Location debate

The location debate has been a debate about the competitiveness of industry and business in Germany that has been going on since the early 1990s. In its "Report on Securing the Future of Germany as a Business Location" (03.09.1993), the Federal Government stated that, in its opinion, wages and ancillary wage costs were too high in an international comparison and that working hours were too short (although the Federal Republic of Germany ranked second among the exporting nations in 1992 ).
Corporate taxes would have to be reduced significantly in order to ensure the competitiveness of the economy. For the same reason, social contributions and benefits are to be strictly limited. Incidentally, the state has too many tasks that private individuals could do better or just as well. The federal government is therefore determined to press ahead with the privatization of public companies or company holdings. For the unemployed, the reasonableness of work should be expanded and the private employment agency should be tested. Overall, more needs to be deregulated.

Representatives of business and employers' associations also called for legal, bureaucratic and collective bargaining obligations imposed on them to be restricted. What was demanded was more market and more personal responsibility of the individual instead of state services. This is the only way to make industry and business more competitive.

Von der großen Mehrheit der deutschen Medien wurden solche Forderungen unterstützt. Mit der Reformpolitik Ende der 1990er-Jahre wurde ein entsprechender Kurswechsel durch die Regierung Gerhard Schröder vollzogen, der vor allem auf einen umfangreichen Abbau von Leistungen gerichtet war. Zum Symbol dieser Politik wird das Hartz IV genannte Gesetzespaket, dass zu den nachhaltigsten Kürzungen von Sozialleistungen seit Bestehen der Bundesrepublik führte. Kritiker unter den Wirtschaftswissenschaftlern führen die anhaltend schwache Domestic demand und das gegenüber anderen europäischen Ländern unterdurchschnittliche Wirtschaftswachstum in Deutschland auf solche Leistungskürzungen und die niedrigen Lohnentwicklungen zurück.
The location debate about competitiveness continues after Eastern European countries joined the EU with their low wages and low taxes. Associations continue to call for wage restraint and longer working hours, although the German economy dominates many world markets as the so-called world export champion. The structural trade surpluses, combined with similar policies in China and Japan, also contributed to the global economic destabilization that triggered the financial market crisis.