News and views from around the world.
News and Views From Around the World
 

Americas Africa Middle East Europe Asia
Click an area of the map for regional reports.
Asia
Americas
Africa
Europe
Middle East




Table of Contents
Subscribe here
Give a Gift
Customer Service

Classroom Use
Students click here






  From the July 2001 issue of World Press Review (VOL.48, No.7)

Out of Step

Matthew Fisher, The Toronto Sun (conservative), Toronto, Canada
May 7, 2001

The view from my hotel room in Hannover is dominated by the structures put up for a world’s fair last year, which are now to be used as the centerpiece of an annual trade fair. There is nothing at all to recommend this view. Except for a few graceful energy-saving windmills, the architecture is all glass and steel. It consists of sprawling low-rise boxes, rectangles, and tent-like canopies intersected at right angles by broad avenues bordered by shrubs, which will begin to look like trees in 20 or 30 years.

The Hannover Messe [Fair] is supposed to represent a dynamic slice of the new Germany. But it feels a lot like the old one. Although there is not a soldier or a policeman in sight, the massive scale of the project and its awkward sterility seem to have been designed to demonstrate the kind of faithless confidence in heavy machinery that Germans became inordinately fond of in the 1930s. The real difficulty is that the Hannover Messe does not feel like it was purposely built to accommodate the goods and ideas of the 21st century. It seems to have been created to display tractors, turbines, and smelters rather than computers, fiber optics, satellites, and other sleek products of the information age.

The bleak vista offered from my hotel room suggests that Germany is out of step with the economies of many of its western European partners and is falling further and further behind the more dynamic economies of Asia and North America. Statistics confirm that the German economy has grown by only 1.5 percent a year for the past decade and its workforce far more slowly. This puts Germany well behind most other European Union countries, to say nothing of Canada and the United States, which have seen phenomenal growth since 1990, and there is nothing to suggest that Germany will turn around any time soon. One big reason is that West Germany has had a difficult time swallowing East Germany. Unemployment in the East is 17 percent. That sorry number reveals hundreds of thousands of older workers who can never be retrained and hides hundreds of thousands of others who are receiving government subsidies to train there for jobs that will probably never exist.

While Finland, Ireland, and the Netherlands have been nimbly reinventing themselves as centers of high-tech innovation, Germany plods along by exporting trustworthy standbys such as luxury automobiles and industrial equipment. Such products still sell in some markets because they are of high quality, but Asian competitors have sorted out their quality problems, with cheaper labor and none of the social benefits and vacation packages that Germany’s heavily unionized workers have. Global competitive pressures have forced Germany’s big unions to accept smaller pay offers. But businesses in other countries can adapt and transform themselves and their workforces with relative ease. Because of rigid German labor laws affecting change, here it is a long, tortuous process.

Yet another complicating factor is that in its bid to be number one in Eastern Europe, Germany rushed in with far more of its money than any other country. The losses, particularly in Russia, have been enormous.

For all that, Germany remains Europe’s biggest economy and its government arguably the most enthusiastic supporter of European economic and administrative integration. Chancellor Gerhard Schröder may be even more pro-Europe than his predecessor, Helmut Kohl. Schröder sees Germany as Europe’s natural leader and arbiter.

This is fine with some of the EU’s smaller members, who receive EU subsidies that Germans pay for. Also willing to go along are prospective EU members from Eastern Europe who hope to soon soak up some of the German money themselves. Looking out at the Hannover Messe, it is an open question whether Germany will ever have the flexibility to match its huge ambitions.



Back
Home
Related Items:
A Lackluster Economic Report Card "Germany's economic upswing has come to an end," writes Bettina Bonde, in Frankfurter Allgemeine Zeitung.

Poverty Report Unveils Widening Disparities (Neue Zürcher Zeitung, Zurich)

The Deutche Bundesbank's website offers real-time economic data. (German and English)

Recent economic indicators from the German Federal Statistics Office. (German and English)