Aided by Safety Nets, Europe Resists Stimulus Push

[Cronopio]

http://www.nytimes.com/2009/03/27/world/europe/27germany.html?_r=1&ref=world

VIENENBURG, Germany — Last month Frank Koppe gathered together all 50 of his employees at Koppe-Apparatebau for coffee, cake and the kind of bad news that has lately become all too familiar. He told them the small company’s business, designing and manufacturing custom equipment for industrial plants, had been sliced nearly in half.

Michael Hartmann, whose employer in Vienenburg, Germany, cut his work hours, is using the time off to get more training. But rather than resorting to layoffs, Mr. Koppe asked half his employees to come in every other week. The government would make up roughly two-thirds of their lost wages out of a fund filled in good times through payroll deductions and company contributions.

The program — known as “Kurzarbeit,” which translates as “short work” — and others like it lie at the heart of a heated debate that has erupted on the eve of next week’s Group of 20 meeting of industrialized and developing nations and the European Union, creating a rift between the Obama administration and European governments. The United States is pressing for a coordinated package of stimulus plans by member countries to encourage economic growth, something that Prime Minister Mirek Topolanek of the Czech Republic, which holds the European Union presidency, has called “a way to hell.”

But virtually all European governments, led by budget-conscious Germany, are resisting the American pitch, saying the focus should be on stricter regulation of financial markets. The Europeans say they have no need for further stimulus right now because their social safety nets, derided in good times by free market disciples as sclerotic impediments to growth, are automatically providing the spending programs that the United States Congress has to legislate.

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Too bad we Americans *just aren't accustomed* to successful, labor-based programs like Kurzarbeit - or Obama might have to consider them.

Grrrrrrrrrr ... :mad:

It royally pisses me off when a candidate for change uses inertia and the status quo as arguments for gradualist solutions to immediate crises.

[terisan]

1. It looks as though Europe is way ahead of us in keeping an economy on track.

I think our stimulus could have been an opportunity to get a bigger safety net.

[depakid]

2. Not sure how anyone can blame Obama for this...

:shrug: