FOR ONCE A HEALTHY TURN FROM DEMOCRACY IN GERMANY

The exhausting grind of consensus: In his push for economic reforms, Gerhard Schroeder is changing the way German democracy works (The Economist, Aug 28th 2003)

A MUCH heralded commission chaired by Bert Rurup, one of the few top German economists who get their hands dirty in politics, has at last told Germany's Social Democratic-led government how to reform the country's creaking public-pensions system. In the commission's view, pension contributions should be capped (at 22% of monthly gross salary), despite an ageing population. More strikingly, Mr Rürup's commissioners want to raise the legal retirement age to 67 from today's 65, adding a month a year between 2011 and 2035. They have also proposed a new formula to calculate pensions, which would take into account the age composition of the population. Most painfully, Germans would have smaller incomes to retire on: 40% of average gross earnings instead of the current 48%.

These suggestions are milder than the minimal changes that more radical economists say are needed to put public pensions on a stable footing. But they are probably the most ambitious that Chancellor Gerhard Schroeder has any hope of implementing. Even so, they have provoked a barrage of criticism and counter-proposals, in particular from his own ruling Social Democrats. And there may be further feverish negotiation before parts of the proposed reform are enacted in the Bundesrat, Germany's upper house of parliament, where the Christian Democrat-led opposition has a majority.

Whether or not Mr Rurup's plans are implemented, his commission shows how German democracy has changed in recent years—and illustrates Mr Schroeder's approach to reform. The members of the Bundestag, the lower house of parliament, are supposed to “represent the whole people”, according to Germany's Basic Law, its constitution. But German politics is increasingly being conducted in councils, at round tables and by groups composed of academics, politicians, businessmen, lobbyists and ordinary citizens that seek to further reform while preserving Germany's post-war system of consensus.

The proliferation of such groups is due largely to Mr Schroeder and his left-of-centre cabinet, who have created more of them than any other German government. New participants, alongside Mr Rurup's commission, include the National Ethics Council, the Commission for the Reform of Municipal Finances, the Council for Sustainable Development, and the Expert Commission on Corporate Governance. This commissionitis is now so pervasive that Hans-Jurgen Papier, head of the Constitutional Court, recently warned Germans of a rampant “deparliamentisation”. If parliament ceases to be the hub of politics, he said earlier this year, citizens will lose their sense of representation and elections will be devalued.

Yet Mr Schroeder's seeming fondness for commissions is not due to a contempt for parliament. Rather, suggests Frank-Walter Steinmeier, who runs the chancellor's office, it is because the many checks and balances of Germany's consensual system mean that decisions cannot be taken quickly enough to match the break-neck speed of change wrought by globalisation and new technology. Commissions, Mr Steinmeier wrote in a candid article in 2001, are a way of breaking Germany's systemic gridlock.

Fareed Zakaria's book examines this issue too and it is really quite central to the future of liberal democracy: the question is whether the relatively direct institutions of democracy are capable of reforming the welfare benefits that the people have voted themselves or whether it will require resort to more undemocratic means to effect real change. Recall that here in the States we were only able to pass the minimal Social Security reforms we did and close a few of our many excess military bases after similar commissions reported. Posted by Orrin Judd at September 2, 2003 3:55 PM