Drei Punkte für mehr Wachstum –
Gemeinsamer Aufruf von Wirtschaftsinstituten
Press Release of March 12, 2005
The dramatic labor market situation clearly shows that economic revival is still urgently needed in Germany. However, large-scale structural reforms cannot take place overnight. For this reason, Professors Michael Hüther (Institute for Economic Policy at the University of Cologne), Thomas Straubhaar (HWWA- Institute for Economic Research in Hamburg) and Klaus F. Zimmermann (German Institute for Economic Research in Berlin and Institute for the Study of Labor (IZA) in Bonn, submitted a three-point-program with a view to improving the growth conditions of the German economy, which can already be implemented from July 1, 2005.
1) In order to encourage the creation of new jobs and boost employment-intensive investments, contribution to unemployment insurance should be reduced by 1 per cent. Simultaneously, the solidarity surcharge should be abolished, which would significantly reduce the tax burden for all. Because an income relief totaling about 18 billion euros annually cannot be compensated by a short-term reduction in expenses, the standard VAT rate should be raised by 2 per cent.
2) To increase flexibility of the labor market, the conclusion of fixed-term employment contracts without further justification with a view to regulating part-term and fixed-term employment for employees from 52 years, should be made possible for all types of employment. In the medium-term, it should be checked whether the unfair dismissal protection clause could be replaced by an optional severance pay clause.
3) In order to strengthen the innovative power of the German economy, the Federal government now faces the challenge of driving forward debureaucratization of potential future markets, instead of working towards the opposite by implementing limiting regulations on the economic use of future technologies and the planned Anti-Discrimination Act, which goes far beyond EU requirements.
2) To increase flexibility of the labor market, the conclusion of fixed-term employment contracts without further justification with a view to regulating part-term and fixed-term employment for employees from 52 years, should be made possible for all types of employment. In the medium-term, it should be checked whether the unfair dismissal protection clause could be replaced by an optional severance pay clause.
3) In order to strengthen the innovative power of the German economy, the Federal government now faces the challenge of driving forward debureaucratization of potential future markets, instead of working towards the opposite by implementing limiting regulations on the economic use of future technologies and the planned Anti-Discrimination Act, which goes far beyond EU requirements.
