MIL OSI Translation. Region: Germany / Deutschland –
Is the federal government managing the German economy well through the crisis? CDU / CSU parliamentary group leader Ralph Brinkhaus (CDU) and the head of the Union’s economic wing, Christian von Stetten, answer these and other questions in a double interview with Business Insider:
Business Insider: Mr. von Stetten, in a letter to Mr. Brinkhaus, you complained about a “burden and paternalistic orgy for companies”. The crisis was really felt by workers in the home office, the self-employed and the children who couldn’t go to school. Isn’t the perspective completely shifted here?
Christian von Stetten: In the spring, the coalition committee decided on a burdensome moratorium for companies. Companies should be spared this way. But now we are seeing new decisions between the Prime Ministers and the Chancellor, in some cases also by the Federal Ministers, which say the opposite. That is why we had to set an example with this letter and support our group leader for the upcoming negotiations.
BI: Still asked again: The federal government has put together an incredibly large aid package that is primarily aimed at companies. Hasn’t one of the central problems, the burden on many employees and freelancers, been neglected?
von Stetten: Many people are satisfied with the federal government’s aid measures because it reacted so quickly. But: A crisis should also be used to make the country fit for the future. The companies in the auto industry knew even before the crisis that they had too many employees. That is why the general extension of the short-time allowance until the end of 2021 is difficult to convey. One should have focused on those industries that suffer from government restrictions and that have to assign special help to them. Even after the summer break, we would have hoped for a fireworks display of innovations and a reduction in bureaucracy from the federal government. Instead, only the short-time allowance was extended and a working group was set up to reduce bureaucracy.
Ralph Brinkhaus: The working group is already meeting.
von Stetten: Dear Group Chairman, the working group did not need it. In my 18 years in Parliament, I was involved in six working groups on the topic of reducing bureaucracy, but far too little was implemented. The Minister of Economic Affairs has also made suggestions. I have the confidence to write a comprehensive law to reduce bureaucracy within a week. We just have to put things into practice now.
Brinkhaus: There were three bureaucracy reduction laws in this period. In addition, we have continuously tweaked many small screws – and prevented the build-up of new bureaucracy where possible. Of course there is room for improvement here, of course there can be more. But we are in a coalition. Whatever we would like, we have to find a second one for.
BI: Speaking of the coalition partner: The SPD wants the right to work from home, the CDU wants a law to reduce bureaucracy. Can’t you come to an agreement?
Brinkhaus: A home office law means additional bureaucratic hurdles. That is the opposite of what we want. A legal claim sounds good at first, but it takes a lot of effort. We reject that. In this tense situation, we have to relieve companies, not burden them. Employees and employers are mature enough to come to an agreement among themselves. The state doesn’t have to do that, it worked out that way for the past six months in the pandemic.
BI: But there are also voices in the Union for whom a simple “no” to the right to work from home is not enough.
Brinkhaus: We set different points for this: promoting innovation, more money for quantum computers and hydrogen technology, for artificial intelligence. These are all important measures to make Germany future-proof in the long term.
BI: Does that mean that the right to work from home will no longer exist in this legislative period?
Brinkhaus: No, we think home office is good, but we believe that this is best handled by employers and employees. In my opinion, this has worked very well so far. Climbing out of the valley will be difficult enough for our companies, since we don’t put additional stones in their rucksacks.
BI: The impression that politicians give in their crisis management is as follows: We just have to hold out until the vaccine arrives, then everything will be as it was before the crisis. But those in their early or mid-twenties looking for a job are already feeling the consequences. So, despite the many aid measures, is a “Corona generation” growing up here?
Brinkhaus: The current situation presents each of us with special tasks. Just take a look at what families are doing in childcare and homeschooling. We can best help the young generation if we set the right course now and make Germany future-proof. That means we need to invest in technology and innovation, reposition ourselves in competition with China and catch up in digital education.
BI: But a young person who is currently looking for a job and cannot find anything because of the crisis will hardly be comforted by the fact that the investments made now may pay off in 15 years.
Brinkhaus: I would like to make one thing clear and simple: We don’t let young people down. With the federal program “Secure apprenticeships”, small and medium-sized companies will receive a bonus of 2000 euros per new apprentice in this training year if they keep the number of their apprentices constant, and 3000 euros if they increase it. This program has worked so well that the Federal Minister of Education wants to extend it by six months until the end of 2021. Perhaps not everyone can find their dream job right away – but with a little adaptability, everyone will find it. Crisis or not, there is still a shortage of skilled workers in our country. And with our investments in future technologies, we show that we do not lose sight of the long lines.
BI: That is also important, but still checked again: In Spain you have seen how long a whole generation can be persecuted by a crisis. Why do you hear so little concrete from the federal government about how you want to help young people?
Brinkhaus: What would you suggest?
BI: For example, extending the apprenticeship allowance, a hiring offensive in the public service that has been saved up for decades …
Brinkhaus: We definitely don’t need any government employment programs. Sustainable, economically meaningful and innovative jobs are created when the private sector is doing well. That is why young people are also helped if we move the economy forward again quickly. An economic and financial policy aimed at stabilization is ultimately the best policy for the training situation in our country. I am confident that we will grow out of this crisis a lot and that companies will then be looking for many young people.
von Stetten: I currently see another problem on the job market.
BI: Which one?
von Stetten: I fear that people in crisis industries are currently not reorienting themselves, although that would be advisable. State aid conceals the real problems here, because they also keep doomed companies running. At the same time, companies in Baden-Württemberg, for example, are still desperately looking for employees, but cannot find anyone because many potential employees remain in their apparently secure short-time work.
BI: How can the state help here?
von Stetten: He has to look carefully to ensure that companies do not exploit state aid too much and thus override normal market mechanisms. An example: Even with a 30 percent drop in sales, the state pays part of the fixed costs. Let me put it this way: Even without a tax advisor, I could add up the figures for my own company so that I get 30 percent less sales. Then it is more worthwhile for me to rely on state aid than to run my business at full throttle. These are fatal incentives. Because this also means fewer people are hired.
BI: So is the state too generous with the aid and is not looking carefully enough?
von Stetten: In my region there is an ice cream parlor that is run by Italians every year from April to September. This year they will stay in Germany in winter and register short-time work. You can live well with 60 or 70 percent of normal earnings. There is nothing illegal about it, but there would be no such thing if the companies had to share in the costs of short-time work benefits – as it used to be. We have to go back to this arrangement. But: showmen, travel agencies, organizers, many others undoubtedly suffer. We have to concentrate on these when providing assistance.
Brinkhaus: I have a different opinion. Unfortunately, the money sometimes arrives in places where it is not needed. You have to act vigorously against this. This is precisely why the domestic politicians in our group are repeatedly calling for the creation of local task forces made up of investigators and public prosecutors to investigate attempted fraud involving corona aid. But that’s not a big problem. In my opinion, however, most of the help is targeted.
von Stetten: In the beginning there was no other way to organize help quickly so that you also had wastage. But it is all the more important that we take readjustment now.
BI: One point that is indisputable about state aid: it is very expensive. Nevertheless, the black zero should be maintained again as early as 2022. Can you rule out tax increases starting next year today?
Brinkhaus: Tax increases are not conducive to economic recovery. We need a lot of well-paying jobs to grow out of the crisis. At the same time, we must not constantly increase government spending. With the SPD, the ideas are exactly the other way around. There they want to pay for new social blessings through higher taxes.
BI: But you didn’t rule out new taxes.
Brinkhaus: We don’t believe that tax increases are good for the economy.
von Stetten: The most important passage in the coalition agreement for me is: no tax increases and no new taxes. That must also be included in the upcoming coalition agreement.
BI: Finally, on a completely different topic. Bavaria’s Prime Minister Markus Söder (CSU) said this week that federalism is reaching its limits in view of the corona pandemic. Is he right?
Brinkhaus: I don’t want to question federalism itself. Nevertheless, we have to ask ourselves whether the current system can still react adequately to the new challenges in the currently quite dynamic situation. My impression is that the pandemic has shown that we urgently need reform. There is a lot here that needs to be re-sorted.
BI: What areas are you thinking of?
Brinkhaus: The fight against pandemics must be better coordinated in the future. It cannot be that the central body is a video conference between the Prime Minister and the Federal Chancellor. We therefore need greater involvement of the legislature with a sense of proportion: through regulations where rapid action is required. With the involvement of the legislature, the greater the scope of the decisions. That is why we will debate the corona measures in the Bundestag in the coming week. In addition, we are facing a disruption in education, given the digitization of learning. If every federal state develops its own concept, its own school cloud, then we will not be competitive. This does not necessarily have to be done by the federal government, but the school ministries have to make better arrangements here.
BI: That sounds very urgent. When should it start?
Brinkhaus: First of all, we have to get through the winter well with the pandemic, but the talks should definitely start in this legislative period. The topic should also be part of the next coalition agreement.
Questions from Tobias Heimbach and Lars Petersen for Business Insider
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.