[War] Germany: "Bundestag debates"

[Michael Brittain]

Germany:  "Bundestag debates"
Chancellor Lukas Lehman, Federal Republic of Germany
April 4th, 2013

(OOC: This is my attempt at economics and journalism which shouldn't be too
bad for a medic (!), but don't shoot me if it's.. urm, poor ;-)

----------------------
DIE WELT DAILY
---------------------
CDU "gambling with German future"

SPD leader and Chancellor Lukas Lehman has accused the CDU of attempting to
block the "change Germany needs" for its own political gains during his
opening statement to parliament after its two week recess.

"When it comes to real substantial change... the CDU is not capable of
offering anything new," he told MPs in the Bundestag, creating a roar from
the CDU seats.

He said some bills had been delayed because of infighting with the CDU,
causing the government to push ahead without any opposition support.

'Lack of vision'

In his fiery address to the Bundestag debate during the spring opening of
parliament, Mr Lehman said: "Complain all you wish about my policies, but at
least my government is decisive."

The CDU leader, Ewald Kohn said some proposals, such as the
education white paper, had come to fruition too early and needed more
careful consideration. He said the proposals, which calls for the
abolishment of Germanys three-tiered education system and replaced
with new academies and specialist schools, would only get CDU support
"if the government satisfied us that the change was needed, cost effective
and supported by education experts."

He said the CDU would continue to push for a change in current
immigration policy and try to block any further spending by the government.

On the counter-terrorism debate, he said the CDU would press
the government to allow intercept evidence to be used in court, something Mr
Lehman has yet to come out as in favour or against.

'Budgeting Targets'

The conservatives also attacked the Chancellors proposed budget, refusing to
cut unemployment benefit, but freezing it instead.

Mr Lehman said he would not "sacrifice the needs of German citizens to fund
business tax cuts."  He went on to say that the CDU tax policy
"favours the rich, not the poor. It is clear to me that the CDU wish not
only to take from less well off German families dependent on our welfare,
but also have no real intention of tackling poverty in this country."

In response, Mr Kohn said the Chancellor was good on debates, but bad on
policy, accusing the government of "spending promises that cannot be met"
and of risking economic stability.

"Yes, he can do the gestures, but when it comes to real, substantive change,
this Chancellor is not capable of offering anything new."

Mr Lehman hit back by saying that on Europe, tax, spending and education Mr
Kohn had "failed to face up to the big challenges ahead."

"The SPD are the only party proposing sweeping change to allow Germany to
prosper."

The bundestag are continuing to debate budgeting proposals to freeze the
level of unemployment benefit at current levels, and begin reducing the
subsidy burden of the country by 20% over five years. Mr Lehman also
promised a significant cut to borrowing and targets to reduce the countries
public debt. He insisted that this next financial year had to make fiscal
sense.

The government also announced plans to offer tax cuts to families
below the poverty line.

The proposed budget wasn't much of a shock to political commentators, with
many expecting the Chancellor to tread delicately. Recent economic growth
had given the government confidence, but Mr Lehman had inherited a large
deficit from the previous government. The Chancellors more centrist position
of late has faced criticism from within his own party, but has given him
some support from the conservative opposition and many economists.

"We cannot keep borrowing at current levels to fund a budget deficit. We
have to take stock of the fact Germany's economy is growing steadily, and
that while I want to increase investment significantly, we can not allow
our deficit to fall outside of our targets." Mr Lehman told the Bundestag.
"We aim for a Germany that is both socially and financially fair and
sustainable."

Germany has laboured under slow growth and high unemployment for years. Now
increased domestic demand is helping to change the picture.

The economy grew by 1.4% between January and March this year. This was the
best figure since 2009.

Investment in the construction sector was a major factor in fuelling growth.

Mr Lehman plans to reform labour laws; a move he agrees will be
controversial, but necessary to keep the economy from stagnating and
unemployment increasing. "Economic stability and reducing the budget deficit
is my top priority. I don't want to rush into any major spending sprees," he
said commenting on the decision not to make radical changes to the federal
budget for the next financial year. "The German economy needs to become less
restrictive to growth, but change must be delicate and not rushed. We must
be mindful of how delicate any economic growth can be."

A brighter economic picture should make the move to reform labour laws
more palatable to voters and to the SPD, say some analysts - and it lends
credence to his pledge to make Germany one of the most dynamic economies
in the world.

For the first time in decades, the German government is expecting to record
a budget surplus in 2013. But economists are worried that politicians will
be only too happy to spend the extra cash, warning the Chancellor to
continue to be tough with his budgeting despite positive figures,
particularly with his planned reforms requiring a large amount of funding.
"Any recovery Germany has had over the past few months is fragile",
Professor Hans Klein from the University of Berlin has said. "The Chancellor
and his government will need to be very aware of how rapidly the situation
can change. There is nothing to guarantee the economy will not go back to
the way it was."

The Bundestag will continue to debate the government's legislative plan for
the year all of next week, with the education white paper among the top of
the list.

The government has highlighted reducing the subsidy burden on
the country and liberalising market regulations as key priorities in their
economic policy.

"There is heavy bureaucracy and inefficiency present that must be
eradicated," Mr Steinberg, the Federal Finance and Economic Minister
said in a statement to parliament earlier today. "To put it simply, too
many product markets remain too highly regulated with high barriers to
entry continuing to suffocate growth."

"It is essential that Germany becomes more competitive, both by reducing
bureaucracy and the subsidy burden. It is a priority of this government to
make subsidised industries more competitive. These subsidies make it harder
for Germany to make the transition from sunset industries to sunrise ones
and push up taxes, making Germany a less inviting place for investment."

The government has previously pledged to remove bureaucracy in the economy,
but has stopped short of announcing any change to labour laws, with debate
still ongoing within the SPD.

The CDU have expressed support for any move to reduce market
regulation, but refused to say whether they support the government's plan
until the review board reports their findings.

The finance minister also announced that health and education spending
would remain the same, and that the government had no plans to reduce
current defence spending or procurement, after the previous government
increased the budget to 2.3% of GDP and initiated a number of
modernisation programmes, including the development of two aircraft carriers
for the German Navy. Many will view the position of the government over
defence spending as more evidence of its centrist leanings, and
may face criticism over plans to reduce public debt but leave defence
spending untouched.

ACTIONS:
1. Announce targets to help reduce Germany's public debt.
2. Propose the new budget:
- Aim to reduce the subsidy burden by up to 20% (with a minimum cut of 15%)
   over five years.
- Set up a government body to wean the industries off the
   subsidies, helping them to become more competitive by restructuring, re
   organising and re staffing etc.
- Freeze unemployment payment for the next financial year, insisting that
   it is to help afford the WTOW policies. Insist it is a small price to pay
   for the assistance and support gained from the policy.
- Insist recent growth is helping significantly to reduce overall debt and
   that the governments target is to create a small surplus at the end of
   the year.
- Announce that the government will not be reducing defence spending, and
   will continue the previous governments modernisation attempts.
- Offer tax cuts to families below the poverty line.
- Insist current health and education spending is sufficient for this
   financial year, with a view to increasing it next year.
- Argue that with subsidy cuts and the freezing of unemployment benefit, the
  budget can afford the welfare and reform policies and tax cuts for the
  poor while recording a small surplus.
- Insist that the government is doing its best to reduce public debt,
   balance the books and not cut investment.
3. Try to calm down any union and public response by saying that the health
of the countries finances is important, and that while we aren't increasing
unemployment benefit we aren't cutting it either as the CDU want, and are
spending more on other welfare policies (eg. WTOW). We *will* be
increasing spending, but only once we've sorted out the last governments
mess.
4. After a careful review of market regulation, introduce a bill to reduce
bureaucracy and liberalise regulations in industries of slow growth to make
it easier for investment, the creation of new business, and obtaining
licenses to sell certain products.
5. Float around a white paper on education (calling for the removal of
Germanys three-tier education policy) and open a discussion on the future of
Germany's anti-terror laws. More info on the education bill to follow after
the next WR. 



-- 
No virus found in this outgoing message.
Checked by AVG Free Edition. 
Version: 7.5.503 / Virus Database: 269.15.24/1117 - Release Date: 07/11/2007 22:52