Is good depending on exports
Criticism of the German export model
Germany is not only the country of poets and thinkers, but also of exports. Every third job is directly or indirectly related to foreign trade, in industry it is even every second. Seen in this way, it is to be welcomed when the German export industry keeps reporting new records. But the strength of the export economy also causes problems, which is why criticism of the German export model inside and outside Germany is growing.
Criticism number 1:
Germany makes itself dependent on the world economy
The German export industry depends on the global economy running well. If this is not the case, export-based prosperity is quickly endangered.
This was last shown during the global economic crisis of 2008. Within just one year, German export business collapsed by almost a fifth. The trade war between the USA and China could have a similarly dramatic impact. Experts expect trade worldwide to stall if both countries impose punitive tariffs. Surprising political decisions such as Brexit also hit Germany harder as an export nation than countries that have a strong domestic economy.
Criticism number 2:
The export industry is too powerful
The high number of jobs that depend on exports ensures that politics often favor the export industry. It is, so to speak, "too big to fail" - too big to fail. During the global economic crisis, for example, the federal government supported the auto industry with the scrapping bonus, which cost German taxpayers five billion euros.
The fact that Chancellor Merkel has repeatedly advocated the easing of the actually planned EU exhaust gas values is related to the great importance of the export industry. When in doubt, "export first" applies - even if Germany has to break international treaties to do so.
Criticism number 3:
Workers pay the price for export success
The German products are in great demand abroad due to their high quality, but the price often also decides whether the company is awarded the contract.
In order to keep the price as low as possible, many German export companies rely on agency work, fixed-term employment and low wages. This particularly affects the employees in the supplier industry. They often do not receive much more than the minimum wage and thus pay the price for German export success.
Companies fend off demands for higher wages by stating that German products would then no longer be competitive and jobs would therefore be at risk. According to the motto: better a badly paid job than no job.
Because agency workers and fixed-term workers are barely unionized, their power to tackle poor pay is little. In addition, many export companies have left collective bargaining coverage.
Criticism number 4:
The German export surplus is damaging other countries
Germany exports significantly more goods than it imports from other countries. For the other countries this means, on the one hand, that they accumulate debts because they spend more money than they earn. On the other hand, their export industry is falling behind. Because companies make less profit, they can invest less in modern equipment, buildings and workers. They lose further market shares while the German export industry expands and strengthens its trade relations.
France and Italy, among others, are suffering from this dynamic. French labor market experts have calculated that 400,000 jobs have been lost in France due to the imbalance.
What particularly angered the states: Germany is also so successful because it breaks EU rules. Actually, wages and salaries should rise in line with productivity. This is not the case in Germany. The German export nation is thus booting out other EU countries.
Criticism number 5:
Civil and human rights fall victim to export
"Export first" - that often also means: What do we care about human rights? Many German companies supply autocratic systems and dictatorships. Arms exports to states that are waging war or that oppress their populations are particularly controversial. This includes, for example, Saudi Arabia.
Developing countries too often suffer from German export strengths. Because they have to give access to their markets under trade agreements, subsidized EU goods come into the country, such as German milk powder. Because the domestic producers do not succeed, however, the situation of the domestic economy deteriorates instead of improving.
Conversely, Germany has to make concessions because it depends on access to other markets. These concessions are also at the expense of the general public. In the case of the failed trade agreement TTIP, for example, the German government was ready to accept the controversial private arbitration tribunals.
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