The Grand Coalition

[Lawrence of Arabia]

Apparently, Shroeder and the CDU and CSU (right parties) have formed an informal alliance. Shroeders coaltion (SPD-Greens) controls the Bundestag, but the CDU-CSU alliance controls the Bundesrat. It seems that now they will be working together to solve germanys economic problems

on top of this, he is wanting to cut corporate taxes from 25% to 19% on the profits. the average taxes paid by corporations ins germany will now go from aorund 38% to 32%, which is less than the average of both italy and france. the reduction is meant to combat the lower corporate taxes that exist in the 10 new EU members.

futhermore, there will be a 10% tax cut for small family companies passed down through heritage. they estimate 66,000 companies will be affectd every year.

it seems that the increase in size of the EU, although i didnt support it, and the grand coalition, might get germany moving again inthe right direction.

on the web Grand Alliance by AFP

[Dinner]

Germany certainly needs to give companies some reason not to leave the country and lowering profit taxes will help. Dong this will slow the exidus of jobs but it won't do much to net new jobs. To create new jobs, and thus solve Germany's unemployment problem, they need to lower the costs associated with hiring workers & make it easier to hire or fire workers. It just costs to much to hire someone and it is next to impossible to fire someone. Why bother hiring anyone if it takes an act of god to fire them during a down turn and then you have to pay for their unemployment and retraining for years and years because they likely won't find another job which pays as well as the last job.

Germany needs to learn that it has priced and regulated itself out of many if not most of the jobs there are in this world.

[Pekka]

Germany does what Finland is supposed to do. Funny, in here, SDP ****s it all up for the rest of us. IN Germany, they actually try the right thing, unheard of from SDP around the world.

That party should be labelized as terrorists org, for bringing nothing but misery to people.. oh yeah and turning riches to poor and poor to even more poor.

[kronic]

Grand Coalitions suck. I hate them, unfortunately the way our political system works they are sometimes necessary. Right now, the opposition can block 60 % of the proposed laws. That's ridicilous.

Grand Coalitions lead to crappy results. This is what happens, when you mix two (or more) different approaches to fix a problem.

We had a formal Grand Coalition between 1966 and 69. In that time, CDU and SPD made governing Germany only more complicated. They redistributed the power between the states (Länder) and the federal government in a way, that made neither the states nor the federal government capable of acting.

Germany does need a Grand Coalition to restructure the political system. But a Grand Coalition for passing some policies sucks. If you mix up leftist and rightist approaches, you'll usually get the worst of both of them.

This is actually what happened to all the Schröder reforms (Agenda 2010 and stuff) and what will happen to the next reforms.

We had a Jobgipfel ("job summit") last week between the leaders of the government and the opposition where these "tax cuts" were passed. However, the whole summit was more or less a failure. These reforms won't lower the unemployment rate.

Summary: Grand Coalition. Allowing the opposition to meddle into the affairs of the federal government.

[DanS]

I don't know why CDU/CSU is doing this. Schroeder and his party should be the one taking the heat for Germany's near triple-dip recession.

[kronic]

Because, they are in the difficult position. If they just block everything Schröder wants, they'll lose public support (since everybody knows that reforms must be made and the people are becoming sick of politicians doing nothing). That already happened often enough and made the CDU/CSU losing ground in the polls.

Schröder is a very clever tactician. He's smarter than the opposition leaders in that regard. The opposition can't risk to block all reforms (especially those, which they basically want, too), and on the other hand, they don't want Schröder to have success. If any of these measures actually work, Schröder will be the one who gets the credits.

[DanS]

Apparently, the CDU/CSU aren't very good politicians. They need to pull a Maggie Thatcher and stake out their own ground.

[Colonâ„¢]

The end is what matters, not the means.

[St Leo]

Countries need to get together and form some sort of an international agreement about the minimum corporate tax rate, or they'll end up at zero and income tax will go through the roof.

[Dinner]

They already do have a minimium. Zero.

If a country wants to compete then they need to keep their taxes low enough that their other advantages (closeness to market, lower transport costs, more efficient workers, easier access to capital, better infastructure, etc) can off set the higher costs. Several countries forgot to keep an eye on what alternatives businesses had so they raised their tax & regulatory burden to the point that businesses just up and took their marbles else where.

The solution to high taxes is to spend less then you don't need so many taxes.

[St Leo]

Originally posted by Oerdin


They already do have a minimium. Zero.

Yes. That's bad for all private citizens out there, because we are the ones who are going to get screwed if corporations whore themselves out to the lowest taxer.

The solution to high taxes is to spend less then you don't need so many taxes.

Riiight...

The solution to unpatriotic private businesses is for the public sector to step in and corner the abandoned market sector.

[Dinner]

And which abandoned sectors would that be? Your problem seems to be with free trade removing the restrictions which allowed governments to raise costs way above reality.

[notyoueither]

Originally posted by St Leo
Riiight...

The solution to unpatriotic private businesses is for the public sector to step in and corner the abandoned market sector.

Money knows allegiance to no flag. If you had some, you'd know that.

[Giancarlo]

Germany has a fleeting chance I believe in the next year or two, to completely its restructure its welfare and social system. People will protest, but those must be ignored. Germany must reduce labor rigidity laws NOW. Argentina held onto the laws making it nearly impossible for businesses to fire workers. Now look where Argentina ended up in 2001.

Faced with these tasks, I feel that Schroeder is not competent for the job.

Germany has a chance right now. If they screw it up.. well... unemployment will shoot up even more. That is if they follow the left wing bull**** in the country, and not a neo-liberal economic method.

So: Reform or Die.

[Lawrence of Arabia]

Argentina held onto the laws making it nearly impossible for businesses to fire workers. Now look where Argentina ended up in 2001.

you know exactly why argentina went down the ****ter in 2001, and it wasnt because of rigid labor markets.