The Federal Chancellor discussed possible relief for citizens with business and the trade unions. However, the different interests of those involved will make it difficult to produce governmental results.
Of course, it can’t do any harm if the Chancellor invites representatives from business, trade unions, the Bundesbank and the Council of Economic Experts to the Chancellery. The fight against inflation and the threat of energy shortages make it absolutely necessary to “arm and stick together”, as Olaf Scholz put it.
Even with the best intentions of everyone involved, no miracles can be expected from the “Concerted Action”. The interests of those involved are too different, and their responsibilities too different. Wage increases help workers, but translate into higher costs and prices for companies. New relief packages are putting a strain on the state budget and leading to calls for tax increases, which in turn would weaken the economy.
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If employers and unions agree on wage agreements that do not add to inflation, it would no doubt help. However, the parties to the collective bargaining agreement cannot solve the biggest challenge facing this country. It is about the extent to which the state will take over the rapidly increasing energy costs for families with low incomes, for retirees with low pensions, for students and last but not least for those receiving Hartz IV and other forms of basic security. We still have a lot to do, because the increased gas prices will only unfold their full force in the autumn. Many households at the lower end will then no longer be able to pay their bills. And some companies will not be able to pass on the tripled or quadrupled energy costs to their customers and will therefore have to give up.
In this respect, at the start of these rounds of talks, the Federal Chancellor was not just concerned with “linking hands and sticking together.” By asking many associations and institutions to talk, Olaf Scholz also started a clever diversionary tactic. He is trying to hold the collective bargaining parties accountable to distract from the fact that he and his government ultimately have to decide how Germany wants to master these enormous challenges. You can definitely talk about it in a “concerted” way – but not decide.
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