BUSINESS WATCH

When Germans turn into sour ‘Krauts’

The only reason the local media have stopped reporting on racial violence is that there is so much, it’s no longer news

Peter C. Newman January 17 1994
BUSINESS WATCH

When Germans turn into sour ‘Krauts’

The only reason the local media have stopped reporting on racial violence is that there is so much, it’s no longer news

Peter C. Newman January 17 1994

When Germans turn into sour ‘Krauts’

BUSINESS WATCH

PETER C. NEWMAN

The only reason the local media have stopped reporting on racial violence is that there is so much, it’s no longer news

With unemployment expected to reach six million this winter and an economy staggering through its worst crisis in 40 years, German shopkeepers recently tried to boost business by extending their hours. Instead of agreeing to the change, which would have meant overtime pay for their members, the retail trade unions flatly rejected the revolutionary idea of staying open after 6:30 p.m. on weekdays, beyond 2 p.m. on Saturdays, or doing any business on Sundays.

That attitude of preserving the status quo at all costs has driven Germany into the unenviable position of having the world’s highest wage costs. About half of the $27 hourly average labor cost—compared with $15.15 in Canada—goes towards employee benefits. (Some companies still quaintly grant their employees’ children free suits and dresses for church confirmation.) But the biggest cost to employers is a work week that is 20 per cent shorter than the hours put in by North American competitors. As well, most German employees get not only six weeks of regular vacation a year but are also paid up to 14 months for working only 12, as well as being granted 12 to 15 public holidays. This growing national habit of being dedicated to leisure pursuits, with only occasional interruptions for spurts of work, prompted Chancellor Helmut Kohl to complain recently, “A successful industrial nation—which means a nation with a future—doesn’t allow itself to be organized as a collective amusement park.”

The Germans, who once lived to work, now work to live—and not very hard at that. Their faltering work ethic has undermined access to traditional export markets, while Germany’s productivity quotas have significantly ebbed. The country that once advertised itself as the land of economic miracles has virtually priced itself out of world trade. The powerful Deutsche Bank’s chief executive, Hilmar Kopper, has warned that

Germany will be lucky to achieve zero growth in 1994, after a two-per-cent drop in 1993.

Denied the opportunity to seek a national political identity by the legacy of Hitler, the Germans have ever since tried to define themselves in terms of economic clout. That worked until recently, even though the economy has been in relative decline for the past 20 years, ever since the rapid rise of the value of the deutsche mark in 1973. In terms of the important measuring sticks—productivity, growth of gross domestic product, rate of investment—Germany now lags behind France and even Italy. Last year, as the current recession deepened and these dramatic truths struck home, the Germans grew disillusioned and bitter.

Even the most patriotic German manufacturers such as Mercedes (which saw its profits slump 45 per cent in 1993) and BMW are shifting production lines to North America, while other factories are quietly being moved to the Czech Republic, Slovenia and Hungary, where costs of labor are a quarter of domestic rates. Another of Germany’s competitive liabilities is that, as the benchmark currency in the European

exchange rate mechanism, the d-mark remains dangerously overvalued.

Although Germany’s powerhouse economy has lost much steam, its potential is still very real. The country’s future political direction will be tested this year with no fewer than 20 national, state and European elections. Polls indicate that two-thirds of Germans feel Kohl’s Christian Democratic coalition is incompetent, but the opposition Social Democrats, paralysed by internal squabbles, don’t offer much of an alternative. Most observers feel that Kohl, who has been chancellor for more than a decade (and party leader for 19 years), may be able to pull off one more mandate. Paradoxically, one of the factors helping him has been his position as a known quantity standing up against the profound sense of angst and insecurity triggered by the economic hard times his policies helped create. His own diagnosis of the situation reaches back to the lively ghosts of Germany’s history. “The evil spirits that have come to life again in the Balkans are not unique to that area,” he says, referring to the revival of racism and Nazism in his own country.

The only reason the media have virtually stopped reporting incidents of racial violence in Germany is that there are so many, it’s no longer news. The wave of anti-Semitism claimed 24 lives in 1993, with 80 Jewish cemeteries being desecrated—as many as suffered a similar fate in the militant Hitler buildup period between 1926 and 1931. More than 2,200 attacks on foreigners were reported in the past year and the German intelligence service has documented the existence of 82 “right-wing extremist organizations,” only seven of which have been officially banned. The tamest of them is the Republican party, run by a former SS officer named Franz Schönhuber, which will be contesting federal and state elections this year. ‘The soul of the German people is in danger,” former chancellor Helmut Schmidt said recently. “Historically, whenever Germany is too strong or too weak, there has always been turbulence.”

Teenagers with shaved heads and wild eyes are paraded on national TV, with earnest interviewers trying to determine whether they’re Nazis or run-of-the-mill hoodlums. The consensus seems to be that while there has certainly been a virulent rebirth of racism, Nazi symbols and salutes are used mainly to grab media attention.

With unemployment in the western part of Germany running at 11 per cent, and at 30 per cent in what was once East Germany, it has been the presence and influx of foreign workers that has triggered many of the racial tensions. There are six million “foreigners” living in Germany at the moment, and nearly half-a-million asylum-seekers, mainly from Yugoslavia, keep arriving each year. The 1.8 million resident Turks bear the brunt of the attacks, with firebombs pushed through their mail slots being the weapon of choice.

All in all, Germany has become a nation populated by some mighty sour ‘Krauts.’