Saturday I attended a panel discussion on the German election at the Johns Hopkins School of Advanced International Studies. Most of it was fairly dull but perhaps the most interesting presentation was by Robert Bergman who represents a German trade group. Bergman described the German business community as disappointed with the election results, saying that it will make reform "much, much, much slower."
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The result will be an acceleration in the outsourcing of jobs to elsewhere in Europe -- primarily Eastern Europe -- and other parts of the world. German business, he said, simply can't wait any longer for reform to occur. This will not only include big businesses such as auto manufacturers, he added, but the Mittelstand as well -- medium-sized firms that typically have anywhere from 50-250 employees.
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Essentially, he said that while 80% of Germans claim that they are in favor of reform, they only want it if it doesn't impact them. However, with the majority of the population dependent on some type of government transfer payments, this isn't feasible. The result was the middling result witnessed in the recent election.
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It's a gloomy assessment, but one that I can't disagree with. Once you get your population hooked on government handouts it's really hard to get them off.
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