6 ms·

> Nearly 20 years ago, Germany overcame its reputation as the “sick man of Europe” with a package of ambitious labor market reforms Does anyone know what those

> Nearly 20 years ago, Germany overcame its reputation as the “sick man of Europe” with a package of ambitious labor market reforms Does anyone know what those were?

Dunedan 3y ago
That's a reference to the so-called "Agenda 2010": https://en.wikipedia.org/wiki/Agenda_2010 https://en.wikipedia.org/wiki/Agenda_2010
nieksand 3y ago
https://www.imf.org/external/pubs/ft/wp/2015/wp15162.pdf https://www.imf.org/external/pubs/ft/wp/2015/wp15162.pdf "In 2003–05, Germany undertook extensive labor market reforms which were followed by a large and persistent decline in unemployment. Key elements of the reforms were a drastic cut in benefits for the long-term unemployed and tighter job search and acceptance obligations."
- ahartmetz 3y ago
  Also working poor.
WastingMyTime89 3y ago
The Hartz reforms are fairly famous, yes. It’s mostly social dumping. Forced contraction of actual wages through reform of the benefits plans. It’s important to note that they are overall poor reforms and should have been nullified by the German money value shifting due to the knock off effect on the saving rate. This didn’t happen because they were put in place at the same time as the Euro and the overall imbalance in the union allowed Germany to keep an undervalued currency. In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since.
- lo_zamoyski 3y ago
  > In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since. Those who like to bully the poorer members of the Union on the grounds that they're being bankrolled by the the wealthier states would be wise to take note of this, and take a more intelligent and informed view of EU "subsidies". The idea that the wealthier member states are showering these countries with funds out of the disinterested goodness of their hearts is not only ignorant of how these cash flows actually work in the grander scheme of the movement of money, but also preposterously naive. The power balance is shifting in Europe against this crypto-germanocentrism, however.
  - imtringued 3y ago
    This sentiment is so common in Germany. Everyone blames the European "south" for Germany's problems as if Germany was some sort of hero doing all the work. The Greek economic crisis is a classic example. German banks mess up when they lend too much money to Greece, Germany does a bailout for "Greece", the money actually goes back to German banks. Then people have this perception as if they somehow paid for all the social services bought with the borrowed money. No, Greece is still in debt. You might complain about forgone interest but that is on the lender, who is not doing his job properly.
    - adasdasdas 3y ago
      Why are you only talking about the lender's fault when it comes to bad loans.
      - rfrey 3y ago
        Because assessing and assuming risk is literally their entire reason to exist.
        adasdasdas 3y ago
        Why doesn't the borrower assume responsibility for taking risky loans?
- oezi 3y ago
  Why should the reforms be nullified by a change in saving rates? Hartz IV reforms pushed unemployed people back to work by reducing long term unemployment benefits to 400 EUR + rent. This certainly reduced purchasing power first (by reducing available money) but also quickly freed up social spending as employment rates soared.
  - WastingMyTime89 3y ago
    That’s a classical and expected corollary to social dumping reforms intended to boost competitiveness. There is less money invested inside your own economy (that’s what the saving rate is) as you have intentionally made people poorer which leads to an influx of foreign capital propping up your currency and nullifying the advantage you were expecting on the international market. As mentioned before Germany whose economy is extremely unbalanced and wouldn’t be viable if it used its own currency was shielded at the cost of killing the competitiveness of the poorest union members.
imtringued 3y ago
The strategy Germany is following is to cut unit labor costs below Greece aka Germany is competing on price with Eastern European countries. This may get you the "Exportweltmeister" trophy but is is just that, a trophy. It doesn't actually benefit you that much.

> Nearly 20 years ago, Germany overcame its reputation as the “sick man of Europe” with a package of ambitious labor market reforms Does anyone know what those were?

Dunedan 3y ago

That's a reference to the so-called "Agenda 2010": https://en.wikipedia.org/wiki/Agenda_2010 https://en.wikipedia.org/wiki/Agenda_2010

nieksand 3y ago

https://www.imf.org/external/pubs/ft/wp/2015/wp15162.pdf https://www.imf.org/external/pubs/ft/wp/2015/wp15162.pdf "In 2003–05, Germany undertook extensive labor market reforms which were followed by a large and persistent decline in unemployment. Key elements of the reforms were a drastic cut in benefits for the long-term unemployed and tighter job search and acceptance obligations."

ahartmetz 3y ago
Also working poor.

WastingMyTime89 3y ago

The Hartz reforms are fairly famous, yes. It’s mostly social dumping. Forced contraction of actual wages through reform of the benefits plans. It’s important to note that they are overall poor reforms and should have been nullified by the German money value shifting due to the knock off effect on the saving rate. This didn’t happen because they were put in place at the same time as the Euro and the overall imbalance in the union allowed Germany to keep an undervalued currency. In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since.

lo_zamoyski 3y ago
> In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since. Those who like to bully the poorer members of the Union on the grounds that they're being bankrolled by the the wealthier states would be wise to take note of this, and take a more intelligent and informed view of EU "subsidies". The idea that the wealthier member states are showering these countries with funds out of the disinterested goodness of their hearts is not only ignorant of how these cash flows actually work in the grander scheme of the movement of money, but also preposterously naive. The power balance is shifting in Europe against this crypto-germanocentrism, however.
- imtringued 3y ago
  This sentiment is so common in Germany. Everyone blames the European "south" for Germany's problems as if Germany was some sort of hero doing all the work. The Greek economic crisis is a classic example. German banks mess up when they lend too much money to Greece, Germany does a bailout for "Greece", the money actually goes back to German banks. Then people have this perception as if they somehow paid for all the social services bought with the borrowed money. No, Greece is still in debt. You might complain about forgone interest but that is on the lender, who is not doing his job properly.
  - adasdasdas 3y ago
    Why are you only talking about the lender's fault when it comes to bad loans.
    - rfrey 3y ago
      Because assessing and assuming risk is literally their entire reason to exist.
      - adasdasdas 3y ago
        Why doesn't the borrower assume responsibility for taking risky loans?
oezi 3y ago
Why should the reforms be nullified by a change in saving rates? Hartz IV reforms pushed unemployed people back to work by reducing long term unemployment benefits to 400 EUR + rent. This certainly reduced purchasing power first (by reducing available money) but also quickly freed up social spending as employment rates soared.
- WastingMyTime89 3y ago
  That’s a classical and expected corollary to social dumping reforms intended to boost competitiveness. There is less money invested inside your own economy (that’s what the saving rate is) as you have intentionally made people poorer which leads to an influx of foreign capital propping up your currency and nullifying the advantage you were expecting on the international market. As mentioned before Germany whose economy is extremely unbalanced and wouldn’t be viable if it used its own currency was shielded at the cost of killing the competitiveness of the poorest union members.

imtringued 3y ago

The strategy Germany is following is to cut unit labor costs below Greece aka Germany is competing on price with Eastern European countries. This may get you the "Exportweltmeister" trophy but is is just that, a trophy. It doesn't actually benefit you that much.