Time to copy Germany?

golfwallah · 21-05-2012 08:01PM #1

Can we learn from Germany, the most successful member of the EU, and apply a similar approach in Ireland? There appears to be a general acceptance among Germans of the importance of economic productivity in keeping them competitive over the long term.

A recent Forbes article attributes the latest German Economic Miracle to their apprenticeship scheme for the non-academic and to “reduced labour costs”: http://www.forbes.com/sites/timworstall/2012/03/05/the-cause-of-the-latest-german-economic-miracle/.

The German Government has also pumped billions into their economy to get it out of recession: http://www.spiegel.de/international/business/0,1518,707231,00.html

Other factors include their freely chosen structured political, societal, economic model: http://www.germanculture.com.ua/library/facts/bl_economy.htm.

The German labour movement is organised independently of political parties. The DGB is the biggest association of unions and represents industrial workers. Smaller associations, the DAG represents professionals / managers and civil servants are represented by the DBB (civil servants are not allowed to strike or engage in collective bargaining).

Although union membership has declined in Germany, the DGB negotiates collective bargaining agreements for 90% of the workforce. Some unions within the DGB are major advocates of social reform. Others prefer to cooperate with employers to achieve stable, sustainable economic growth (http://www.germanculture.com.ua/library/facts/bl_labour_unions.htm).

Looks like a “no brainer” to look at what works for successful economies, like Germany. We could, then, adapt and implement elements of their model to suit Irish conditions.

Are our political leaders, unions and employers capable of the German “grown up” cooperative, long term approach? Or are we set to be dominated by the inflexible short term “hold what we have” approach (Croke Park Agreement) we now seem to be stuck with?

Farmer Pudsey · 21-05-2012 08:41PM

Wouldn'd work in Ireland there is no fiddle. If you commit white collar crime you go to jail we could not have that in Ireland. There government even keeps there promises imagine that.

Also people work for a living in Germany and if you do you are rewarded. What about the poor people on the dole in Germany they only get about half the Irish rate. As well as that consultants and judges are on only around 100K and some on less you cannot expect a consultant in Ireland to work fulltime for the HSE for 200K he has to have his private pratice as well. In all fairness you cannot expect that ordinary working people have access to a proper health service in Ireland like they have in Germany

Higher civil servants only earn half or less than there Irish counterparts not to mention politicians. I mean you heard from the young FG TD it is impossible to live on 140K.

No we can't have any of that. This is why we must vote yes on the 31st of May to preserve the Status Quo.

ardmacha · 21-05-2012 08:53PM

We should strive to learn from everyone, including our own experiences and not repeat our mistakes.

Germany has a different situation than we do, so this may limit the number of lessons we can draw. With ample coal and other resources and situated in the centre of Europe, Germany played an important part in the industrial revolution. Its 20th century history is quite different.

Germany's present position is slightly fortuitous. The Berlin Wall fell, rather unexpectedly, and Germany had to batten down the hatches to fund the reconstruction of the DDR. They needed cheap money, but that cheap money did not lead to irrational exuberance as it was needed to rebuild the East. Just as individuals in Ireland are in different shape now depending on when they bought their house, the timing suited the Germans.

As for a “grown up” cooperative, long term approach we had national agreements for 20 years. Now the economic geniuses on this forum refer to "feeding from the trough", but the main problem with that process was a faulty presentation of the state of the economy.

We should learn from many countries, from Denmark to Singapore, above all properly analysing our situation and the exact contribution to us of the models in these places.

Icepick · 21-05-2012 10:00PM

The societal structure is different, but the welfare system should be copied.

Outkast_IRE · 21-05-2012 10:09PM

Icepick wrote: »

The societal structure is different, but the welfare system should be copied.

The welfare system is good, my brother has lived there 3 years never needed to be on welfare but his girlfriend lost her job this is how the ensuing weeks went on welfare for her there.

1.Signed on for welfare , meeting scheduled the following day with employment advisor.

2. Employment adviser seen she was highly skilled (Degree in IT) with loads of experience.

3.Employment advisor Got dates of any relavant 6 month education courses going on in the uni.

4. Gave her the option of taking a course and getting a topped up welfare amount on the condition she passes the course and seeks work immediately upon completion or look for work immediately and get a lower welfare rate.

5.One of the courses offered was to do with databases so she did that.

6. Finished the course , meeting scheduled with same employment advisor that week, big list of relavant jobs handed to her and told apply for these and report back if any come through.

7 Offered 3 jobs within the week.

See rewarding those looking to upskill in areas with job shortages, and penalising those who dont want to upskill. Smart way to do things.

K-9 · 22-05-2012 12:18AM

Farmer Pudsey wrote: »

Wouldn'd work in Ireland there is no fiddle. If you commit white collar crime you go to jail we could not have that in Ireland. There government even keeps there promises imagine that.

Also people work for a living in Germany and if you do you are rewarded. What about the poor people on the dole in Germany they only get about half the Irish rate. As well as that consultants and judges are on only around 100K and some on less you cannot expect a consultant in Ireland to work fulltime for the HSE for 200K he has to have his private pratice as well. In all fairness you cannot expect that ordinary working people have access to a proper health service in Ireland like they have in Germany

Higher civil servants only earn half or less than there Irish counterparts not to mention politicians. I mean you heard from the young FG TD it is impossible to live on 140K.

No we can't have any of that. This is why we must vote yes on the 31st of May to preserve the Status Quo.

Nail on head, entitlement culture here, Germans generally don't feel entitled. While everybody else was busy catching up with Germany in the 90's, Germany addressed productivity disadvantages in the 00's, low wage increases and increased productivity.

Germany has its problems and political dissent, they just don't have the cute hoor philosophy ingrained in society, from the white collar worker, politician to the guy on Welfare or doing a nixer fitting the wooden floor or fixing an engine. It's endemic here, it's all about what is in it for himself, not society and that feeds into the lack of protest.

Referenda are great things all together, we can blame the Germans as well as Government, now that we don't get any structural funds and can't be bought.

Role models are Sean Quinn, O'Leary etc., all it in for themselves.

BeeDI · 22-05-2012 11:43AM

Outkast_IRE wrote: »

The welfare system is good, my brother has lived there 3 years never needed to be on welfare but his girlfriend lost her job this is how the ensuing weeks went on welfare for her there.

1.Signed on for welfare , meeting scheduled the following day with employment advisor.

2. Employment adviser seen she was highly skilled (Degree in IT) with loads of experience.

3.Employment advisor Got dates of any relavant 6 month education courses going on in the uni.

4. Gave her the option of taking a course and getting a topped up welfare amount on the condition she passes the course and seeks work immediately upon completion or look for work immediately and get a lower welfare rate.

5.One of the courses offered was to do with databases so she did that.

6. Finished the course , meeting scheduled with same employment advisor that week, big list of relavant jobs handed to her and told apply for these and report back if any come through.

7 Offered 3 jobs within the week.

See rewarding those looking to upskill in areas with job shortages, and penalising those who dont want to upskill. Smart way to do things.

Piece of cake:cool: We have SOLAS:D , born out of that great agency called FAS!! With a pedigree like that, who needs to copy the boring Germans:cool:

Outkast_IRE · 22-05-2012 10:32PM

BeeDI wrote: »

Piece of cake:cool: We have SOLAS:D , born out of that great agency called FAS!! With a pedigree like that, who needs to copy the boring Germans:cool:

Half of FAS/solas problem is too many managers/middlemen none of which can be realistically fired for poor performance.
I did my apprenticeship through FAS/ and the institues of tech,
cork FAS was fine but the stories lads would be telling you of some of the other training facilities.

One was of a training facility far in the south west of the country

where the apprentice plumbers would come in for training at 9am and leave around 11 and be signed in for and paid for the entire day.
Totally shambolic stuff altogether.

murphaph · 23-05-2012 10:32AM

ardmacha wrote: »

Germany's present position is slightly fortuitous.

While Germany has benefited from a weaker currency, saying that their position is fortuitous is not really fair to them. It forgets the 6, sometimes 7 day weeks worked by Germans in the factories after the war in a desperate bid to rebuild their shattered country (they brought it all on themselves in the first place of course but that's another matter).

They worked literally like dogs post war for a good 20+ years to establish the country as the most productive nation on earth (I believe it lost that title to China briefly but regained it).

It also forgets the wage suppression that has been going on in Germany for the past 15 or so years while other countries have been demanding and getting wage increases across the board.

It also ignores the tough welfare reforms that Germany pushed through. They were and are extremely controversial but most ppeople agree they were required.

I think it has less to do with good fortune and more to do with their mentality tbh. They also produce things that are generally of good quality and are so desired around the world. They don't get the "ah shur'n it'll do" attitude, so they generally don't make any rubbish.

mikemac1 · 23-05-2012 10:37AM

Any country that has four hundred year old beer purity laws and demand top quality is a country worth copying

Debtocracy · 23-05-2012 11:33AM

Time to copy Germany was 10 years ago. Copying the German model now will lead to another 10-15 years of stagflation, high unemployment (a harsh welfare system hasn't helped the Greeks), and rising social conflict.

Have we not yet learned the futility of glorifying economies that happen to be in the growth phase of the economic cycle? How willing will we be to copy the German model when their economy goes back into recession? Maybe the Icelandic economy will be taking off like a rocket then and we will be embracing the values of default rather than austerity.

Dotsie~tmp · 23-05-2012 11:39AM

The Germans are boring. You know its true.

femur61 · 23-05-2012 12:33PM

Dotsie~tmp wrote: »

The Germans are boring. You know its true.

We're great crack aren't we. Alcohol fueled society, entitelment culture and I don't mean just SW but people who have been swallowed up by the Public Sector. I rather be boring than to have seen two recessions in my life, I'm in my early 40's.

kermit_the_dog · 23-05-2012 01:23PM

i think its possible to have a solid work ethic while still regaining a distinct charechter , irish people traditionally are more than willing to work hard , where we fall down is a high tollerance for sub standard service , public and private , we also live in a country where insiders have all the options , we need to be more of a meritocrocy , from enda kenny to ryan tubridy to the four generations of doctors up the road who have an edge when a GP contract is up for grabs , its all about keeping power and priveledge ( not nessceserily wealth ) in a protected circle

23-05-2012 04:03PM

Less than a decade ago they were saying that the Germans should be copying us Irish..

murphaph · 23-05-2012 04:17PM

Rojomcdojo wrote: »

Less than a decade ago they were saying that the Germans should be copying us Irish..

They tried and to copy the bit that drove our initial boom....relatively low wages, by suppressing wage demands for over a decade to regain Germany's lost competitiveness. They did this quite succesfully but ordinary German workers became poorer relative to their EU counterparts. Better for Germany as a whole though, methinks.

While we Irish were getting "richer" and buying flashy German made cars, many ordinary German workers could only dream of ever earning enough to buy a new Golf! Germany is a country, that despite it's size is still almost totally dependent on exports.

(aside but slightly related: one thing we should definitely copy from Germany is their vehicle number plate system which does not indicate the year of first registration/manufacture. It's only done to encourage vehicle sales and this is a poor way to raise taxes with most of the cost of the vehicle leaving Ireland for good and only a % in taxes remaining)

There's no real magic to Germany's success. It's a combination of hard work and attention to detail basically.

golfwallah · 23-05-2012 08:42PM

murphaph wrote: »

They tried and to copy the bit that drove our initial boom....relatively low wages, by suppressing wage demands for over a decade to regain Germany's lost competitiveness. They did this quite succesfully but ordinary German workers became poorer relative to their EU counterparts. Better for Germany as a whole though, methinks.

While we Irish were getting "richer" and buying flashy German made cars, many ordinary German workers could only dream of ever earning enough to buy a new Golf! Germany is a country, that despite it's size is still almost totally dependent on exports.

(aside but slightly related: one thing we should definitely copy from Germany is their vehicle number plate system which does not indicate the year of first registration/manufacture. It's only done to encourage vehicle sales and this is a poor way to raise taxes with most of the cost of the vehicle leaving Ireland for good and only a % in taxes remaining)

There's no real magic to Germany's success. It's a combination of hard work and attention to detail basically.

“There’s no real magic to Germany's success. It's a combination of hard work and attention to detail”. Is it too much to ask why this simple message never seems to come from Government?

To create meaningful engagement between citizens, politicians, social partners, etc, at a minimum, people need access to “easy to understand” information. To my mind, a large part of the “entitlement” culture in Ireland comes from a deficit in communication regarding the real issues that affect all of us.

Is it just too old fashioned to expect political leaders to relate to age old values, such as having to earn our living, stay competitive and that there’s no such thing as a free lunch – especially, when this is the formula for real economic success?

In addition to appealing to values around hard work, we also need:
• more resilient structures to gain social acceptance of the things needed for a more sustainable economy, affordable welfare system and public service.
• an ability to inflict unpleasant consequences (not rewards) for recklessness / negligence by those in authority, etc.

Political leaders in Ireland too often take the route of treating the electorate simplistically, rewarding the “entitlement” mentality with too easy access to social welfare, unaffordable pay & conditions for public servants (not based on performance / value added), etc. They also prefer to give us good news and divert our attention from their own poor performance by blaming others for everything bad that’s happening – the Germans, Fianna Fail, Bankers, Developers, etc.

I believe most people behave rationally when presented with the facts in a way they can understand plus some sense of fair play for all members of society.

Why can’t our politicians set about achieving this? Maybe, it’s just too hard to break the old molds and, sure, isn’t it easier to go for the old reliable one-liners, sound bites and spin.

Farmer Pudsey · 23-05-2012 10:09PM

A lot of people forget that Germany has economies of scale it has a population of 80 million I think. It is based in the center of Europe so has easy access to market.

Due to this they have a hugh car, engineering and heavy industry that allows them to pay good wage to workers. I agree that Germans work hard but so did paddy during the late ninties and early noughties. He also worked hard in GB and the US when he emigritated. I believe the obsession with property in Ireland is due to historical reasons and also to the fact that the majority of people who imigrated worked in the construction industry in GB and the USA.

The problem we have in Ireland is bar agriculture we now have no indeginous industry, tourism and fisheries are gone fishing due to neglect and tourism due to cost compeditive issues. This means in Ireland if you have not got a degree or have not the ability there is very limited work options for you. Most of our indeginous industry is minimum wage work and I cannot see how it will change as high tech industry needs little services and guess what they are minimum wage as well.

ardmacha · 24-05-2012 12:07AM

murphaph wrote:

They worked literally like dogs post war for a good 20+ years to establish the country as the most productive nation on earth (I believe it lost that title to China briefly but regained it).

It also forgets the wage suppression that has been going on in Germany for the past 15 or so years while other countries have been demanding and getting wage increases across the board.

My point was that there is a cycle in the affairs of nations, as well as individuals. This can mean that the tide runs with you at certain times. The Germans worked hard for 20 years after the war because they needed to rebuild their country. But in the 80s they were increasingly inclined to be normal and enjoy some of the fruits of success, longer holidays etc. Their reunification meant that they had to tighten their belts a bit and have another 20 years of work. In recent years they have been in a position to move on from this phase, this timing was fortuitous to some extent.

Greece grew faster than any other European country from 1950 to the early 70s, there must have been some hard work involved in that too.

We in Ireland had good times partly caused by the juxtaposition of circumstances, as much as anything we did ourselves. It is important to acknowledge the role of these things.

golfwallah · 24-05-2012 08:56AM

Dotsie~tmp wrote: »

The Germans are boring. You know its true.

Maybe true, but would you prefer our exciting cavalier types like David Drumm, Sean Fitzpatrick & Co. of Anglo, Michael Fingleton of Irish Nationwide and Sean Quinn whose financial wizardry was “overseen” by Banking Regulator, Neary?

I guess the problem is that political economics is a balance between the boring stuff like balancing the books from existing activity and exciting stuff like stimulating growth from new activity.

The Germans seem to have grasped that reality and, hard and all as it is, we need to do likewise for our long term survival and prosperity.

Sure, we need growth and new activity - but through an acceptable level of calculated risk on long term wealth creation stuff rather than gambling the mortgage on domestic consumption (like property).

As I see it, the challenge for our political leaders is how to get this message across and gain consensus with key social stakeholders to implement such policies. We seem to be muddling through to some extent, but are we doing enough?

femur61 · 24-05-2012 01:48PM

Rojomcdojo wrote: »

Less than a decade ago they were saying that the Germans should be copying us Irish..

?????

24-05-2012 09:23PM

femur61 wrote: »

?????

While we were booming, the Germans and French were lagging. How could they restart their economies? By becoming more flexible like us Irish, of course!

If they are to act likewise, the central Europeans must be much tougher about cutting public spending, something that many governments in the region are finding politically tricky. And they also need to make their labour markets more flexible, instead of pursuing their current path of importing Europe's excessive regulation. For the central Europeans, in short, the road to prosperity is the same as it always was: freer markets, deregulation and smaller government.

http://www.economist.com/node/3286536

We were the toast of the town ten years ago; sure the Germans were too straight-laced to make it in the age of globalization. "Old Europe" etc...

ninty9er · 24-05-2012 09:31PM

I'm all for charity, but I prefer to direct at those in genuine need than other European states whose electorates created their own mess. So I wouldn't be for copying them just yet, however their industrial and educational systems are worth a sconce.

jimmycrackcorm · 26-05-2012 12:14AM

Outkast_IRE wrote: »

The welfare system is good, my brother has lived there 3 years never needed to be on welfare but his girlfriend lost her job this is how the ensuing weeks went on welfare for her there.

1.Signed on for welfare , meeting scheduled the following day with employment advisor.

2. Employment adviser seen she was highly skilled (Degree in IT) with loads of experience.

3.Employment advisor Got dates of any relavant 6 month education courses going on in the uni.

4. Gave her the option of taking a course and getting a topped up welfare amount on the condition she passes the course and seeks work immediately upon completion or look for work immediately and get a lower welfare rate.

5.One of the courses offered was to do with databases so she did that.

6. Finished the course , meeting scheduled with same employment advisor that week, big list of relavant jobs handed to her and told apply for these and report back if any come through.

7 Offered 3 jobs within the week.

See rewarding those looking to upskill in areas with job shortages, and penalising those who dont want to upskill. Smart way to do things.

Not a great example, It's quite normal for an experienced IT worker to be snapped up rapidly.

ardmacha · 26-05-2012 12:30AM

The Daily Telegraph, a well known impartial news outlet, has the suss on Germany
http://www.telegraph.co.uk/comment/9279921/German-efficiency-you-are-having-a-laugh.html

JoeGil · 26-05-2012 12:40AM

Rojomcdojo wrote: »

Less than a decade ago they were saying that the Germans should be copying us Irish..

Very true. Back in the hayday of the Celtic Tiger the Irish media was outdoing itself in lauding the dizzying growth rates of the Irish economy and ridiculing the low growth rates of the basket case economies of Old Europe as they liked to call them.
Little did they know ......

jimmycrackcorm · 30-05-2012 10:32PM

JoeGil wrote: »

Very true. Back in the hayday of the Celtic Tiger the Irish media was outdoing itself in lauding the dizzying growth rates of the Irish economy and ridiculing the low growth rates of the basket case economies of Old Europe as they liked to call them.
Little did they know ......

Like the Basket case economies of "old Europe" in 1945?

golfwallah · 03-06-2012 08:23PM

ninty9er wrote: »

I'm all for charity, but I prefer to direct at those in genuine need than other European states whose electorates created their own mess. So I wouldn't be for copying them just yet, however their industrial and educational systems are worth a sconce.

I don’t think we have to copy everything German but, let’s face it, we lost the run of ourselves during the Tiger era. After years of credit driven property bubble, unaffordable public pay and social welfare rates, we now need to get back to more sustainable values.

This includes German style stuff like balancing our public finances on the one hand and providing an economic climate that encourage wealth creation on the other. We simply can’t afford such high numbers employed in the public sector, excessive pay rates for politicians / senior officials and so many people dependent on social welfare – significant change has to be implemented to reduce these overheads.

But to stimulate growth without much prospect of EU financial incentives, Government should encourage enterprise by making it easier to do business and find market driven solutions to peoples’ real needs. It looks like there’s little EU money for this. So it needs to be done within existing resources, spending cuts and reductions in bureaucracy.

The recent “yes” vote strengthens the mandate to balance the books (even with Labour constantly looking over their shoulder at Sinn Fein). All our leaders have to do now is get on with the job, quickly, tell it like it is and keep us informed of progress.

If we are to learn anything from the Celtic Tiger, it’s that we need to focus on the real issues rather than expecting the EU or anyone else to do it for us. Throwing borrowed money at problems and spending inordinate amounts of time “renegotiating” the resulting bailout is no substitute for tackling these issues ourselves.

In this regard, today’s Sunday Independent article on reaction to frank remarks by German Ambassador, Christian Pauls, back in 2007, makes interesting reading:
http://www.independent.ie/opinion/analysis/eamon-delaney-now-were-paying-for-ignoring-this-frank-ambassador-3126361.html

gerryo777 · 03-06-2012 08:36PM

jimmycrackcorm wrote: »

Like the Basket case economies of "old Europe" in 1945?

Ssssssshh, Don't mention the war(s) or how long it took germany to pay it's debts (reparation) thereafter.(final payment was due on 3/10/10)

Lawrence1895 · 03-06-2012 09:03PM

As far as I know from friends and relatives in Germany, in times of recession. people were just hanging the bread basket higher, cutting down on luxury, such as a second car, weekend trips to the sun, getting groceries in discounters. It was all about concentrating on essentials.

And, maybe that was the key to recovery, the German banks found it easier to admit that the recession was in full swing, rather than ignoring the first warning signs and still giving out mortgages to almost everyone.

Chuck Stone · 04-06-2012 07:32AM

The Germans make high quality stuff and have lots of natural resources.

[Germany is] among the world's largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles

https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html

We don't.

Time to copy Germany?

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