Germany

   

Policy Performance

#6

Economic Policies

#4
With a stable, growing economy, Germany falls into the top ranks internationally (rank 4) with regard to economic policies. Its score on this measure is unchanged relative to 2014.

Despite the passage of new regulations, including a minimum wage and pension-system expansions, Germany’s economy has continued to show strong export performance and employment growth. Higher wages have stimulated domestic demand. The country’s stability during the euro crisis has allowed it to benefit from extraordinarily low interest rates on government bonds.

Unemployment rates are low and dropping, aided by a comprehensive toolbox of active labor-market policies. Youth unemployment rates are the EU’s lowest. The massive influx of refugees is viewed as a key challenge for future labor-market policymaking.

Growth has boosted tax revenue substantially, producing several years of balanced budgets despite the considerable costs associated with the refugee inflow. Marginal income-tax rates remain high. The strong economy has reduced the debt-to-GDP ratio more quickly than expected, though concerns over future spending commitments are rising.

Social Policies

#10
With a well-developed welfare system, Germany receives a high overall ranking (rank 10) in the area of social policies. Its score on this measure has gained 0.2 points relative to 2014.

A renewed focus on equity and quality has improved once-worrisome education outcomes, despite recent setbacks in science and mathematics test scores. The country’s dual vocational-training approach has become a model for countries with high youth-unemployment rates. The recently implemented minimum wage marks a shift away from transfer-based income support.

The health care system is of high quality, but cost pressures are growing. Parental-leave programs are generous, and child-care shortages are easing. Women’s employment rates have increased substantially since 2000, and fertility rates are climbing. Pension-policy reversals have raised sustainability questions.

The recent years’ refugee surge has caused considerable financial, logistical and social stresses. After initial delays, a government crisis-management policy has stabilized short-term support and integration efforts, while regulating future arrivals more tightly. A long-term integration strategy is still lacking. Politically motivated violence, in some cases directed at refugees, has risen sharply.

Environmental Policies

#3
As a leader in the renewable-energy sector, Germany falls into the top ranks (rank 3) in the area of environmental policies. Its score on this measure has improved by 0.3 points relative to 2014.

The country has launched a phase-out of nuclear power, but has balked at imposing a carbon tax to reduce the growing use of emissions-intensive coal. Instead, subsidies and public investment will promote energy efficiencies.

The country is a pioneer in wind- and solar-power technologies, as well as in energy-efficient infrastructure. New market-based rules are aimed at supporting renewable-energy investment while better matching the annual amount of power produced with the energy grid’s capacities. Government targets include a 40% renewable-energy share by 2025, rising to 55% by 2035.

Germany is an active participant in shaping international climate policy, and helped set the stage for the Paris climate agreement with its 2015 G7 presidency. The country ratified the Paris agreement in 2016. By 2014, the country had reduced CO2 emissions by nearly 27% compared to 1990, with a goal of 40% by 2020.

Democracy

#5

Quality of Democracy

#5
Reflecting a stable system founded on the rule of law, Germany’s score for democracy quality places it in the top ranks (rank 5) internationally. Its score on this measure has improved by 0.1 point since 2014.

Parties receive public and private funding, with some transparency concerns. A number of recent funding scandals have revealed a need to close monitoring gaps. The media is largely independent, with considerable diversity of ownership. Information-access laws are sometimes interpreted restrictively, but their provisions are being increasingly actively used.

While civil rights are broadly respected, intelligence-service spying scandals have prompted serious criticism, and new anti-terror measures have expanded security-service powers. Non-discrimination laws are extensive, but religious-freedom issues such as teachers’ rights to wear head scarves are proving controversial. A quota for women has been introduced for large companies’ supervisory boards.

The legal system, government and administration act predictably. Judicial review is strong. Corruption is rare, and political figures’ income-disclosure requirements have been strengthened.

Governance

#11

Executive Capacity

#12
Despite some inefficiencies during crisis periods, Germany scores relatively well (rank 12) with respect to executive capacity. Its score on this measure is unchanged relative to 2014.

The domestic agenda stems largely from negotiations between the coalition-partner party leaders, with the Chancellery holding only minimal strategic-planning resources. Improving strategic-planning capacities has not been a government focus. Ministries draft bills within their subject area with little Chancellery involvement, giving them leeway to pursue their own or their party’s interests

Several RIA programs are in place, producing generally high-quality reports. Sustainability concerns are regularly reviewed. While the government routinely meets with societal stakeholders, bargaining processes are not highly institutionalized. The coalition has achieved many goals effectively, though areas such as migration policy and the energy transition continue to present challenges.

Political conflicts over issues such as migration policy, exacerbated by the upcoming 2017 elections and the rise of a new right-wing populist party, have undermined the coalition’s communication coherence. A shift of tax revenues to the states and municipalities, along with new financial resources to support refugees, has strongly eased task-funding concerns.

Executive Accountability

#6
Despite a few recent oversight challenges, Germany scores well overall (rank 6) with regard to executive accountability. Its score on this measure has declined by 0.5 points relative to 2014.

Parliamentarians have sufficient resources and strong executive-oversight powers, with some recent exceptions emerging regarding the intelligence services. The Federal Court of Audit is well-funded and powerful. A parliamentary committee serving an ombuds function has limited importance.

Citizens demonstrate a low average level of political knowledge, reflecting declining interest in political and parliamentary debates. Public trust in the media has declined, particularly regarding refugee issues. However, public broadcasters do offer in-depth political reporting, and their market share has stabilized in recent years.

Decisions within the main political parties are made largely by top party elites. Employers’ organizations and unions are powerful and sophisticated. Other interest groups are increasingly influential, particularly at the local level.
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