“Museum for botched reforms”
Employer President takes on Scholz
Von reuters, dpa, t-online
October 22, 2024 – 11:55 a.mReading time: 3 min.
At the German Employers’ Day, Chancellor Scholz had to listen to harsh criticism. He passes the blame for the economic misery on to Brussels.
Chancellor Olaf Scholz (SPD) has described EU regulation as one of the major problems for the German economy. What is needed in the EU is “finally a reduction in bureaucracy, and on a large scale,” said the Chancellor on Tuesday at the German Employers’ Day. It is right for the EU to ensure that common rules apply in the EU internal market. “But things came out that make you wonder,” he criticized.
As an example, he cited 1,500 reporting points on the topic of sustainability that the EU specifies. “Somehow the horses got away,” added Scholz. The federal government is trying to reduce bureaucracy in many places. He promised that the federal government would tackle the controversial Supply Chain Care Act this year. Read more about this here.
Scholz also criticized increasing protectionism. “We need more trade agreements and fewer tariffs,” he said, also alluding to the dispute with the EU Commission over the imposition of punitive tariffs against China. Thirdly, the EU Commission has the completion of the Capital Markets Union as a major task of its new legislative period.
Employer President Rainer Dulger sharply criticized the traffic light government’s course in his speech – and identified a completely different culprit for the weakening German economy than Scholz. “The economy is shrinking. Unemployment is rising. Germany has become less attractive as a location for investors,” complained Dulger.
“Compared to the past few months, awareness of the problem in this federal government seems to have at least increased,” said Dulger. There has been progress in the areas of skilled immigration and de-bureaucratization. But that is not enough. “You have to develop competitiveness. You can’t subsidize it,” he said.
In addition to digitalization, subsidized business start-ups and limited social security contributions, Dulger also sees a need for action when it comes to citizens’ money. The “failed citizen’s benefit reform” must be corrected. According to Dulger, it slows down more than it helps. “Pension Package II belongs in the museum of screwed-up reforms,” he demanded. Incentives for early retirement should be reduced; work must also be attractive beyond retirement age.
Dulger also spoke out in favor of regulated migration into the labor market. He warned of a “downward spiral” if people have the impression that politics cannot or does not want to solve problems – and one of these problems is migration. It is necessary to separate regulated and unregulated migration. It is good “that the state is now showing its presence at the borders,” he said, referring to the recently expanded controls.
Scholz sees Germany already on the right track. Germany is still a strong country. With reference to his planned pact for industrial jobs, the Chancellor appealed that the country should not be talked badly about: “We have to get out of this unpleasant situation together, in which bad numbers lead to bad mood – and bad mood leads to even more bad numbers.”
Similar to Dulger, he called for consistent immigration of workers due to demographic change. Almost all European countries would shrink in the coming years. “Germany can be the one non-English-speaking country to prevent this,” emphasized the Chancellor with regard to the immigration law. Because additional wage costs are currently rising instead of falling, the social security systems also have to become “more efficient,” Scholz also announced. He also justified Health Minister Karl Lauterbach’s controversial hospital reform.
Overall, we need to make better use of the workforce potential. To this end, the government has decided on a number of incentives, for example so that older workers can retire later if they want to. The Chancellor, however, rejected raising the official retirement age. Overall, more hours would have to be worked, he said, referring to part-time work, for example.