German Society And Its Discontents

Lot’s of bits and pieces of news in from Germany today. Volkswagen one more time threaten to get tough with the unions, the Federal Statistics Office confirm yet another time that it is exports which are driving the German economy, whilst domestic demand actually fell (0.1%) during the second quarter. Meantime a 668-page report from the same statistical office reaches the rather unsurprising conclusion that: “Germany’s three-year stagnation has left economic and psychological scars among its citizens”.

The report – known as ?Datenreport 2004? – is in fact the 10th instalment of an ongoing study which was first published in 1983. Among other things it concludes that Germans were among the least satisfied people in the 15 EU countries surveyed before the recent accession of the 10 new entrants.

Also of note is the finding – based on economic criteria compiled over the past three years – that poverty is on the rise after remaining stable over the past decade in the west and decreasing in the east. At the end of 2002, 11.1 per cent of Germans lived in relative poverty earning less than half of average income against 9.4 per cent a year earlier. In east Germany relative poverty has doubled in the last 10 years.

As Tobias has often pointed out perhaps we would still do better to talk of the ‘two Germanies’, with the growing economic polarisation between east and west being reflected through diverging economic growth rates, unemployment, and incomes.

Three years ago 60 per cent of west Germans and 38 per cent of east Germans declared themselves ?satisfied with the functioning of democracy in Germany?, by last year these proportions had changed to 66 per cent in the west, and 32 per cent in the east. Indeed less than half of east German respondents thought democracy was the ?best form of government for Germany?, and 76 per cent said socialism was ?in principle a good idea that has been poorly implemented?.

An interesting personal testimonial on this situation, from Berlin blogger Marco Von M?ller, can be found here. Marco is from the west, whilst his girlfriend is from the east. Geographically only 30 Km separate them, but culturally, evidently, the distance is much greater.

Finally, two last points. One, thanks to the FT for the info on “Datenreport 2004” garnered for this post, and two, a rather preoccupying thought. A couple of weeks ago in answering why I felt the eurozone was not a single economic entity in the way the United States evidently is, I made reference to the fact that solidarity felt between Finish citizens and Greek ones appeared to be a lot weaker than that felt between citizens of Montana, and those of, say, Florida. The latter, I felt, could be better compared with the relations between east and west Germans. Now looking at the continuing and growing polarisation taking place inside Germany itself, it does really want to make me ask myself what this would look like across such a diverse eurozone if push (eg the Italian national debt) ever really does come to shove.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".