News / Europe

Germany Approves Biggest Austerity Plan Since World War II

TEXT SIZE - +

Austerity is on everyone's mind as one European government after another introduces spending cuts to try to get deficits under control and shore up the beleaguered euro currency.

Austerity is the order of the day as parliaments across Europe debate how to reduce deficits and where to cut. And, that includes Europe's economic giant.

The government of German Chancellor Angela Merkel has agreed on budget cuts to bring Germany's deficit within European Union limits of three percent of GDP.

Speaking at a news conference in Berlin recently, Chancellor Merkel explained why it was necessary.

These are difficult times, she said, "We cannot afford everything we wish for if we want to create a future."

The aim is to save nearly $100 billion by 2014. It is being called Germany's biggest austerity plan since World War II.

In general, Europe's emphasis on austerity is driven by the current financial crisis, says political analyst Cornelius Adebahr, of the German Council on Foreign Relations.

"We have seen the example of Greece, where there was no more trust in the Greek government's ability to cut down the budget, to contain the debt or to keep it under control," said Adebahr. "So there is a momentum right now that is very much driven by the markets."

The financial crisis was triggered by the Greek government's inability to pay back its loans and by the country's near default, which threatened to drag the euro and those countries using the currency with it.

Germany is a major part of the European Union bail-out plan for Greece, and while its economy is in much better shape than that of Greece, austerity is the order of the day.

And many Germans, it appears, agree.

"Saving is definitely the right way to go", said a German. He warned that somebody is going to have to pay the debt back and it will be future generations.

"We have to start and not postpone it again" said another man. His wife agreed. "I think everyone should do their part, including those who are better off financially," she said.

Germany has traditionally followed a fiscally conservative path and Germans are widely viewed as prudent with their money. With budget cuts on the agenda, the question now is where will they come from and will they endanger the German social safety net.

Germany and most of Europe has a broad social-welfare net - benefits for the poor, for the unemployed, universal health care and good pensions.

Many would not want to give that up. But political analyst Adebahr says many young people do not believe they will get those same benefits in the future.

"Many in the young generation do not believe in the old pension system," said Adebahr. "If you ask them whether they will receive a pension and what age, they say "I am not sure whether I will be in the position of pensioners of today."

Some benefits have already been reduced - including jobless benefits and health care. Plus, the retirement age has been raised and many say it will continue to go up. But many Germans are adamant the austerity burden must not cut too much into their cherished welfare state.

That is as it should be says head of the Berlin stock exchange, Artur Fischer.

"I want to live in a country where people have a minimum to live somewhat of a happy life," he said. "Therefore I am willing to give away, through taxes and through other means, part of my income as a person, and a lot of other people think the same. So, we have a more stable society and we do this consciously."

Strains on the social-welfare net are not new and go beyond the current financial crisis. In general, Germans want that social contract maintained and are willing to save to do so - for themselves and future generations.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid