How can we solve Europe´s economy problems?
To whom it may concern. I am writing to inform you that our patient who is called Europe is unwell. He is still on drugs and needs to be monitored 24 hours a day, seven days a week.
The European Central Bank (ECB) acts like a worried doctor who is unsure about the right medication and does everything to relief the symptoms – buying national debits and keeping the interest rate low. Does it really help? In the face off of the European Election in May we need to ask ourselves how to make Europe Economy strong for the long term future.
In 2007 and the following years governments and public administrations along in an alliance with the IMF, the European Commission and the ECB spent millions to rescue failed banks and bankrupts nations such as Greece or Spain. The Inconvenient thruth is that without this money – without the idea of “deficit spending” – we would be dead right now.
On one side the German chancellor announced a strict reform policy for European countries: high education for professionals, common university degrees (the Bachelor/ Master system) along with flexible work laws. However on the other side she does the opposite. I like to point out two examples how different she rules Germany:
The retirement age was changed by the Schroeder-administration who built up a reform program named “Agenda 2010” which should make Germany competitive for the international market. Mrs. Merkel reduced the retirement age from 67 to 63 – without any need. The market needs qualified professionals who have experience, practice and knowledge. Due to the demographic change we face problems to replace all job vacancies. The market demands senior experts – it’s economical nonsense to leave an engineer in the age of 65 at home. Of course – not everyone is fit enough to be still at work. Fair enough. But who is able to work should work. You simply can not ban willing and ambitious professionals from their work.
Another example is the German minimum wage. For the care industry for instance a minimum wage might help to improve the situation of people living in uncertain or precarious living condition. The minimum wage is one easy way to improve the working and living conditions of many occupation groups. Moreover it helps the whole economy in theory because a higher salary means also an increase of consumption – which increases jobs, taxes and keeps the economy lively. However do we need a high minimum wage like 8.50 Euro? Is it necessary to destroy a lot of part time jobs in corner shops or bars due to higher prices? To set up a minimum wage goes along with a reduction of the amount of jobs in total.
As you can see it does not work to preach water while drinking itself. Mrs. Merkel risks more than the necessary results of the “Agenda 2010” – she risks German reputation as Europe’s leader.
The election in May is also about the question how important a competitive economy is. It is the main economy duty of the next European Parliament to create jobs for young unemployments, to stabilize the economy, to reduce the public debits and to ban the danger of inflation and deflation.