Subject of Envy: Britain Discovers Germany as a Model

May 8th, 2013

Published on Spiegel Online International, by Carsten Volkery in London, May 06, 2013 (Photo Gallery).

Britain, which has yet to recover from the 2008 financial crash, is peering enviously at Germany’s economic structure with its focus on engineering, its medium-sized firms, apprenticeships, regional banks and long-term business approach. The opposition Labour Party, but also the Conservative-led government, are starting to embrace German ideas … //

… Government Backs Apprenticeships:

But even the Conservative-Liberal coalition of Prime Minister David Cameron is resorting to German recipes to get the stagnant British economy growing again. It launched an apprecenticeship scheme to encourage more busineses to train their own employees. A new state-owned business bank is to provide small and medium-sized businesses with credit. And state-backed credit guarantees are being used to help boost exports.

The Financial Times wrote in April that both the British government and the opposition were transfixed by German ideas. Even the Welsh nationalist party Plaid Cymru recently demanded an investment program to regenerate structurally weak parts of Britain — similar to Germany’s more than €1 trillion Aufbau Ost program to rebuild the former communist east of Germany.

The rethink began after the 2008 financial crash. The British economy, so heavily reliant on its banking sector, has yet to recover from the blow, while the German economy rebounded relatively quickly. Part of the reason Britain had remained sluggish is that manufacturing only accounts for 11 percent of the country’s gross domestic product. In Germany, the figure is almost twice as high at 21 percent.

The Confederation of British Industry (CBI) said back in 2011 that Britain needed its own version of the Mittelstand — the small- and medium-sized German manufacturing companies often referred to as the backbone of the German economy. CBI chief John Cridland said Britain should boost its small business sector to promote innovation and growth. The government responded by setting up the business bank.

But the Labour Party is the most ardent supporter of the German model. Its leader, Ed Miliband, likes to talk about “responsible capitalism.” He has put a stop to the close ties New Labour had with the big London banks under former Labour Prime Minister Tony Blair. Insteady, Labour dispatched members to Germany to learn how the Sparkassen savings bank system operates. Shortly after that, Miliband announced that if he wins the next election in 2015, he will set up regional banks focused on promoting their local economies.
The Independent newspaper was only half-joking when it referred to “Neue Labour.” Two of Miliband’s advisers, Maurice Glasman and Stewart Wood, are experts on Germany. They are calling for the return to the “Mitbestimmung” system of codetermination, in which any company with a workforce of more than 2,000 people must have half its supervisory board made up of worker representatives. It was the British who introduced the system in Germany after World War II.

Even the current Golden Boy of British politics, Nigel Farage, the leader of the staunchly anti-EU United Kingdom Independence Party (UKIP), which just scored big in local elections, sees Germany as worthy of emulating — at least in some respects. Instead of the strict smoking ban in force in British pubs, Britain should copy the Germans and allow pubs to designate smoking and non-smoking zones – like they do in Germany.
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Links
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Philosopher as Farce: Artist Immortalizes Marx as Garden Gnome, on Spiegel Online International, by Sebastian Hammelehle, May 03, 2013 (Photo Gallery): Ottmar Hörl gained international notoriety in 2009 by designing garden gnomes giving Nazi salutes. Now he hopes to stimulate debate with 500 gnome-like figurines of Karl Marx in Trier, but he might not hit his mark …;

German Politics: related articles, background features and opinions about this topic, on Spiegel Online International.

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