Thursday, June 17, 2004

Why Germany's Gerhard Schroeder is in trouble (and deserves to be):

"The analysts in the conference unanimously pointed to one major factor when explaining the sagging German economy: labor unions and government have regulated and taxed capitalists within an inch of their lives. Mr. Schroeder has publicly advocated reforms, but the actual steps he has taken have been inconsequential. At the same time, he has revealed his emotional attachment to big government by pressuring central European countries that are joining the EU to adopt Germany's high-tax/low-growth policies.

"This pressure is a nasty reminder for Germans of a lost opportunity. When the country was reunited, the SPD foisted the German regulatory state on East Germany. The result has been economic catastrophe for that former communist country. The other former communist states that had to come of age without a "big brother" have outperformed East Germany to an astonishing degree. GDP growth in Poland over the last year was almost 7 percent. The unemployment rate in former East Germany is almost 18.4 percent."

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