ECONOMY
GERMAN MODEL - A RECIPE FOR THE WORLD Why look elsewhere for the answer when you have it already?
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hy did the German economic model, combining social consciousness, capitalist-free enterprise, family spirit of entrepreneurship, and family run companies which shape and propel the German economy, turn out to be so resilient that it eventually became a winning combination for a robust economic system? Should everyone emulate it?
THE IDEAL BALANCE? The Deutsche Welle has an explanation for us. They say that the German economy is regulated by the principle of "social market economy". This means that, on one hand, it is based on market
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Focus
GERMANY 2018
TRADE UNIONS AND EMPLOYERS HAVE THE FREEDOM TO DETERMINE THEIR OWN SALARIES - WITHOUT GETTING THE STATE INVOLVED
competition, and on the other, the state still has enough room for an intervention. The German economy has been doing well in the last fifty years. In recent years, while the rest of Europe has been shaken by the financial and economic crisis, the German economy has been stable. A lot of Germany's success is explained by a combination of social and market components. The roots of this system date back to the 19th century. Bismarck, the so-called Iron Chancellor, laid the groundwork for social legislation by establishing pension and health insurance - explains Werner Schreiber, the former Social Affairs Minister of Saxony-Anhalt. At the time, expenditures were divided, that is, half was paid by the worker and half by the
employer. This is still the central principle of today's social regulation, which after the Second World War, has been extended to family policy, social assistance and many other aspects – the Deutsche Welle writes. Salary autonomy is also a part of the German system. "In other words, trade unions and employers have the freedom to determine their own salaries - without getting the state involved", Schreiber said in an interview for the Deutsche Welle. Due to such a relationship between trade unions and employers, workers in Germany are less likely to go on strike, which is an economic advantage. Some of the success is due to the socalled “wide social consensus” which is similar to their politics where Christian
