Word: giersch
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Dates: during 2000-2009
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Some board members warned against what Herbert Giersch, director of the University of Kiel's Institute for World Economics, called a mood of "Europhoria." The good economic news has led investors to push up prices sharply on all the major stock exchanges in Europe in recent months, but Giersch warned that growth will not be enough to solve deep-rooted problems like unemployment. Hans Mast, an executive vice president of Crédit Suisse, agreed. Said he: "Unemployment in Europe has many demographic, structural and social causes that cannot be redressed simply." He also pointed out that his upbeat forecast assumed...
WEST GERMANY. For Herbert Giersch, the economy looks "quite satisfactory," especially when compared with the recession year of 1982, when the conservative government of Chancellor Helmut Kohl came to power. Growth this year is loping along at about 2.5% and should reach 3% in 1986. That's a considerable improvement over three years ago, when GNP declined 1%. Inflation is down in the same period, from...
...upswing, however, has its darker side, Giersch notes. West Germany currently depends on exports for almost all its growth. Agriculture, construction and even domestic car sales are still weak. Above all, the 9% unemployment rate shows no signs of declining, despite government measures to encourage temporary foreign workers to return home, early-retirement schemes and vocational-training programs. For Giersch, the root cause of the problem is an excessively rigid labor system that discourages workers from accepting job or salary changes. Proposals to alter this situation, he adds, meet resistance from both unions and government. Said Giersch: "Flexibility is polemically...
FRANCE. Jean-Marie Chevalier sees no safe way to improve much on his country's present, relatively slow 1.1% annual growth rate. Like Giersch, he believes the remedy lies in reforms aimed at bringing about more flexibility in wages, more incentives for entrepreneurs and more worker retraining. Chevalier was encouraged by his government's gradual progress in ending France's trade deficit and reducing its budget deficit. The cost of servicing the nation's foreign debt has stopped an upward climb, although it now stands at $11 billion a year. Proctivity in 1984 rose by a strong 5%. Industrial investment...