GERMANY:Germans have been the financial squirrels of Europe for years, hoarding rather than spending their earnings. Now we know why.
New government figures show that German net wages have plummeted to their lowest level in 20 years.
The average German employee's take-home pay last year was €15,845 in real terms, not far ahead of the adjusted 1986 average of €15,785. The few modest pay increases have been cancelled out by inflation and rising social contributions.
While salaries increased by 4.1 per cent over the past five years, for instance, prices for the same period rose by 7.1 per cent.
Even more painful has been the end of the traditional "13th month" Christmas bonus.
Small wonder, then, that winter holidays are being cancelled and people continue to drive their seven-year-old cars.
Michael Hüther of the employer-friendly Institute of German Economy (IW) praised the modest wage increases since 1997. "As a result, German competitiveness has increased - it was an unavoidable adjustment," he said, crediting the wage policy with creating 600,000 jobs in recent months.
Government officials said it was impossible to compare the 1986 west German figures with today. Looking at post-unification figures only, wages are at their lowest real since 1997.
"We need urgent action for the man on the street - their wallets have been emptied over the last years," said Michael Sommer, head of Germany's trade union federation. Unions are campaigning for the introduction of a minimum hourly wage of €7.50.
