Bundesbank Criticizes Capitalism Debate

The Bundesbank on Tuesday waded into the current debate in Germany over the perceived excesses of capitalism, criticizing the government for sending conflicting signals about its willingness to implement much-needed structural reforms. "Critical comments regarding the competitive behavior of companies and investors have sparked fresh uncertainty," the German central bank wrote in its May monthly report. Combined with the government's decision to introduce a type of minimum wage in a number of key sectors as a weapon against wage-dumping from the eastward expansion of the EU, such comments "raise doubts about the willingness (of the government) to press ahead with its economic reforms," the Bundesbank wrote. "It must be recognized that jobs which cost more than employees contribute to a company's earnings cannot survive in an open economy." With unemployment in the euro zone's biggest economy at postwar highs and the government's popularity slumping to new lows in opinion polls, leading politicians have attacked what they see as the avarice of capitalism, likening multinational companies that slash jobs in order to boost profits to swarms of locusts that devour everything in their path and then move on. The Bundesbank insisted that "further decisive reforms" are needed if domestic demand in Germany is to emerge from its long stagnation.