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Fiscal crises threaten Europe's generous benefits
Financial crisis threatens Europe's cherished system of social welfare benefits
LONDON (AP) -- Six weeks of vacation a year. Retirement at 60. Thousands of euros for having a baby. A good university education for less than the cost of a laptop.
The system known as the European welfare state was built after World War II as the keystone of a shared prosperity meant to prevent future conflict. Generous lifelong benefits have since become a defining feature of modern Europe.
Now the welfare state -- cherished by many Europeans as an alternative to what they see as dog-eat-dog American capitalism -- is coming under its most serious threat in decades: Europe's sovereign debt crisis.
Deep budget cuts are under way across Europe. Although the first round is focused mostly on government payrolls -- the least politically explosive target -- welfare benefits are looking increasingly vulnerable.
"The current welfare state is unaffordable," said Uri Dadush, director of the Carnegie Endowment's International Economics Program. "The crisis has made the day of reckoning closer by several years in virtually all the industrial countries."
Germany will decide next month just how to cut at least 3 billion euros ($3.75 billion) from the budget. The government is suggesting for the first time that it could make fresh cuts to unemployment benefits that include giving Germans under 50 about 60 percent of their last salary before taxes for up to a year. That benefit itself emerged after cuts to an even more generous package about five years ago.
"We have to adjust our social security systems in a way that they motivate people to accept regular work and do not give counterproductive incentives," German Finance Minister Wolfgang Schaeuble told news weekly Frankfurter Allgemeine Sonntagszeitung on Saturday.
The uncertainty over the future of the welfare state is undermining the continent's self-image at a time when other key elements of post-war European identity are fraying.
Large-scale immigration from outside Europe is challenging the continent's assumptions about its dedication to tolerance and liberty as countries move to control individual clothing -- the Islamic veil -- in the name of freedom and equality.
Deeply wary of military conflict, many nations now find themselves nonetheless mired in Afghanistan on behalf of what was supposed to be a North Atlantic alliance, shying away from wholesale pullout while doing their utmost to keep troops from actual combat.
Demographers and economists began warning decades ago that social welfare was doomed by the aging of Europe's baby boomers. Some governments had been trimming and reforming, but now almost all are scrambling to close deficits in order to prevent a wider collapse of confidence in the euro.
"We need to change, to adapt ... for the sake of the protection of our social model," European Union Commissioner Joaquin Almunia of Spain told reporters in Stockholm Thursday.
http://finance.yahoo.com/news/Fiscal-crises-threaten-apf-242192521.html?x=0
remind me again why many liberals want to be like europe....
Financial crisis threatens Europe's cherished system of social welfare benefits
LONDON (AP) -- Six weeks of vacation a year. Retirement at 60. Thousands of euros for having a baby. A good university education for less than the cost of a laptop.
The system known as the European welfare state was built after World War II as the keystone of a shared prosperity meant to prevent future conflict. Generous lifelong benefits have since become a defining feature of modern Europe.
Now the welfare state -- cherished by many Europeans as an alternative to what they see as dog-eat-dog American capitalism -- is coming under its most serious threat in decades: Europe's sovereign debt crisis.
Deep budget cuts are under way across Europe. Although the first round is focused mostly on government payrolls -- the least politically explosive target -- welfare benefits are looking increasingly vulnerable.
"The current welfare state is unaffordable," said Uri Dadush, director of the Carnegie Endowment's International Economics Program. "The crisis has made the day of reckoning closer by several years in virtually all the industrial countries."
Germany will decide next month just how to cut at least 3 billion euros ($3.75 billion) from the budget. The government is suggesting for the first time that it could make fresh cuts to unemployment benefits that include giving Germans under 50 about 60 percent of their last salary before taxes for up to a year. That benefit itself emerged after cuts to an even more generous package about five years ago.
"We have to adjust our social security systems in a way that they motivate people to accept regular work and do not give counterproductive incentives," German Finance Minister Wolfgang Schaeuble told news weekly Frankfurter Allgemeine Sonntagszeitung on Saturday.
The uncertainty over the future of the welfare state is undermining the continent's self-image at a time when other key elements of post-war European identity are fraying.
Large-scale immigration from outside Europe is challenging the continent's assumptions about its dedication to tolerance and liberty as countries move to control individual clothing -- the Islamic veil -- in the name of freedom and equality.
Deeply wary of military conflict, many nations now find themselves nonetheless mired in Afghanistan on behalf of what was supposed to be a North Atlantic alliance, shying away from wholesale pullout while doing their utmost to keep troops from actual combat.
Demographers and economists began warning decades ago that social welfare was doomed by the aging of Europe's baby boomers. Some governments had been trimming and reforming, but now almost all are scrambling to close deficits in order to prevent a wider collapse of confidence in the euro.
"We need to change, to adapt ... for the sake of the protection of our social model," European Union Commissioner Joaquin Almunia of Spain told reporters in Stockholm Thursday.
http://finance.yahoo.com/news/Fiscal-crises-threaten-apf-242192521.html?x=0
remind me again why many liberals want to be like europe....
