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Red-Red Coalition

June 20, 2010

On Thursday June 03 we visited Staatskanzlei Brandenburg and spoke with some of the representatives of the center-left Social Democrats (SPD), who have recently formed a coalition with the former Communist party, the Socialist Left party. Between the two parties they have a formed an alliance that supports a strong German welfare system. After our discussion I spoke with the state representative to further discuss the difficulties the coalition faces in regards to the welfare state and the persuasion of the dominating parties in Germany. We discussed the weakening demographic state of Germany, which can also be referred to as a ‘graying of the state’. This definitely has an extensive impact on the welfare state. That is, in Germany’s current conservative welfare state, what an individual pays into the state is what they receive in return from the state. There are however a few serious problems that arise with this type of welfare system.

In regards to the weakening demographic state in Germany, people are not having children like they used to. Namely, there are more elder individuals than that of the youth, and the whole concept of a conservative welfare state is that the younger individuals (those who are not retired) pay into the system to support those elderly individuals who are in need of retirement, Medicare, assisted living, hospice, etc. Alas, when there aren’t enough young individuals to pay into the system to support the elderly, the state must then step in pay.

The other major problem in regards to a conservative welfare state the high unemployment rate in Germany, particularly eastern Germany. Those employed pay taxes and that money is used to support those individuals who are unemployed, which presumes that they are in fact looking for a job. The problem however is that unemployment is very high, especially in the east and the money that those employed pay into the system is not enough to support those unemployed. Again, the state must then step in and pay.

This is merely a vicious cycle in which the German state is trying to get water from a dry well. Like the majority of politicians, the Brandenburg state representative didn’t really have an answer to such questions on how to reform the welfare state, decrease the vicious cycle of unemployment, or give further incentives to end Germany’s population decline. He merely said that the welfare system is a heated topic within the German government, because the dominating parties are not as enthusiastic in regards to a welfare system when unemployment is so high.

Of course I don’t have the answers as to what Germany should do, but there does need to be some type of reform in regards to the welfare state, or Germany is going to go broke! In the past few years they have made the initial stride to reform, by doing things such as basically cutting the unemployed off gradually after a year of being out of work. This is a good initial push, but Germany has a long road ahead if it is going to have a stronger welfare state, lower unemployment, and a stronger demographic state.

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One comment

  1. A bit off the topic, but I definitely appreciate your thoughts on this very important policy issue.



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