A hot autumn
Upon his return from a short summer vacation, and braving the German heat wave, Chancellor Gerhard Schroeder announced the most radical package of reforms in the country’s post-war history. Should the program be implemented without any major alterations and compromises, it will, indeed, signify a major break with the past. German citizens will have to get used to a welfare program far less generous than the one they have enjoyed until now, albeit still more liberal than those in place in most southern European states. Tax cuts will be their only comfort but these too will take a cut in subsidies. To be sure, Germany and France have been too openhanded in some areas, placing their economies, now in transition, under too much strain. Over the previous couple of decades, political expediency has been a stumbling block to any massive overhaul of the issue of subsidies and unemployment benefits. The same applies to high unemployment, which the 39-hour work week in Germany and the 35-hour work week in France failed to curb. Only time will tell whether the proposed structural reforms can eradicate the scourge that has plagued the countries of Western Europe without creating a new pariah class. This, however, threatens to expand unless the governments can manage to trim their oversized state sectors, like the administration of Jean-Pierre Raffarin in France which is bracing for a hot autumn of labor protests…
