Monday 5 December 2016

Why do we ape Boston instead of Berlin?

We could learn a lot by studying the German way of doing things

Published 28/08/2010 | 05:00

READING a local newspaper in a sunny cafe in northern Germany this week, drinking a cup of excellent black coffee that cost 90 cent, I was struck once again by the differences between Ireland and Germany and Health Minister Mary Harney's often repeated remark that we have more in common with Boston than Berlin.

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Those differences go much further than the price and quality of a cup of coffee, but that is not a bad place to start.

German coffee is much cheaper than anything available here, much better quality and comes in much smaller sizes, which suits the German penchant for frugality and quality.

Despite an economy in freefall, we still appear to be addicted to the sort of overpriced but poor-quality drink that is served in wasteful paper cups popular on the other side of the Atlantic.

After more than two decades living and reporting on both countries and the United States, I remain puzzled by our reluctance to learn from Europe while embracing all things American, no matter how inferior they are to their European counterparts.

When the Irish and US economies were booming, this was perhaps understandable.

But now it seems strange we do not look eastwards from time to time for ideas on how to run our country, especially as the Germans are making a much better stab at things these days than either the Irish or the Americans.

In Germany, unemployment has fallen to levels last seen in the early 1990s and the economy is expanding at a speed last seen before the reunification of the country. So what have the Germans done right, and what can we learn from a country that -- like our own -- has high wage costs and depends on exports for survival?

Perhaps the most glaring difference is that despite the signs of economic growth, Germany is still implementing harsh spending cuts in all corners of ordinary life.

Sports clubs, orchestras, motorways, military spending -- everything is being scaled back. Just this week, the charismatic German defence minister Karl-Theodore von Guttenberg announced that a centuries-long tradition of military conscription will end to save money.

These savings are a strong signal that no area of spending is taboo and the government there is taking the difficult decisions needed to get things under control.

Cherished

Here, there is no evidence that cherished political projects face the chop; our leaders seem to have stopped believing that we can turn the ship around.

It seems to me that one of our problem is that we are governed by bankers and economists who have mostly trained in American universities.

It is almost impossible to think of an economist, from Central Bank governor Patrick Honohan down, in any senior government position who has been trained outside the English-speaking world.

The Government compounds this problem by buying advice from the Morgan Stanleys of this world rather than German and French banks and management consultants. These American-trained economists are influenced by a spendthrift culture that believes in consumption and credit.

Germans, on the other hand, tend to be inspired by the success of former economics minister Ludwig Erhard, who was the father of the country's post-war economic miracle.

Unlike Franklin Roosevelt or his ideological successors such as President Barack Obama, who both flooded the US economy with freshly printed dollars, Erhard believed people would only work when money became tight. "We must either make do with less or work more," he once told the Germans, and it is a lesson they still believe today.

One place we can see this at work in Ireland today is Aer Lingus, where a German chief executive has slashed waste, ignored posturing about political shibboleths such as Shannon and so saved the airline that was once the laughing stock of Europe.

Erhard's lesson really is sometimes very simple: make do with less or work more.

While Germany is busy saving, it is also busy reforming, which is refreshing to anybody used to the glacial and uninspiring pace of reform here.

One important area of reform is the education system. Reform there is not aimed at saving money but rather raising educational standards following the so-called PISA reports, which compared educational standards in many countries and found German and Irish educational standards to be roughly similar -- and not very good.

The reports caused consternation in Germany, but were met with widespread indifference here.

In Hamburg, voters were asked a few weeks ago to decide on radical changes to the grammar-school system.

They chose not to alter the already varied and complex system after a long debate, but the idea was refreshing to an Irish parent who is used to a system where all schools teach the same subjects, start at the same time every day and offer a small range of dreary subjects that seem to offer little to those who are not academic.

Imagine how exciting it would be here if parents were able to vote on whether their children should study compulsory Irish, skip the rush hour by starting school at 8am or wear uniforms?

The German vote posed the question of why must everything be decided by teachers and the Department of Education without parents and the rest of society being consulted?

Action

Germany is, in short, an exciting place to be right now. A country that embraces change and hard work and is enjoying some success as a result.

Here at home, there are many reasons to believe that people also want to see action, the sort of action needed to bring spending under control and the sort of action needed to improve our schools and hospitals.

A belief that less can be more. A belief that a simple cup of cheap and well-made coffee is better than half-a-litre of overpriced froth and foam.

Irish Independent

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