Eurozone crisis

Berlin to save Europe like it saved GDR

Published on 28 May 2012 at 13:20

“Herman, you should at least say that some at this table are of a different opinion!” Angela Merkel burst out at EU Council President Herman Van Rompuy last Wednesday at the informal summit in Brussels, as reported by Der Spiegel. Rompuy had just affirmed that there should be no more “taboos” in the EU’s economic strategy and that he would “also examine the issue of Eurobonds” that has been rejected by Germany.

Facing unprecedented resistance against her policy of austerity within the union, the Chancellor is drafting her own response to the “growth strategy” of her main opponent, French President François Hollande, notes the German weekly, reporting on a six-point project currently circulating in Berlin that is supposed to get Europe back on its feet by making it... more German. Taking inspiration both from reforms in East Germany following reunification and by the general program of flexible employment dating back to 2003 called “Agenda 2010", the Chancellor wants to save the euro through structural reforms —

Merkel wants to launch Europe-wide programs to promote start-ups and small and mid-sized business, like the programs offered by the KfW development bank in Germany.... Merkel also wants EU countries with high unemployment to use Germany as a model in reforming their labour markets.... This would mean relaxing protections against wrongful dismissal and introducing more limited employment circumstances, called “mini-jobs” in Germany, with lower tax and contribution burdens [...] These countries would also be expected to develop a dual education system.... [In the countries of the South, where many companies enjoy state protection], privatisation funds like those that existed in East Germany will be created. [...] The advisors also recommend the establishment of so-called special economic zones, like the ones that once ushered in China's economic ascent. Finally, the Germans want Europe's southern countries to invest more in renewable energy, reduce tax barriers and promote worker mobility.

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