On March 16, 2004, the successful "IZA Tower Talk" event series featured Friedrich Merz, vice chair of the CDU/CSU parliamentary faction in the German Bundestag. In his speech, which dealt with the economic and labor market crisis in Germany, he outlined key elements of his "Agenda 2004". Many Germans fail to realize how deeply Germany is mired in crisis, Merz contended. EU accession will cause more firms and jobs to move east. According to Merz, the "bubble" created by Germany’s "prosperity illusion" is bound to burst, which may even lead to political instability. He called for foresighted policymaking and more fundamental reforms. With respect to the labor market, the fallacy of working time reduction should be abandoned. At the same time, outdated collective bargaining regulations should be revised to leave more room for firm-specific agreements. The labor market and financial policy expert of the Christian Democratic Union also warned that the increasing tax rate competition within the EU will force Germany to implement further tax reforms.
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During the subsequent discussion with Hilmar Schneider, IZA Director of Labor Policy, Merz harshly criticized the "organized irresponsibility" at the Federal Employment Services (Bundesagentur für Arbeit), which he called "hardly reformable" under its current structure. He agreed with Schneider that policymakers seem to fail at communicating the necessity and long-term purpose of the current reform efforts to the public, but he also called for more political involvement on the part of Germany’s citizens. |
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