Martin Hufner is chief economist of Bayerische Vereinsbank, second largest
bank in Ger. The Greens have long been branded 'leftists'; and I have
attempted to argue strongly against knee-jerk positions blindly following
that label for reasons including some expressed below. There is a critical
need to narrow the gap between rich/poor which isn't as wide in Germany as
it is in most other countries; but redistribution is not the magic bullet
for a sustainable future in my opinion.
Steve
February 1, 1999, Monday
Editorial Desk (NY TIMES)
The Greens vs. Germany's Welfare State
By Martin Hufner
Much to their surprise and disbelief, some German
business leaders have found common ground with their
erstwhile worst enemy: the Green Party, which is
emerging as the voice of economic reason in the new
center-left Government in a number of areas.
This stands in stark contrast to the mood right after
the election, when the victorious Social Democrats
brought their electoral allies, the Greens, into their
Government coalition. This raised grave concerns that
once the Greens grabbed a little power, they would push
an anti-capitalist agenda.
In fact, the Greens and their pragmatic leader, Foreign
Minister Joschka Fischer, are quite fiscally
conservative, more so in many ways than the Social
Democrats and their Finance Minister, Oskar Lafontaine.
(A Green politician has characterized Mr. Lafontaine as
someone ''who is stuck in a totally outdated concept of
demand-side economics.'') The Greens, for example,
oppose various large subsidies for industries like coal
mining -- a reform crucial to improving the
competitiveness of the German economy.
Reform of Germany's famously generous pension system is
another instance of the Greens' fiscal sense. While the
Social Democrats are determined to undo the very
limited scaling back in the pension system by the
previous Government, the Greens advocate a firm focus
on generational equity. They do not believe it is wise
to add to the financial burden of today's and
tomorrow's work force.
For the Greens, ''sustainability'' is more than an
environmental concept, and relates to financial,
economic and social policy as well. They believe that
if the level of consumption is not sustainable -- be it
in the form of deficit spending, the overconsumption of
state services or environmental degradation -- then
policies must change.
The Greens are even sympathetic to the idea that
corporate taxes must be revamped to make German
business more competitive. Their calculation is simple:
financially weak companies cannot make the necessary
investments in technologies to protect the environment.
The Greens' persistence forced German business to deal
with pollution and other problems before other
countries did.
In fact, environmentally sensitive technologies like
oil reclamation are one of the few areas where German
business can claim a dominance comparable to its strong
overall position as little as 15 years ago. Last year,
Germany's 18.7 percent share of the world market for
environmental technology was larger than that of any
other country, including the United States.
In some cases, it is business that has given due
consideration to the Greens' way of thinking, rather
than vice versa. Take a party proposal to triple
Germany's already high gasoline taxes. Many corporate
and financial leaders were aghast. But then again, one
cannot escape noticing that, at the very time the idea
was floated, Volkswagen introduced its new ''Lupo'' car
that is designed to run on 78 miles per gallon. From a
purely economic point of view, by the time that kind of
leap forward in efficiency takes a broader hold in the
marketplace, even a tripling of gasoline prices would
not impose an additional burden on the average driver.
As advanced industrialized societies, we need to
realize that the auto industry can no longer primarily
rely on the ''bigger and more powerful'' mottos of
yesteryear. ''More intelligent'' will do, as we look
forward to vastly improved fuel economy and the wider
use of information technology tools, like navigation
systems. The Greens' policy once again presents a
useful measuring rod for car makers' advances.
It is true that the Greens' single-mindedness in
pursuing their goals has proved highly frustrating to
business leaders at times. In retrospect, however,
these tough battles yielded a considerable amount of
mutual respect.
Even the Greens' more outlandish ideas sometimes make
an odd sort of sense. For example, a while ago a party
leader, worried about the waste of jet fuel, advocated
that Germans be allowed to fly to their vacation
destinations only once every five years. While an
example of severe overregulation, the idea makes a
point. From the standpoint of global competitiveness,
Germans certainly do spend too much time on vacation.
As long as Joschka Fischer manages to steer his party
in the right direction, the Greens' innate
anti-establishment thinking -- and their willingness to
take on institutions deemed untouchable by others --
provides a refreshing element in German politics.
Contrary to all expectations, the Greens have had such
a good start in the new Government that it has caused
Germany's astute Chancellor, Gerhard Schroder, to
change his own political strategy. Rather than letting
them increasingly occupy the center ground in German
politics, he is cooperating with them to put an
effective check on the Social Democrats' left wing,
which has so far resisted reforms. In working more
closely with the Greens, Mr. Schroder may be readying
Germany for the changes it needs.
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