Thursday, August 13, 2009

Plan D, or How Germany Will Return to Full-Employment (According to Frank-Walter Steinmeier)

It seems that Germany's political parties have copied many things from the scrap book of last year's Obama campaign. One thing in particular that the Social Democrats and their candidate for the chancellery Frank-Walter Steinmeier took over is the promise that his policy will produce 4 million new jobs by 2020. In his PLAN D (or Deutschland-Plan) Steinmeier promises full employment, a goal that has not been mentioned in German politics for some time. He outlines particular industries in which these jobs will be created: 2 million Jobs in the Green Economy, another million in the health care sector, half a million in the creative sector (jobs in culture, the arts, music industry, or web design, etc.), and another half million in other service sectors. It is as simple as that plus a few more public investments in infrastructure, education, and research.

It seems that Germans have lost confidence in themselves and their political and business leaders, as well as in the idea that full employment combined with high social standards is still possible in times of globalization. Unemployment is the price they seem to believe one has to pay when having a tamed market economy in this world of capitalism and managed economies.

Right after being publicized the Deutschland-Plan was heavily criticized not only by political oppo-nents but also by economists and commentators. It is pretty hard to foresee how a certain policy will affect particular industries and how many new jobs will be created as an effect from such policies. It is even harder to foresee the negative effects a subsidy for one industry will have on others. In order to reach full employment one does not only need new jobs but additional jobs; therefore the net effect is what counts. Also the SPD - unlike the Left Party - knows that jobs are not created by governments but by businesses. It is therefore hard to see how a party that recently undid parts of its own 'Agenda 2010,' which was pushed through by the previous SPD Chancellor Schröder with the help of his then-chief of staff Steinmeier, can actually reach the goal of full employment. As the second in command within the grand coalition, Steinmeier agreed to take back some of the meas-ures that had begun to diminish the high structural unemployment in Germany. Furthermore, the minimum wage the SPD has pushed through for some industries and promises to widen if elected is no measure that will support the goal of full employment. Consequently it seems that the German public is not buying Steinmeier's Plan D. Even worse, they seem to ignore it.

Whatever one might think about the concrete plan by Steinmeier, setting a goal for full employment is important for the German debate. Other parties should not only criticize the plan but should explain whether and how their policies can reach full employment or openly admit that they do not seek to reach that goal. There is no reason why a reformed social market economy should not be able to create enough growth within the next decade to offer everyone a job who seeks work. Steinmeier's Deutschland-Plan should open the debate on how to get there. Instead it seems that within the biggest economic crisis since WW II Germans are surprisingly incurious about the campaigns only six weeks before the election.

The complete text (in German only) of "Die Arbeit von Morgen - Politik für das nächste Jahrzehnt" can be found here.

--Tim Stuchtey

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