As Germany builds up to its mid-September election, many hope the landmark vote will lead to a major makeover of Europe's biggest economy.
Optimism that the early election might help to break the deadlock over reform has already helped to power the Frankfurt stock market to highs not seen since the New Economy boom about five years ago.
With the opposition Christian Democrat-Christian Social Union (CDU-CSU) in control of both houses of parliament and opinion polls pointing to opposition chancellor candidate Angela Merkel as favorite to win, expectations have been growing that a Merkel victory could trigger a quick round of reforms.
But while Chancellor Gerhard Schroeder has vowed to press on with his Agenda 2010 welfare and labor market reforms, many economists doubt a Merkel-led government would introduce large-scale changes.
"Even if there is a change in government, it is unlikely to result in a big reform push," Morgan Stanley economist Elga Bartsch wrote in a note to clients.
"The CDU-CSU election platform essentially proposes to continue with the gradual reforms pursued thus far by Chancellor Schroeder with the Agenda 2010," she wrote.
Equally troubling for those betting on reforms is that the election rhetoric seems to have largely skirted around the critical issue facing Germany -- how to revamp the country's fragile and inflexible labor market to spur job growth.
This is even more surprising with unemployment standing near a post-World War II high of 11.5 percent and the steady erosion of support for Schroeder's Social Democrat-led government over its perceived failure to address high unemployment. This is believed to be the key reason behind the push to hold a snap election.
Instead, when it comes to reform, a lot of the election talk has been about tax -- whether to increase VAT, whether high income earners should be hit with a special surcharge and what rate of corporate tax should be charged.
Even the centerpiece of Merkel's campaign platform, to cut Germany's high non-wage costs, is to be funded by a highly controversial plan to hike the nation's VAT rate by two percentage points. The member of Merkel's shadow cabinet drawing most media attention is Paul Kirchhof, a tax expert.
But could it be that the magnitude of the changes needed to boost hiring in the country are so enormous that the political leadership prefers to focus on tax rather than delving too deeply into the specifics of labor market reform for fear of alarming voters.
Many economists believe that the country's still very restrictive hire-and-fire labor laws (the so-called Kuendigungsschutzgesetz) must be rolled back if more flexibility is to be injected into the labor market.
A recent report by the Paris-based Organization for Economic Cooperation and Development on unemployment concluded that tough employment laws discouraged firms from hiring, while fewer people lost their jobs.
It also acknowledged that reforming the labor market was not an easy task.
"The feasibility of labor market reforms can be hindered by the fact that they often entail short-run costs, while their benefits typically take more time to materialize," the report said.
results clear
However, the results of a more flexible labor market are clear enough. The OECD estimated that the US's more flexible labor rules mean that the growth rate in the world's biggest economy is 3.25 percent compared to 1.7 percent in Germany and its 11 eurozone partners.
But many employers, especially small-to-medium-sized companies, say that they are very reluctant to take on new workers because Germany's redundancy laws make it very difficult and costly to downsize if their business hits a soft patch.
Viewed from outside Germany, companies seeking to invest or to expand their business operations in the nation see the Kuendigungsschutz as a major obstacle to hiring.
"We don't like employing more people [in Germany] because we are not sure if we can fire them after the end of particular projects," said Petr Manas, business development director of a Czech IT firm, LCS International.
Schroeder has already removed the Kuendigungsschutz for companies employing up to 10 workers. Merkel's conservative Christian Democrats are now proposing to extend the exemption to include firms employing up to 20 people.
But how this might be achieved or how the German labor market might be further liberalized have so far rarely featured in the election debate.
Apart from risking a backlash from voters no-one seems to really know what would happen if the rigid job protection laws, which cover about 60 percent of the workforce, were suddenly lifted or scaled back.
It is a question that economists in Germany have been grappling with for some time. In the meantime, however, Germany's employers and to an extent workers fighting to save their jobs appear to have taken matters into their own hands.
Spearheaded by companies in Germany's hard-pressed former communist east, businesses across the country have been simply abandoning the nation's long-established industry wage bargaining system and opting to negotiate pay deals on a more flexible company basis.
Before 1945, the most widely spoken language in Taiwan was Tai-gi (also known as Taiwanese, Taiwanese Hokkien or Hoklo). However, due to almost a century of language repression policies, many Taiwanese believe that Tai-gi is at risk of disappearing. To understand this crisis, I interviewed academics and activists about Taiwan’s history of language repression, the major challenges of revitalizing Tai-gi and their policy recommendations. Although Taiwanese were pressured to speak Japanese when Taiwan became a Japanese colony in 1895, most managed to keep their heritage languages alive in their homes. However, starting in 1949, when the Chinese Nationalist Party (KMT) enacted martial law
“Si ambulat loquitur tetrissitatque sicut anas, anas est” is, in customary international law, the three-part test of anatine ambulation, articulation and tetrissitation. And it is essential to Taiwan’s existence. Apocryphally, it can be traced as far back as Suetonius (蘇埃托尼烏斯) in late first-century Rome. Alas, Suetonius was only talking about ducks (anas). But this self-evident principle was codified as a four-part test at the Montevideo Convention in 1934, to which the United States is a party. Article One: “The state as a person of international law should possess the following qualifications: a) a permanent population; b) a defined territory; c) government;
Chinese agents often target Taiwanese officials who are motivated by financial gain rather than ideology, while people who are found guilty of spying face lenient punishments in Taiwan, a researcher said on Tuesday. While the law says that foreign agents can be sentenced to death, people who are convicted of spying for Beijing often serve less than nine months in prison because Taiwan does not formally recognize China as a foreign nation, Institute for National Defense and Security Research fellow Su Tzu-yun (蘇紫雲) said. Many officials and military personnel sell information to China believing it to be of little value, unaware that
The central bank and the US Department of the Treasury on Friday issued a joint statement that both sides agreed to avoid currency manipulation and the use of exchange rates to gain a competitive advantage, and would only intervene in foreign-exchange markets to combat excess volatility and disorderly movements. The central bank also agreed to disclose its foreign-exchange intervention amounts quarterly rather than every six months, starting from next month. It emphasized that the joint statement is unrelated to tariff negotiations between Taipei and Washington, and that the US never requested the appreciation of the New Taiwan dollar during the
RSS