goodluck ...European Central Bankers...
We are already at an unemployment rate of 10% in Germany, and it will get worse. Unemployment is now running at the highest level since unification.
At the same time the fiscal deficit is running out of control, Finance Minister Eichel over the weekend hinted at throwing in the towel as the problems are getting even worse. An increase of the value added tax appears inevitable.
Remember we got the Social Democrats ruling here at present, they used to be rather close to the unions.
...their safety net is still much stronger than here, though who knows, there has been a lot of griping about it in the past few years and they may have to shred it at some point, but for the most part haven't done so yet.
This safety net is getting bigger and bigger holes, in fact, the need to cut back on social benefits has now led to serious strains between the relationship of Social Democrats and the unions, with unions coming out with proposals that just prolong the necessary adjustment process of the German economy to heightened global competition. There is no way around it, one way or another, the strong power of unions in Germany has to be broken before we can make any headway here (they threaten to fight for even higher pay rises next time if the government goes forward with the proposed loosening of laws that make it extremely hard for companies to adjust their employment level to sour economic times).
Sweden as probably the most socialist country in Europe is miles ahead of Germany in that regard.
I completely agree with Zeev, social unrest within and between some European countries will at some point put considerable (downward) pressure on the Euro.
Culmus
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