How to square the circle?. IER: "Wage restraint is economic nonsense"... "

How to square the circle?. IER: "Wage restraint is economic nonsense"...  "



¿Como cuadrar el círculo?...Los salarios altos arruinan a las empresas y les impiden la inversión sobre todo en tiempos de crisis pero los bajos arruinan el consumo y tumban la economía...Como resolver la ecuación?..In media res?....

DIW Chief Wagner
Print Review 10:00
"Wage restraint is economic nonsense"

The German Institute for Economic Research believes its relations with Germany live - and wants to boost domestic demand.

The euro debt crisis is fueling the debate over the scope for wage increases in the new year. Peak business associations to urge "moderation". The union rather close German Institute for Economic Research (DIW), but asked that domestic demand in the Federal Republic must be strengthened.

The opinion of the "Five Wise Men"
Photo: dpa infografik GmbH / DPA The opinion of the "Five Wise Men" in November, predicted the end of the economic upswing in Germany

The DIW’s CEO Gert Wagner said the news agency DAPD: ". Precisely because of the €-economic crisis, it would be nonsense to call for wage restraint," he consider wage "of an average of just over three percent" possible. Wagner added: "In some industries it may be too much longer, less in other sectors."

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The ups and downs of the German economy

Official change in gross domestic product (price, seasonal and calendar effects) compared to last year ...

Wagner said that Germany came only with stronger domestic demand, "closer to a balanced current account - and that would help with get out of the euro crisis." The years of low wages in this country has "contributed to external imbalances, which have now brought the Euro-zone in the crisis."

DIW expected economic downturn in Germany
Photo: DAPD / DAPD DIW chief Gert Wagner

The DIW’s CEO said: "You can criticize Greece to law, that the country has lived beyond its means. Germany but has lived under his circumstances, "For because of" increasingly unequal distribution of income and wealth "is the private consumption remained weak -". And so it was worth less and less, to invest in Germany. "

Wagner added: "Accordingly, flowed the money abroad from - and there was the crisis caused by, by having in Greece led to a bloated state sector and in Spain at a huge real estate bubble that has driven up their bursting now, the unemployment rate to nearly 25 percent . "

DIHK "jeopardize not in employment"

The German Industry and Commerce (DIHK), however, warned against large wage increases in the new year. DIHK President Hans Heinrich drift man said in an interview DAPD: "Particularly in view of the uncertain development - keyword: debt crisis - should be chosen prudently." Goal had to be "not to jeopardize the employment structure."

Crafts for "moderate and flexible qualifications"

. "Moderation and flexible financial statements have supported the competitiveness of enterprises and thus to the positive situation contributed to the labor market": Crafts President Otto Kentzler emphasized applies this way it is "in time of increasingly uncertain economic environment to continue - in the interest of jobs and growth".
Economy warn of economic slump
Annual Report of the Advisory Council of Experts on economic development

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