Germany – the new mini-superpower
As its economic clout rises, Germany sheds its postwar identity, becoming more assertive in Europe and the world.
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Significantly, mittelstand firms create special relations between employer and employee, which helped them weather the recent economic crisis. Most Mittelstand did not lay off workers but simply reduced their hours. Workers didn't demand higher pay in exchange for stability and job security.Skip to next paragraph
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Worker loyalty and morale are central to the German approach. Roth & Rau operates a gym and a kindergarten on site for employees. Some senior managers teach physics classes at night, which helps them spot future talent. "We think in long-term relationships and that is different than hiring managers and workers that come and go," says Roth. "You can waste a lot of time fighting employees and never motivate them to do the 5 percent extra that makes the company most competitive."
Germany's concerted effort to build a panoply of world-competitive firms is one reason the public here has objected so strongly to bailouts of other EU nations, notably Greece and possibly Portugal. Germans value hard work and sacrifice, and they have little patience with those who they feel don't share the same ethic.
"We put a lot of pressure on ourselves to do our homework," says a senior German economic official. "We expect others to do their homework as well, and when they don't, it doesn't sit well here.... German products are high quality and competitive, and we have a strong industrial base in contrast with the British, and increasingly the US, which have moved to service."
But this thinking worries some smaller EU states and others who feel that Germany, as it rises out of the terra firma of Europe, will increasingly pursue its own self-interest and become more autonomous. Ms. Guérot notes that "history is no longer the clamp that holds Germany to NATO and the EU. The new generations see it differently."
To be sure, from the German perspective, the road ahead is not strewn with rose petals. Some German economists predict a "golden decade." But 75 percent of German workers haven't seen a substantial pay increase in many years. The Organization for Economic Cooperation and Development reports a shortage of labor in a workforce that is rapidly aging. Germans also worry that their export boom to Asia will eventually wane.
"We are a self-occupied giant," says Alexander Ritzmann, a former Berlin politician now with the European Foundation for Democracy. "There is a complete disconnect between the way others see Germany and how Germans see it. We always hear how well we are doing. For us, we are in crisis."
This lingering sense of insecurity is one of the forces motivating Germany economically and politically today. "Germans need a crisis to get their juices flowing," says a US executive in Berlin. "They have an incredible need to stay strong and keep stable. The Germans may be proud of their newfound confidence, but they may have difficulty expressing this in a way easy for others to take."
Certainly it hasn't been easy for some members of the EU to take. As Germany's economic clout has grown, so has its assertiveness in Europe – often abruptly and without the proper Dale Carnegie consultation. During the Greek fiscal crisis last year, Germany was initially hesitant to agree to any rescues. In May, Chancellor Merkel finally relented, amid panic for the euro, and signed on to a $1 trillion bailout fund.