GermanySocial Protection System

Chelsea RalstonThursday, November 27th

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History

• World’s 3rd largest economy, 5th largest PPP (Purchasing Power Parity), and the largest economy in Europe.

• Strong advocate for closer political and economic integration of the EU.

• Operates with the euro, monetary policy is set by the central bank in Frankfurt.

• In 2003, the government started to gradually deregulate the labor market to tackle high unemployment levels.

History cont.

• To conserve competitiveness of workers, the unions have abandoned higher wage demands.

• The third largest agriculture producer in the EU: potatoes, wheat, barley, and various types of fruit.

• A large supply of coal and natural gas but has reduced its mining and production because of adopting environmental protection measures.

• Big emphasis has been placed on renewable energy sources, such as, solar, wind, biomass, hydro, and geothermal.

GDP per capita

2002 2003 2004 2005 2006 2007 2008

115.1 116.1 116.3 114.6 113.6 112.8 111.4

151.6 153.6 154.7 157.7 156.6 154.6 150.4

100.0 100.0 100.0 100.0 100.0 100.0 100.0

Germany

USA

EU

2002 2003 2004 2005 2006 2007 2008

23600 24200 25200 25800 26900 28100 28800

31000 31800 33500 35500 37000 38500 38900

20500 20700 21600 22500 23600 24900 25900

Germany

USA

EU

Total GDP

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,45323734&_dad=portal&_schema=PORTAL&screen=welcomeref&open=/t_na/t_nama/t_nama_gdp&language=en&product=REF_TB_national_accounts&root=REF_TB_national_accounts&scrollto=0

Total General Government Expenditure (as a % of GDP)

2001 2002 2003 2004 2005 2006 2007

47.6 48.1 48.5 47.1 46.8 45.3 43.8

48.0 47.4 48.3 47.7 48.2 48.8 48.2

46.3 46.7 47.3 46.9 47.0 46.4 45.8

Italy

Germany

EU

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&produc

t=REF_TB_government_statistics&root=REF_TB_government_statistics/t_gov/t_gov_a/tec00023

Germany’s Social Protection

• Social Protection: social benefits that are paid by the government to households intended to relieve them from the financial burden of a number of risks or needs.

• Such as: sickness, disability, occupational accident or disease, old age, maternity, unemployment, housing, education.

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product=REF

_TB_government_statistics&root=REF_TB_government_statistics/t_gov/t_gov_a/tec00026

Social Protection Expenditure (as a percentage of total spending)

2002 2003 2004 2005 2006 2007

19.5 19.8 19.4 19.2 18.4 17.3

16.5 16.8 16.9 17.0 17.0 17.3

15.8 16.0 15.9 15.7 15.4 15.1

Germany

EU

Italy

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,45323734&_dad=portal&_schema=PORTAL&screen=welcomeref&open=/t_gov/t_gov_a&language=en&product=REF_TB_government_statistics&root=REF_TB_government_statistics&scrollto=0

Employment Rate

2001 2002 2003 2004 2005 2006 2007

65.8 65.4 65.0 65.0 66.0 67.5 69.4

74.0 73.1 71.9 71.2 71.2 71.5 71.7

62.6 62.4 62.6 63.0 63.6 64.5 65.4

Germany

US

EU

The employment rate is calculated by dividing the number of persons aged 15 to 64 in employment by the total populated of the same age group.

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product=REF_TB_labour_market&root=REF_TB_labour_market/t_labour/t_employ/t_lfsi/t_lfsi_emp/tsiem010

Unemployment Rate (ages 25-74)

2001 2002 2003 2004 2005 2006 2007

7.6 8.3 9.2 9.5 10.2 9.4 8.0

7.4 7.0 6.8 6.5 6.3 5.5 4.9

7.2 7.6 7.7 7.7 7.6 7.0 6.1

Germany

Italy

EU

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product=REF_TB_labour_market&root=REF_TB_labour_market/t_labour/t_employ/t_lfsi/t_une/tsdec460

The unemployment rate represents unemployed persons as a

percentage of the labor force. To be considered a part of the labor

force, one has to be actively seeking employment.

Long term unemployment rate

2001 2002 2003 2004 2005 2006 2007

3.8 4.0 4.6 5.5 5.7 5.5 4.7

0.3 0.5 0.7 0.7 0.6 0.5 0.5

3.9 4.0 4.1 4.2 4.1 3.7 3.1

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product=REF_TB_labour_market&root=REF_TB_labour_market/t_labour/t_employ/t_lfsi/t_une/tsisc070

Germany

US

EU

The long-term unemployment (12 months or more) are those of at least 15 years old, not living in collective households, who are without work

despite searching.

Taxation as Percentage of GDP

2001 2002 2003 2004 2005 2006 2007

10.9 10.6 10.4 10.0 10.1 10.8 11.2

14.7 13.9 13.4 13.3 13.3 14.4 15.2

13.3 12.7 12.4 12.3 12.7 13.2 13.4

Germany

EU

Italy

Source:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product=REF_TB_government_statistics&root=REF_TB_government_statistics/t_gov/t_gov_a/tec00018

Tax revenue is collected by the central government (Bund), the state (Laender), and local governments. The main two taxes are the value added tax (VAT) and an income tax. Tax revenue is distributed proportionately using a formula set by the constitution.

• Gini Index- measures the degree of inequality in the distribution of family income in a country.

Countries 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 CountriesAT 27 26 25 24 26 24 24 27 26 26 ATBE 29 28 27 27 29 30 28 28 26 28 BEBG 26 26 25 26 26 24 26 BGHR 29 HRCY 29 27 29 CYCZ 24 25 26 CZDK 22 22 20 21 22 21 22 25 24 24 DKEE 37 38 37 37 36 35 35 34 37 34 EEFI 22 22 22 24 24 24 26 26 25 26 FIFR 29 29 29 28 29 28 27 27 27 28 28 FRDE 29 27 25 25 25 25 25 28 DEEL 35 34 35 35 34 33 33 35 33 33 ELHU 23 23 24 27 28 HUIE 33 33 33 34 32 30 29 31 32 32 IEIT 33 32 31 31 30 29 29 33 33 ITLV 31 30 30 31 32 36 LVLT 31 36 LTLU 29 28 25 26 27 26 27 28 26 26 LUMT 30 28 MTNL 29 29 26 25 26 25 26 27 27 27 NLPL 28 30 30 36 PLPT 37 36 36 37 36 36 37 38 41 PTRO 28 29 30 30 30 31 31 ROSK 26 SKSI 22 22 22 22 SIES 34 34 35 34 33 32 33 31 31 31 32 ESSE 22 24 23 24 24 23 23 23 SETR 46 45 TRUK 32 32 30 32 32 32 31 35 34 UKEU-15 30 30 30 EU-15EU-25 29 30 31 EU-25

Souce:http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/index.php?template=3&radioindic=158&idDomain=3