in part thanks to labour-market, tax and other reforms pushed through by the previous government and by the grand coalition of Christian and Social Democrats (CDU and SPD). Yet the reformers are on the defensive."

• The Economist: German inequality: "The country is no longer the equitable middle-class society of its dreams. Rising inequality has led to two debates: one about bourgeois values, the other about an underclass. The first has long simmered. The second is causing a stir reminiscent of last year's 'locust' debate over foreign investors."

• Sign and Sight (translating Die Zeit): Berlin: capital of the underclass: "on Berlin, the urban insult to Germany's faith in hard work."

• Houston Chronicle: Berlin facing acute Santa shortage just before Christmas. Don Surber's comment: A German take a job? Ho-ho-ho

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Don S on :

"They also stand for cultural conservatism and stability, constituting a “power to protect slowness”, in the words of Franz Walter, a political analyst." Ahn [i]now[/i] I understand what's going in Southern Afghanistan. The Germans are coming. Just give them a little time!

Anonymous on :

Berlin: capital of the underclass: Poor but sexy! Oh yes it is! Cutting money and force them to close their Operas/Museums/Theatres wont help in any way. Of course it is the bavarians crying out loud how tax money is being wasted! They always forget how they sucked on the nipples of solidarity for several decades. Bavaria was a poor and underdeveloped area after ww2. It was the rest of germany who helped them to become what they are today. Dear Bavaria: have some dignity and give what you once received! So far for bavaria. Yes, Berlin is poor and sexy. If it weren't for the cheap rents and the low costs, Berlin would merely be a big but average german city. It's sexy because a lot of young people who just can't afford living in Hamburg/Munich/Cologne (no one want's to live in Düsseldorf) choose to live in Berlin. That's Berlins biggest resource. Turn that city into an expensive place like London and you'll have a rich but boring place like Wiesbaden. And let's have a closer look at the western 'Bundesländer': Frankfurt has the 'Bundesbank'; does anyone remember where this bank was located before this country got sliced into two parts? How about the 'Bundeskriminalamt'? It's located in Wiesbaden today ... now where has it been before? Berlin was a bustling industry capital before 1945. After that, most of the big companies headed for the west of germany for obvious reasons. How dare those areas in the west, who definitely did draw a lot of profit out of this development, accuse Berlin of lazyness? We do have an attractive Capital - even in international standards. A magnet to young and creative people, not only from Germany. Instead of being proud about it we are of course complaining about the money being "wasted". Give me a break! If it weren't for this great city, I'd have left this country years ago. and yes, I am a digital bohemian and I do live in this wonderful city! But mind you - I grew up in Bavaria so I am able to compare. my 2 cents. cheers, a Berliner

Fuchur on :

Well, the Bavarian perspective is a bit different... "Cutting money and force them to close their Operas/Museums/Theatres wont help in any way." It´s that kind of attitude that limits my sympathy for Berlin´s plight considerably. The reason for the Berlin´s problems is not lack of solidarity from the rest of Germany. The reason is disastrous mismanagement and corruption. "How dare those areas in the west, who definitely did draw a lot of profit out of this development, accuse Berlin of lazyness?" Let´s put it the other way around: How dare Berlin accuse the rest of Germany of lack of solidarity? The West pumped billions of DM into West Berlin during the Cold War. After the reunification, Berlin became the capital of Germany. So don´t tell us you didn´t get any breaks. You got loads, and you blew it. And now your dear Lord Mayor tells us: "So what. We are broke, but we don´t care. We´ll still spend like crazy, and you don´t have a choice but to send us more money. " Sorry, but that´s not gonna work (and it´s a shame that it took the Bundesverfassungsgericht to make that clear to him ).

Zyme on :

Berlin is the perfect example of what happens when responsibility is shared by too many. In a centralized country, the government can do mistakes. In a country full of countries within, the number of possible mistakes are multiplied as all these little countries` governments get their chance to fail as well. This is one of the main reasons why I strongly argue for a revocation of the federal system.

Don S on :

"Yes, Berlin is poor and sexy. If it weren't for the cheap rents and the low costs, Berlin would merely be a big but average german city. It's sexy because a lot of young people who just can't afford living in Hamburg/Munich/Cologne (no one want's to live in Düsseldorf) choose to live in Berlin. That's Berlins biggest resource. Turn that city into an expensive place like London and you'll have a rich but boring place like Wiesbaden." Hmmm. I know little about Berlin but I don't think I can agree. I live in London, which is expensive as hell as you say - but is decidedly not 'rich but boring'! Manhattan is rich but not boring nor is Paris. As a cultural capital I think Berlin shares more in common with these cities than someplace like Weisbaden. Nevertheless New York and London are not quite what they once were. You can read about the halycon days of the 60's in Greenich villiage and Chelsea, with all the brilliant young (and poor) artists. Poor artists don't tend to live in those places any more - they are now quite posh. The *new* Bob Dylans don't live there - stockbrokers cutting a figure or media types are more like it. Old factory cities like Newcastle and Antwerp seem to draw quite a few artists whereas they would once have been avoided like the plague. Cheap factory lofts and large ports are the big draw I think. Nevertheless I fundamentally disagree with you're premise. As Berlin ages and grows rich it is unlikely to morph into another Frankfurt or Weisbaden. New York is more like it, I think....

Zyme on :

Berlin like New York? Come on.. there won´t be any skyline district in Berlin like in New York. With its aristocratic sights and places, it will be a lot more like Vienna, Paris, Munich or St. Petersburg, I assume.

Don S on :

Zyme, At a superficial level the fiscal crisis in Berlin today resembles the mid-70's fiscal crisis in New York. There are major differences of course, the most obvious one being that Manhattan was and is the centre of the US financial industry and therefore potentially a generator of great wealth. I'm not sure what Berlin's biggest money-spinners are but surely one cannot compare it to Washington, D.C? Berlin seems from a distance to be potentially Germany's major media centre and perhaps an arts centre - as New York, Paris, and London are for other countries. So what other city can Berlin be compared with? Surely it's not like Rome. Perhaps a bit like Prague but that is not predictive? The best comparison seems to me to be that it's like New York or London but minus the vibrant financial sectors in those cities. But increasingly important in government. For now. Who knows what it may become? But what do I know? Not much....

joe on :

I don’t understand all this gloom. Is it possible this is much to do about nothing? German consumer confidence is the highest it has been in 15 years. Unemployment is at a 4 year low at 9.6%. GDP growth for 2006 is projected to be a rocketing 2.6% There seems little to worry about with the health of the social welfare state. Am I once again missing something?

mbast on :

"Am I once again missing something?" Nope, I don't think you are in this case. Latest news: unemployment dropped under 4 million for the first time in four years. I remember times not so long ago when unemployment was over 5 million.

joe on :

So why all the gloomy articles?

mbast on :

Good question. No idea, really. I guess the whole thing is in part due to some scholar or other having decreed that Germany's economy is bad and Germany's economy proving him wrong. Plus we've been so accustomed to bad news these last years that a bit of good news tends to go unnoticed.

Don S on :

I think it's that lovable German sense of optimism coming to the fore. There has to be a german phrase for that characteristic sense of depression?.....

joe on :

Enjoy the moment

Volker on :

We don't want the british to be jealous of us, as in the "Wirtschaftswunder" days. Therefore BAD news every day. Just joking my british friends, I love you all, you can't play football but I love you.

Zyme on :

And who is braking the german economical boost? http://www.spiegel.de/wirtschaft/0,1518,452058,00.html It´s america of course! *just-joking* :)

Don S on :

Not America, Zyme. To say so would be guilty of anti-Americanism. No, let's take the high road: ;) It's Booosh! Booosh did it!

Zyme on :

Btw I found this article about Trade with Iran: http://medienkritik.typepad.com/blog/2006/11/germany_and_now.html It seems like the most important trading partners of Iran are Germany (for import) and Japan (for export). Now imagine: If someone had told the participants of the Potsdam Conference in 1945 this was going to be the situation in 2006 - would they have believed it? :)

influx on :

Looks like US consumers are helping out German car companies: http://www.spiegel.de/auto/aktuell/0,1518,452129,00.html Even Porsche sold seven percent more than last year. I guess Porsche's CEO's alleged anti-American comments didn't stop people from buying.

cody on :

this is an awsome page

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