‘Employment from the Successful Perspective. The German and British Cases’

01/07/2014

    _ Longueira: “The State needs to be at the service of entrepreneurs. There is no better public policy than promoting measures aimed at full employment”

    _ Schäfer: “The German labour reform built a trust framework to continue the reform process”

    _ Ruparel: “Spain must invest more in human capital” and less in other areas “such as infrastructures”

The 2014 FAES Campus Economics Course finished this afternoon with the "Employment from the Successful Perspective. The German and British Cases” Roundtable between Matthias Schäfer, Konrad Adenauer Foundation Financial Policy Head of Team and Raoul Ruparel, Open Europe Head of Economic Research.

Previously, Juan Pablo Longueira, Chile’s former Finance Minister, who was invited to take part in the event, gave the example of his country in terms of economic growth and employment creation. “The great challenge in order to generate employment is the need for entrepreneurs. The State needs to be at the service of the entrepreneurs of every country. There is no better public policy than promoting measures aimed at full employment”, he stated, and gave Chile as an example of a country that generates trust and where there are no subsidies for any economic industry, with “a fully liberalising system and facility to undertake which have enabled to increase the GDP per capita and employment”. He also stressed that “failure is at the core of entrepreneurs” and, in this respect, he praised Chile’s Bankruptcy Act, “which does not punish entrepreneurs who failed”.

REFORMING THE REFORM

Matthias Schäfer explained that “the German labour reform built a trust framework to continue the reform process”. “It is true that there was criticism, reforms always take time and we need to be ready for criticism, but said debate was one of the drivers of its success. When it comes to public debate, we need to be willing to reform the reform”, he stated.

According to Schäfer, the new German labour market, fruit of the reforms, generated “a more solid and stronger labour market in which more young people, women, immigrants and people over 55 are included”. The aim, among others, was to create incentives to work, to put an end to the regulatory burden, to reform the employment agencies network and to boost minijobs. “When it comes to choosing between unemployment and work I think it will be better having the option of staying inside the labour market”, he stated.

However, the Konrad Adenauer Foundation Financial Policy Head of Team pointed out that “these reforms, which were very positive, lead to new challenges”. In this regard, he referred to the FAES report on the labour market launched this morning, of which Schäfer is the author of some chapters. “I like the title of the report (Reflexiones sobre el mercado de trabajo: continuar la reforma) because it suggests that reforms never end and they have to be carried out permanently”, he stated.

WAGES AND SAVINGS

Finally, Raoul Ruparel mentioned that “Spain must invest more in human capital”. This is an investment that in the past was focused “a lot on other things, such as infrastructures”, compared to the United Kingdom. Moreover, according to him, “one of the reasons why in the United Kingdom there have been less dismissals and, therefore, less unemployment compared to Spain is because we focused more on the wage aspect” which means that we worked more on workers’ wages in order to cut costs. And he added that the monetary devaluation possibility has an influence on employment: “The United Kingdom can devaluate its currency in order to gain competiveness and this cannot be made by the Euro countries”.