[A-List] Germany: monopoly capital's ideological war

["Michael Keaney" <michael.keaney@xxxxxx>]

You have got to be kidding -- living standards in the UK higher than those
in Germany?! But that's what a major research institute claims, no doubt to
shame and further enrage the populace as part of a major effort to force
Schröder into accelerating the pace of "reform" -- i.e., replicating the
conditions of US monopoly capitalism in Germany. Obviously they are counting
on people having short memories -- was it only two years ago that Der
Spiegel was running a series of articles entitled "The English Patient",
detailing the failing hospitals, railways fiasco, delapidated
infrastructure, etc.

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UK economy poised to pass Germany

Larry Elliott, Mark Milner, and John Hooper in Berlin
Friday December 20, 2002
The Guardian

Germany's reputation as Europe's economic powerhouse was dealt a grievous
blow yesterday when one of its most influential thinktanks named Britain as
one of a group of countries poised to overtake it.

With the government of Gerhard Schröder struggling to cope with a deepening
political and economic crisis, the Munich-based Ifo institute warned that
slow growth and rising unemployment meant Germany was slipping down the
European league table of living standards.

"In terms of GDP per capita Germany will soon be overtaken by Britain, the
Netherlands, Austria, Finland and Ireland. France has already reached
Germany's level," it said.

Germany would fall even further behind unless it was prepared to undertake a
shake-up of its economy. "In the coming years more and more countries will
overtake Germany unless, through deep and radical reforms, it is possible to
strengthen the power of our market again."

George Eustace, director of the anti-single currency 'No' campaign, said:
"These figures prove that the best way to improve living standards in
Britain is to keep control of our economy and deliver economic stability.
Germany faces serious difficulties because it has the wrong interest rate
and is locked into the euro at too high a rate. Now is no time to give up
our successful economic framework by joining the euro."

Without referring directly to the Ifo report, the Treasury noted the
improvement in Britain's economic performance. "The tough decisions we have
taken mean that we are better placed than we were in the past to deal with
the ups and downs of the world economy."

The Treasury yesterday submitted its annual economic report to the European
commission, which it is obliged to do under the Maastricht treaty. It said
Britain now met the treaty's criteria for joining the euro but expressed
reservations about Britain doing so.

"The government believes that exchange rate stability can only be achieved
on the basis of sound economic fundamentals - in particular, low and stable
inflation, steady and sustainable growth, and sound public finances. The
exchange rate should therefore be seen as the outcome of all other economic
policies."

As the Treasury voiced its now customary caution about the eurozone's
stability and growth pact, German politicians sought to justify spending
cuts they are being forced to make to revive the economy.

Germany's finance minister, Hans Eichel, said: "We need reforms, that's
obvious. There will be cuts, not to weaken the social security system but to
preserve a strong and active state, also for our children."

To some extent, Germany's slippage down Europe's wealth league is a result
of its reunification. West Germany, taken in isolation, is still far richer
than either France or Britain, but former communist East Germany drags down
the national average.

Ifo compounded concerns about the Germany economy when it cut its growth
forecast for this year from 0.7% to 0.2%, and for 2003 from 2.3% to 1.1%.