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|GERMANY IS OFTEN HELD UP THESE DAYS as a paradigm of the successful marriage of prudent financial stewardship with inclusive social partnership to create a prosperous yet fair society. There has been less attention on the measures taken to reach this happy state, and the losers in this process. Twelve years ago Germany was often characterised as the ‘sick man of Europe’: unemployment was high (over 5 million) and growth was non-existent. The government had even become the first to break the 3% limit on borrowing that its own national bank had been so keen to write into the rules for the new euro currency. Centre-left Chancellor Gerhard Schröder, at the head of a red-green coalition, decided that the reform needed was the familiar one, to British trade unionists, of benefit cuts and work ‘flexibility’. On the social security side a Volkswagen manager who was convicted of bribery, originated the ‘Hartz’ schemes which reduced the maximum length of unemployment compensation from 32 to 12 months and merged it with social benefits. In the labour market the reforms made it easier to sack workers and choose who was to be made redundant, and to hire temps. The whole package, known as Agenda 2010 (see issue 24) came into effect in 2005 so it is now possible to look back over a ten year period to gauge its effects. Certainly unemployment has fallen, although at 7% (three million people) it can hardly be considered that the country has full employment.||
The least affected region only has a 4.2% rate compared tothe 12.3% of Mecklenburg-West Pomerania in the former East Germany. Part time jobs have proliferated, now forming 25% of all employment contracts. Temping, ‘minijobs’ and ‘off-the-books’ work are also on the increase. Child poverty has risen, but here too there are great regional differences: 13.7% in the former West Germany, 23.5% in the East. 1.64 million children are in families which depend on Hartz benefits while 500,000 pensioners are classified as poor including women on €391 a month. Food banks have made their appearance but there have also been more strikes recently as kindergarten workers have joined airline pilots and train drivers in seeking cost-of-living pay rises. It seems that a cursory look beneath the surface of the German ‘miracle’ is all that is needed to find problems being stored up for the future.
A food bank in Hamburg
% unemployment rate in Germany by state (January 2015)
THE EUROPEAN GLOBALISATION ADJUSTMENT FUND was set up by the EU in 2005 to assist national governments to retrain large numbers of employees made redundant due to restructuring. Subsequently extended and made easier to access (see issue 46) it now has to cope with greatly increased demand following the financial crash. The fund now has €150 million annually to help with business start-ups, job-search assistance, occupational guidance and various kinds of training. The latest aid package to be approved by the Budgets Committee of the European Parliament is to go to media workers in Greece and former aircraft engineers in Ireland.
After the troika-enforced cuts in Greece newspapers lost 60% of their subscribers and media firms half their advertising revenue. The disbursement of €5.04 million to 928 sacked employees of Attica Broadcasting is the first in the sector and is to be complemented by €3.75 million for Attica Publishing. The Irish subsidiary of Lufthansa Technik, an aircraft maintenance and repair service, closed after the growth of Asian competition and 450 workers were laid off. Now €2.5 million is to facilitate their entry into higher education or help them set up their own companies. In practice the money will reimburse the Greek and Irish governments who have already taken measures to assist the redundant employees.