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COMMENTS 

An interview with the President of the European Court of Human Rights

Dean Spielmann, President of the European Court of Human Rights since September 2012, has served as a Judge in the Court for over a decade. In a recent interview with the UCL Law Society’s Silk v. Brief, highlights of which are condensed in the blog post below, he discusses the evolving role of human rights in Europe, and explores the complicated relationship between the UK and the European Convention on Human Rights.
Dean Spielmann
23 March 2015 More...

Starts: Mar 23, 2015 12:00:00 AM

In Defence of Rights

Philippe Sands, Professor of Law at UCL and practising barrister in international law, and Helena Kennedy, a leading barrister and academic in human rights law, civil liberties and constitutional issues, were members of the 2011 Commission on a Bill of Rights. In highlights from a recent article in the London Review of Books, they discuss how human rights intersect with politics, examine the UK’s strained relationship with the European Convention on Human Rights, and question the possible motivations lying behind the proposed Bill.
Prof. Philippe Sands 
Helena Kennedy
1 April 2015 More...

Starts: Apr 1, 2015 12:00:00 AM

Exploring ‘Exploratory Governance': the Hertie Governance Report 2015

With the Eurozone crisis not yet over, Albert Weale, Professor of Political Theory and Public Policy at UCL, reviews the Hertie Governance Report 2015 as it analyses the key issues facing the European Institutions in terms of economic governance. As ad hoc solutions are found to deal with urgent matters, what does this mean for political accountability and reform in the EU, and what lessons have been learnt?
Prof. Albert Weale
14 April 2015 More...

Starts: Apr 14, 2015 12:00:00 AM

From Sick Man of Europe to Economic Superstar

Publication date: Feb 05, 2014 12:41 PM

Start: Feb 05, 2014 12:00 AM

New research suggests that economic policy played no essential role in the dramatic resurgence of Germany’s economy, with important lessons for Europe.
Prof Christian Dustmann et.al.
February 2014


In the late 1990s and into the early 2000s, Germany was often called “the sick man of Europe”. Today, after the Great Recession, Germany is described as an “economic superstar”. Germany’s number of total unemployed fell from 5 million in 2005 to about 3 million in 2008, and its unemployment rate had declined to 7.7 percent in 2010. Germany’s exports reached an all-time record of $1.7 trillion in 2011, which is roughly equal to half of Germany’s GDP, or 7.7 percent of world exports. 

How did Germany, with the fourth-largest GDP in the world (after the United States, China, and Japan) transform itself from “the sick man of Europe” to an “economic superstar” in less than a decade? In a recent paper published in the Journal of Economic Perspectives (Dustmann, Fitzenberger, Schönberg and Spitz Oehner, 2014; also available as CReAM Discussion Paper No. 06/14), we argue that:

  • The astonishing transformation of the German economy is due to an unprecedented process of decentralization of wage bargaining that led to a dramatic decline in unit labor costs and ultimately to an increase in competitiveness of the German economy.
  • The process of wage decentralization was made possible by the specific governance structure and autonomy of the German labour market institutions, not rooted in legislation, but laid out in contracts and mutual agreements between employer associations, work councils, and trade unions. In times of challenging economic circumstances, Germany’s labor market institutions thus proved far more flexible than previously thought.
  • The “Hartz” reforms (2002-2005) played no essential role in improving the competitiveness of German industry, as the process of decentralization of wage bargaining started in the mid-1990’s, nearly a decade before.

The findings provide a new view on the role of policy in the dramatic resurgence of Germany’s economy. The authors don’t believe that the political process alone—had the autonomy of wage bargaining not existed—would have been able to achieve a similar degree of wage decentralization in Germany, which ultimately led to the significant improvement in competitiveness that we have witnessed.

The research has important consequences for what Europe’s ailing Southern European countries can learn from the German experience. Other countries, such as Italy and France, have far more centralized and legally anchored labour market institutions than Germany, and reform will have to rely more on the political process. Whether similarly radical changes can be achieved in these countries remains therefore an open question, so the authors conclude.

The German experience does therefore not provide support for recommending the type of political reforms Germany implemented in 2003 (the “Hartz” reforms). Rather, Germany’s experience focuses attention on reforms that target the system of industrial relations by decentralizing bargaining to the firm level while keeping workers representatives involved.

  • Christian Dustmann, Professor of Economics and Director of CReAM, the Centre for Research and Analysis of Migration at UCL.
  • Uta Schönberg, Reader (Associate Professor), UCL Economics
  • Professor Bernd Fitzenberger, University of Freiburg
  • Professor Alexandra Spitz-Oener. Humboldt University

References:

Dustmann, C., Fitzenberger, B., Schönberg, U., Spitz-Oener, A. (2014): From Sick Man of Europe to Economic Superstar: Germany’s Resurgent Economy. Journal of Economic Perspectives 28(1), pp. 167-188; also available as CReAM Discussion Paper No. 06/14.