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Germany develops plan for eurozone growth

The Local · 25 May 2012, 14:55

Published: 25 May 2012 14:55 GMT+02:00

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The plan, being worked on by the German government, includes setting up special economic zones in crisis-hit countries which could woo investors with lower taxes and less regulation, Der Spiegel said, without revealing its sources.

Special bodies to privatise state-owned enterprises, along the same lines as when the assets of the former communist East Germany were sold off following German unification, would be created, the magazine said in a copy of its Monday edition.

In addition, the proposals included labour market reforms, such as making it easier to hire and fire employees and bringing down wage costs.

The plan further entailed proposals to boost on-the-job training for young people, similarly based on the long-established German model, the magazine said.

Most Germans reject eurobonds, a hotly-debated proposed tool for pooling eurozone debt to help fight the crisis, and are against Greece remaining in the euro, according to a poll published on Friday.

The survey for public broadcaster ZDF showed that 79 percent of those asked said they opposed the introduction of Eurobonds - in line with the position of Chancellor Angela Merkel's government.

Fourteen percent backed the tool, which is being spearheaded by new French President Francois Hollande but which Berlin argues would remove pressure for reform in spendthrift countries and also undermines market discipline.

Germans have also become increasingly sceptical about Greece's membership of the eurozone, with 60 percent against, while 31 percent backed its continued use of the single currency, the poll showed.

Story continues below…

Last November, 49 percent of those asked the same question were against Athens being part of the euro.

Some 1,312 people were surveyed between May 22 and 24.


The Local (news@thelocal.de)

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Your comments about this article

15:58 May 25, 2012 by raandy
From a German prospective this looks promising, but I doubt the indebted governments will view it that way unless the Germans are going to pick up the tab.

Indebted countries favor pooling the debt, Euro Bonds,
16:39 May 25, 2012 by smart2012
fyi, the growth agenda above it what Mr Monti is implementing in Italy.. Nothing new...
16:48 May 25, 2012 by K.Menuhin
Basically good thinking but if we ask what made the Western Democracies so successful we can name many things but chief amongst them are minimal regulation and CHEAP ENERGY! No one is talking about that and yet the USA that prides itself on both of these essential elements is now lower carbon due to shale gas, exporting gas as well and is seeing the price of electricity dropping.

We are destroying the future of the youth of today by chasing an unproven theory that is in fact being totally destroyed even as I write. Yes, there is global warming after all we are in a period called 'Inter Glacial' which happens quite regularly every 150 to 200 thousand years but no one has shown empirical data that there is a distinct relationship between human produced CO2 and Temperature that is catastrophic. The whole Anthropogenic Global Warming story has nothing to do with climate but everything to do with major social, financial and political changes and we are Lemmings asked to accept lower standards of living, austerity and seeing our youth despondent, discouraged and unmotivated and without hope because we are being led by our noses by eco-fascists and the 3rd World Bloc at the UN pursuing a retrograde utopian dream or wanting our cash.

I have great faith in today's young people and given a chance I am sure they will be successful but we've got to give them a chance and personally with the restrictive business practices in Europe that make it all but impossible for a young person to build a business and the ridiculous cost of energy they've no real hope. It doesn't take massive government plans all it takes is some guidance and to take off the hand cuffs!
16:50 May 25, 2012 by hallopeople
I good idea I think to learn the German's way. Why not? Look Germany how successful they are.Why we have to follow the losers way.
17:45 May 25, 2012 by smart2012
@hallopeople, ask Q cell/Opel/Schlechter/Hartz 4 people/20% of the German population not earning enough to leave and tell me how successfull Germany is...
13:55 May 27, 2012 by skaloc
I thought Greece and the rest of the Southern Eurozone was already an "economic" zone ... I remember when I worked on the military base in Goeppingen we had a manager that spent 3 years in the USA so he "knew" Americans. He used to always tell us that issues with our Italian and Turkish workers was due to them "coming from "third World" countries ..... I loved it when some of them covered his new Mercedes with cement ....
22:53 May 27, 2012 by narfmaster
It is unclear if this plan will work, but it is certainly worth a shot. The whole point of the Euro currency and the elimination of trade barriers was to create a unified market and more competition within Europe. In this way, European companies might have a chance to compete against companies from the much larger US or Chinese markets. Now, in order to become more competitive, the uncompetitive companies have to go out of business while an environment is maintained for the production of more competitive companies. I'm assuming that the latter is what the plan is all about as we have plenty of the former.

As far as global warming and all of that, I'm sorry but that argument has already been lost. Carbon has been trapped underground and we've released it and changed the ratio of gases in the air. It is measurable. The greenhouse effect follows the laws of physics. I'm sorry, but those rules are non-negotiable and arguing about it doesn't change the fact.

Regardless, investing in alternative forms of energy is a necessity for Europe as it's remaining fossil fuel supplies are quite limited. The money can be either given to Europeans who assemble and install wind/solar or it can be sent abroad to import fossil fuels.

Eastern Germans have been working like crazy to improve their standard of living and now things are quite nice in some parts:


What did they do? Put money into research, added tax breaks to attract businesses (such as Global Foundries, the solar industries, etc), as well as put money into the roads, pipes, rails, and other forms of infrastructure. It should be said that a lot of money came from Western Germans in the form of a tax that Western Germans are not too happy about.

If they would like to repeat this success with Spain, Greece, etc, then something similar has to happen. That likely means one group paying for the infrastructure of another group for some period of time while the receiving group is forced to follow certain rules. Everybody wins in the end, but no one likes the path to get there.
20:19 May 28, 2012 by Bushdiver
All I can say is I hope this plan is better that the plan to save Greece but throwing more money away.

@narfmaster...I've been to East Germany many times and I don't see any booming successes there. As far as putting money into roads etc I think most if not all of that money has come from the solidarity tax which we are still paying. If things are looking up so much in the east then I guess there is no longer any need for the solidarity tax.
23:14 May 29, 2012 by Ronald McCully
Common projects focusing on renewable energy should be the first priority for all of Europe. Energy is needed for growth in all sectors. A common training center for all levels of the work force should be established in central Europe. Unemployed workers could be quickly trained to support the renewable energy effort.

Just a few ideas from the USA - good health and best of luck. May the force be with you!


RW McCully Houston Texas USA
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