A series of labor reforms underpinned the German renaissance and have helped its unemployment rate fall despite the global economic crisis, German officials say.
But the measures were initially deeply unpopular and claimed political casualties.
One of those was Steinbrueck, who lost his job as the powerful governor of North Rhine-Westphalia, Germany’s most populous state.
He seems disinclined to let European colleagues off the hook now.
Fulminating against debt-fueled spending also resonates deeply with the German public. It may be true that only the oldest Germans have any personal recollection of the great inflation of the 1920s.
But most people are aware of the history and the social chaos that ensued. The recent labor market reforms have also heightened fears for financial security.
Whatever the reason, Germans are the antithesis of the stereotype of the profligate Americans — at least the profligate Americans of recent decades — preferring to save as a hedge against what they often view as an uncertain future.
Peter Bofinger, a professor of economics at the University of Wuerzburg and a rare admirer of Keynes among German economists, said this strain in the country’s political culture can be misunderstood as a self-lacerating streak.
Efforts to ease human suffering, after all, provided Keynes with his ethical impulse in the first place.
“During every lecture I give, someone always comes up with the question, ‘How are we going to handle our debt,’” Bofinger said. “You see this in personal conduct, and it is manifesting itself politically now as well.”
Indeed, Merkel’s poll numbers point toward a victory for her Christian Democrats in elections that will come late next year.
A certain level of perfectionism also pervades German thinking about how money should be spent.
In a recession, many economists would call this virtue a vice, but that has not stopped German officials from working through the details.
Merkel is herself planning to huddle with state premiers in coming weeks to hammer out what additional public works projects could be financed.
“If we could simply start building bridges overnight as Obama wants to do, then great,” said Klaus Zimmermann, president of the German Institute for Economic Research in Berlin. “But some investments take years. I don’t understand why the world doesn’t comprehend this.”
But as they watch their economies nosedive, what many EU countries cannot comprehend is why the German government is so averse to temporarily running large deficits, and as the pressures rise they are growing less shy about airing their grievances.
Speaking of the relations among European countries, John Kornblum, US ambassador to Germany during the administration of former US president Bill Clinton, said: “You are having an air-clearing experience — confrontation, you might call it.”
RSS