16/01/2006 1:42:06 pm
Changing Places? In the European debate, Britain has been used as an example of economic (neo)liberalism. Germany has, in contrast, been used as the opposite example, a continental country standing up for the European social model of a big state. New statistics show that the image is at best exaggerated, perhaps partly false - and suggest that in some time these countries may be changing places.

The British tax pressure will hit 42,4 per cent of GDP this year, according to the OECD, up from 40,4 per cent in 1999. In Germany, the tax pressure will be 42,1 per cent this year, down from 46,4 per cent in 1999. Not dramatic differences in the short run, but if this development continues for a few years, it will have a significant impact.

During the past years, there have been reforms in Germany. The Agenda 2010 has started to be implemented. In Britain, Mr Blair has talked of reform, but Mr Brown has increased the taxes. Now, Angela Merkel will continue with reforms and sooner or later Mr Brown will take over after Mr Blair. It seems likely that current policies will continue.

One should remember that before Thatcher, Germany was more economically liberal than Britain. Ludwig Eerharts policies created the "wirtschaftswunder". Are we swinging in that direction again?

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