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  • Germany: First to Forecast Economic Downturn, Now Left Alone to Save EU

    Now, as its neighbors are being forced to retrench, and the future of the euro appears imperiled, Germany’s social services are running surpluses, helped by taxes that are among the highest in Europe and difficult sacrifices its citizens have made to jump-start their economy.

    The financial crisis has turned Europe topsy-turvy, with governments freezing pensions, unions voting away privileges and a thick web of safety nets disappearing one strand at a time.

    But as the role of the state is being reexamined, one country stands apart: Germany, where reforms a decade ago made the country less generous than some of its peers but also helped ease the blow when the rest of the world stopped snapping up BMWs and Bosch washing machines.

    Now, as its neighbors are being forced to retrench, and the future of the euro appears imperiled, Germany’s social services are running surpluses, helped by taxes that are among the highest in Europe and difficult sacrifices its citizens have made to jump-start their economy.

    Many Germans are peering across their borders and wondering why others can’t do the same, putting intense political pressure on Chancellor Angela Merkel not to appear too generous with bailouts. Other countries point out that Germany’s wealth depends at least in part on outsiders spending for German exports.

    Germany’s growth has slowed, to near flat in the second quarter of this year, and Merkel’s commitments to keep funding bailouts have come under attack both in Parliament and in the country’s constitutional court. But economists say that Germany’s own social services are sustainable, protected by the surpluses.

    The crisis has forced other European countries to curtail their old ambitions. Already, France has increased the cost of medical treatment and pushed back the retirement age. Britain tripled university tuition fees. Spain’s Socialists took the distinctly un-
    socialist approach of restricting union bargaining rights. Greece has been forced to take biting austerity measures.

    Read Full Article in the Washington Post.com

    Good luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals
    calvin.wilson1@verizon.net
    http://twitter.com/Upstart__Nation

    Filed Under: Global Business

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