When the first downturn shocked the economic boom in 1967, the social democratic Economics Minister Karl Schiller had an idea: he wanted to coordinate the anti-crisis policy in a concerted action with employers and trade unions. It was the birth of the now typically German political model.
What was new about Schiller’s approach: the state dared to use various measures to influence the economy. And the search for consensus should help to strengthen democracy and community spirit. At that time like today.
Olaf Scholz has invited for the coming Monday to discuss with the social partners “how we deal with the current price development”. The relief packages so far have not been sufficient to protect the vulnerable from the effects of inflation. However, prosperity for all or as many as possible can only be achieved if the question of distribution is also raised.
That is why employers and trade unionists are partners with politicians in solving problems. As in the 1970s: corporatist systems, in which politics, business and trade unions cooperate for the good of the whole, coped with the oil price shocks of the time better than other economies. So much for theory and empiricism. And what is possible in summer 2022?
The decisive meetings of the new Concerted Action will take place after the summer break. Then it will become clearer how much gas is missing in winter. This Monday is about a common understanding of the situation, from which recommendations for action can be derived.
Are the trade unions holding back on wage demands or are they reinforcing the trend towards recession? Are the employers committed to Germany as a business location and to the jobs? What are the political priorities?
Everyone is under pressure: Employers have to represent the interests of companies that are groaning under supply bottlenecks and energy prices. The members of the trade unions expect the inflation rate to be offset by lavish wage increases.
And the government is dealing with a people who are currently even more depressed by worries and fears for the future than at the peak of the pandemic. Is society able to absorb the burdens and compensate fairly? That is the aim of concerted action.
Direct help for the weak has priority. And an understanding of what promotes cohesion. Fuel discounts and tax cuts, as proposed by the finance minister, are not part of this because they disproportionately relieve higher incomes.
The biggest concern over the coming months will be the price of gas, so that’s where we should start. A reduction in VAT on food would also be helpful. The reintroduction of the corona bonus would also be welcome – but this means that the social security funds lose money.
After several corona waves and a war, the state is blank. And have to be honest. Stepping on the debt brake and at the same time not raising taxes (at the expense of the strong) with increasing public investments in decarbonization and digitization (as employers are demanding) and inflation support for the weak – none of this goes together.
