We also made pensions and health insurance more flexible and placed greater emphasis on the responsibility of the individual in keeping costs down.
For the German welfare state, this step marked a paradigm shift that many believed would carve away hard-earned benefits. In fact, we were able to strengthen the system by making Germany globally competitive and ensuring that benefits remained affordable for our aging population. At the same time, we raised expenditures in education, research, and innovation. This gave a further boost to the German industrial base. Implementing these reforms was politically challenging – they cost me my job – but the result has shown it was worth it: Germany is now the best situated of all European economies. France, Italy, Great Britain, and others now have to catch up with this reform process, but under much more difficult conditions.
With Germany’s strength, however, comes a political responsibility for Europe in overcoming the financial crisis and spurring growth in the global economy as a whole. Germany has to contribute its share to stabilizing Europe’s economy and its currency, the euro.
Though it could have acted with greater determination when the crisis first began to unfold, the current German administration is now doing this.