SHARE
COPY LINK

POLITICS

Report: Expensive family policies don’t work

Germany’s family policies, with its billions of euros in support programmes, are largely ineffective and in some cases counterproductive, a study commissioned by the German government and reported by Spiegel on Sunday showed.

Report: Expensive family policies don't work
Photo: DPA

Published in an interim expert report commissioned by the government and obtained by the magazine, the information showed that support payments the government makes for children are not very effective.

The German system of providing significant tax benefits for couples has “little effect” and allowing spouses to be included, at no cost, in the national health insurance plan is “particularly ineffective.”

It said there were some positive effects from Germany’s family policies, but these had “undesired side effects.” The report came out of a research project backed by both the family and finance ministries.

The government was hoping for an overall evaluation of its marriage and family policy support during the current legislative period, but publishing the complete report before the federal elections later this year is seen as unlikely, the magazine wrote.

Researchers tried for the first time to determine the long-term effects of government support policies. It concluded that the actual costs of increasing the children’s support payments “are around double what the nominal direct costs are.”

This happens because women work less, and therefore the government collects less in social security payments. The best return on public investment is for money used to support daycare.

As much as 48 percent of what the state invests in childcare programs gets returned to public coffers, the report said.

The Local/mw

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

POLITICS

EU ministers urge unity after Germany’s energy ‘bazooka’

EU finance ministers on Monday pleaded for unity after Germany announced a €200 billion plan to help German households and businesses pay for high energy prices, amid accusations that the EU's biggest economy was acting alone.

EU ministers urge unity after Germany's energy 'bazooka'

Europe is struggling with historically high energy prices as it faces an early autumn cold snap and a coming winter almost certainly to be endured without crucial Russian gas supplies because of the war in Ukraine.

Many EU countries have announced national programmes to shield consumers from the high prices. But Germany went the furthest on Friday when it announced its mammoth plan, which will see help pouring to Germans for two years.

Arriving to talk with his eurozone counterparts, German Finance Minister Christian Lindner insisted the spending was “proportionate” to the size of Germany’s economy and said his goal was to use as little of the money as possible.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

But Germany’s largesse rankled several EU capitals, some of which feared their industries could take severe blows while Germany’s sits protected, deforming the EU’s single market.

Outgoing Italian prime minister Mario Draghi has slammed Berlin for its lack of solidarity and coordination with EU partners.

French Finance Minister Bruno Le Maire, without directly criticizing Berlin, called on partners to agree a common strategy against the price shock and for countries to refrain from going it alone.

“The more this strategy is coordinated, united, the better it is for all of us,” he said.

Risk to ‘European unity’

Others pointed to the unprecedented solidarity shown in the Covid-19 crisis in which the 27 EU nations, against all expectations, approved a jointly financed €750 billion recovery plan.

“Solidarity is not only on the German shoulders, I think this is something that we have to deliver at European level,” said EU economics affairs commissioner Paolo Gentiloni.

“We have very good examples from the previous crisis on how solidarity can react to a crisis and also reassure financial markets. I think that this is our goal,” he said.

While a Covid-style recovery plan is not in the cards for now, Le Maire said €200 billion in loans and €20 billion in aid should be devoted to REPowerEU, a programme to help countries break their dependence on Russian gas.

READ ALSO: Will Germany set a gas price cap – and how would it work?

Bruegel, a highly influential think tank in Brussels, called the German plan a spending “bazooka” that many EU countries were unable to match, creating a potential source of animosity.

“If the German gas price brake gives German business a much better chance to survive the crisis than, say, Italian business, economic divergences in the EU could be deepened, and European unity on Russia undermined,” it said in a blog.

SHOW COMMENTS