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March 27, 2009
Aided by Safety Nets, Europe Resists Stimulus Push
By NICHOLAS KULISH
VIENENBURG, Germany — Last month Frank Koppe gathered together all 50 of his employees at Koppe-Apparatebau for coffee, cake and the kind of bad news that has lately become all too familiar. He told them the small company’s business, designing and manufacturing custom equipment for industrial plants, had been sliced nearly in half.
But rather than resorting to layoffs, Mr. Koppe asked half his employees to come in every other week. The government would make up roughly two-thirds of their lost wages out of a fund filled in good times through payroll deductions and company contributions.
The program — known as “Kurzarbeit,” which translates as “short work” — and others like it lie at the heart of a heated debate that has erupted on the eve of next week’s Group of 20 meeting of industrialized and developing nations and the European Union, creating a rift between the Obama administration and European governments. The United States is pressing for a coordinated package of stimulus plans by member countries to encourage economic growth, something that Prime Minister Mirek Topolanek of the Czech Republic, which holds the European Union presidency, has called “a way to hell.”
But virtually all European governments, led by budget-conscious Germany, are resisting the American pitch, saying the focus should be on stricter regulation of financial markets.
The Europeans say they have no need for further stimulus right now because their social safety nets, derided in good times by free market disciples as sclerotic impediments to growth, are automatically providing the spending programs that the United States Congress has to legislate.
The German Federal Labor Office projects that it will spend some $2.85 billion this year for more than a quarter of a million people who end up on Kurzarbeit. In comparison, the agency doled out around $270 million last year, as the financial crisis first began to bite, and roughly $135 million in both 2006 and 2007.
That is a relatively small amount of money compared with the $787 billion stimulus package passed by Congress, but the Kurzarbeit program’s defenders in the German government say it is carefully calibrated to keep people on the payrolls, where shared burdens mean an efficient deployment of resources.
http://www.nytimes.com/2009/03/27/wo...ef=todayspaper
Years ago the owner of our local MLB team complained that 1) they played in a toilet bowl of a stadium and 2) if fans didn't come out in greater numbers to his toilet of a stadium he would re-locate to another state. That, I thought, was hubric arrogance on a grand scale, at least for sports. Today, here in the World's Nut House, we have Republican governors refusing unemployment extension money and the national dialog sounds much like the clueless team owner. Cut wages, cut benefits, blow up pensions, never stop outsourcing, and smash whatever unions still exist, namely the state employees, auto, teachers and nurses. And please, please, let's get America spending $$$ again. The Nut House...I have a team I'd like to sell you.
But rather than resorting to layoffs, Mr. Koppe asked half his employees to come in every other week. The government would make up roughly two-thirds of their lost wages out of a fund filled in good times through payroll deductions and company contributions.
The program — known as “Kurzarbeit,” which translates as “short work” — and others like it lie at the heart of a heated debate that has erupted on the eve of next week’s Group of 20 meeting of industrialized and developing nations and the European Union, creating a rift between the Obama administration and European governments. The United States is pressing for a coordinated package of stimulus plans by member countries to encourage economic growth, something that Prime Minister Mirek Topolanek of the Czech Republic, which holds the European Union presidency, has called “a way to hell.”
But virtually all European governments, led by budget-conscious Germany, are resisting the American pitch, saying the focus should be on stricter regulation of financial markets.
The Europeans say they have no need for further stimulus right now because their social safety nets, derided in good times by free market disciples as sclerotic impediments to growth, are automatically providing the spending programs that the United States Congress has to legislate.
The German Federal Labor Office projects that it will spend some $2.85 billion this year for more than a quarter of a million people who end up on Kurzarbeit. In comparison, the agency doled out around $270 million last year, as the financial crisis first began to bite, and roughly $135 million in both 2006 and 2007.
That is a relatively small amount of money compared with the $787 billion stimulus package passed by Congress, but the Kurzarbeit program’s defenders in the German government say it is carefully calibrated to keep people on the payrolls, where shared burdens mean an efficient deployment of resources.
http://www.nytimes.com/2009/03/27/wo...ef=todayspaper
Years ago the owner of our local MLB team complained that 1) they played in a toilet bowl of a stadium and 2) if fans didn't come out in greater numbers to his toilet of a stadium he would re-locate to another state. That, I thought, was hubric arrogance on a grand scale, at least for sports. Today, here in the World's Nut House, we have Republican governors refusing unemployment extension money and the national dialog sounds much like the clueless team owner. Cut wages, cut benefits, blow up pensions, never stop outsourcing, and smash whatever unions still exist, namely the state employees, auto, teachers and nurses. And please, please, let's get America spending $$$ again. The Nut House...I have a team I'd like to sell you.
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