Welfare state: Who’s bigger on benefits, Germany or the UK?

The welfare states in Germany and the UK have been able to create a lot of legitimacy for governments. Politicians just had to promise to increase benefits and people would vote for them. But how do the systems compare?

Protest against welfare cuts in London (Getty Images/J. Talyor)

By now we’ve become accustomed to US President Donald Trump’s twitter tirades against everybody and everything. Nonetheless, it did come as surprise — on two fronts — that he felt it necessary to tweet his displeasure at the state of the UK’s welfare system mainstay, the National Health Service (NHS)

The Democrats are pushing for Universal HealthCare while thousands of people are marching in the UK because their U system is going broke and not working. Dems want to greatly raise taxes for really bad and non-personal medical care. No thanks!

First of all there will probably have been mild astonishment that he’s even heard of the NHS; secondly, consternation will have set in at his perspicacity of the situation.

For the NHS is, according to many observers, indeed “broke” and “not working” — witness its chronic underfunding, canceled operations and patients being treated in corridors or stuck in ambulances because beds aren’t available.

Read moreThe NHS and Brexit: Don’t get sick in the UK

NHS — the pride and joy of the welfare system

But it wasn’t always thus. Established in 1948 by Health Minister Nye Bevan, who championed social justice and the rights of working people, the NHS was set up to be egalitarian and non-contributory, funded instead directly from taxation. But that approach is expensive as it covered everyone, not just the employed.

“In Britain it’s a tripartite [system] made up of the individual, the employer and the state. And so there is a sense in which you either have to find a way to make changes to the tax base to pay for it within the economy that you’ve got, or you have to explore a separate way of paying for it via an insurance model. Or the alternative is that you move away from the idea that the NHS is a universal service model,” says Chris Renwick, senior lecturer in Modern History at the University of York and author of Bread for All: The Origins of the Welfare State.

Infographic showing health spending in UK and Germany

It’s success within the post-war welfare state, says Renwick, is largely attributed to the middle class demographic’s buy-in of the system, which could explain a certain reluctance to tinker with it. “If you introduce a system in which middle-class people are expected to contribute in a kind of transactional way for health care, there is a concern that it represents a break down of the social contract around certain things.”

Germany has a multi-payer, dual system and is mandatory for everyone living in the country. Depending on income and employment status, citzens choose between statutory health insurance provided by non-governmental “sickness funds,” and private insurers. Contributions are based on a percentage of income (statutory) and age and risk (private). The state, in its various levels of government, play next-to no role in the financing of health care.

Read more: German hospitals ‘carrying out unnecessary operations’

Renwick says that “historically speaking the German system is something of an important point of comparison. The Bismarckian structure of the late 1800s, which created the first universal health care, was in many ways the kind of inspiration for particular aspects of the British system in the late 19th and early 20th centuries.”

Watch video26:00

Made in Germany – The Economics of healthcare

Who’s bigger on benefits?

Traditionally, Germany has always had a much more generous type of welfare benefit. This is especially true of unemployment benefits whereby if someone becomes unemployed that person gets a very high percentage of his or her last income for a year.

“So for example as a university lecturer I would get paid 80 percent of my current wage and I would be very well placed and it wouldn’t be much of an incentive to get back into the workplace,” says Patrica Hogwood, Reader in European Politics in the Department of Politics and International Relations at the University of Westminster, who specializes in German politics and the welfare system.

In 2003, the then German coalition government’s introduced so-called Hartz IV welfare reforms to toughen the conditions on unemployment benefits, which proved deeply unpopular.

Read more: German issues in a nutshell: Hartz IV

By contrast British workers had at the back of their minds that if they became unemployed, income would be cut radically, thus creating the incentive to find a job as quickly as possible.

Germany essentially served as a role model until the middle of the 20th century after which the systems diverged and Britain “opts for a kind of peculiar version of the contributory system of national insurance,” as Renwick puts it. “So what Britain goes for is a flat rate system: So flat-rate contributions and flat-rate benefit payments out of the system. If you’ve paid in for 20 years you get the same amount as you do if you paid in for six months.”

Hogwood says the Anglo-Irish model was always intended to provide emergency, all-inclusive coverage.

“It wasn’t really ever thought to replace income in case of hardship. So if you become unemployed you would get a flat rate subsidy from the state. If you had been in well-paid employment it wouldn’t nearly cover the expenses that you were used to. If you’d been in low-paid employment it would be fairly similar to what you were used to. And the payments were over a short duration because it was assumed that people would find a new job fairly quickly.”

Read more:Debunking the myth of low German unemployment

Watch video05:50

No future for the young in Britain

Whither the welfare state?

These days structural and economic changes are making it very expensive to run the welfare systems.And public policy makers, says Hogwood, are struggling to cope. “Governments think that they can’t afford to maintain these old systems but they still want to retain that element of legitimacy that the welfare system generated for them because if you don’t maintain that, you get a breakdown in social cohesion. You get a conflict between social groups which we’re seeing now.”

While successive governments in both the UK and Germany have tinkered with changes to the welfare state to make it more cost-efficient and effective, the consensus seems to be that whole-sale, root and branch reform is needed.

“I think the bottom line is  that in spite of the different approaches that they’ve taken traditionally, both of these systems are going the same way because both of them are set on a neo-liberal course to prioritize flexibility of labor and competitiveness of the economy over welfare. They want to cut welfare benefits but both of them have got the challenge of how to prevent social conflict and how to maintain the legitimacy of government if people are so angry,” says Hogwood.

“Gradually there is a class of people being left out because they just cannot pay supplementary costs.”

COURTESY: DW

Central bankers seek to soothe nerves after market turmoil

Policymakers from the US Fed, the European Central Bank and the Bank of England have described the recent sell-off in stock markets as a healthy correction, saying this won’t knock them off their monetary policy path.

Frankfurt skyline (picture alliance/Eibner-Pressefoto)

After investors woke up to the likelihood that monetary policymakers are serious about pulling back stimulus this year to control inflation, Dallas Fed President Robert Kaplan said on Thursday that the recent market volatility in itself was not enough to change the US Fed’s base scenario.

Nevertheless, he told a business conference in Frankfurt, Germany, that the US central bank was “highly vigilant” about the turbulence and would study whether it had any effect on the real economy.

Read more: Opinion: Markets plunging — keep calm and carry on

“At this point, I don’t see this market adjustment spilling over into financial conditions — but I’ll be watching carefully,” he said, adding: “My base case is the same.”

Under the US Fed’s current base scenario, the central bank will continue to remove policy accommodation gradually, including a reduction of its bloated balance sheet and likely raising interest rates three times this year.

However, US stocks sold off sharply this week on worries that rising wage inflation could force the Fed to tighten policy more quickly, possibly with a fourth rate hike.

Watch video01:32

Stocks sell-off hits Europe, but no panic

No worries

As markets have calmed down and recovered some ground in the course of the week, European central bankers also brushed aside the sell-off that rippled through global stock markets.

Read more: Wall Street’s late surge halves losses

Policymakers should not “allow ourselves to become unsettled by the decline in equity prices we have just witnessed,” Bundesbank President Jens Weidmann said in Frankfurt.

Weidmann, who is also on the board of the European Central Bank (ECB), said the central bank for the euro area would continue to pump liquidity into the eurozone, despite almost five years of economic growth. Yet Weidmann noted that “if the expansion progresses as currently expected, substantial net purchases beyond the announced amount do not seem to be required.”

While the US Fed has stopped its asset purchasing program, known as quantitative easing (QE), the ECB is still buying eurozone bonds at a rate of €30 billion a month at least until September.

Read more: ECB cuts bond purchases to end era of easy money

ECB chief economist Peter Praet told the conference in Frankfurt that policy normalization would be a “long, complex” process.

BoE crashing the gate?

Bank of England (BoE) Governor Mark Carney also described the recent ups and downs in financial markets as “not an entirely surprising development.”

However, rising inflation and a tightening labor market in Britain may force BoE policymakers to act earlier than their counterparts on the Continent, he told reporters in London on Thursday.

“It will be likely to be necessary to raise interest rates to a limited degree in a gradual process, but somewhat earlier and to a somewhat greater extent than what we had thought in November,” Carney said. “Domestic inflationary pressures are likely to firm.”

Having already raised interest rates in November for the first time in a decade, the BoE put investors on alert for another increase perhaps as soon as May by lifting its forecasts for economic growth and saying inflation will remain above its 2 percent target.

Aftershocks from the global stock sell-off continued reverberating in markets on Thursday, with shares falling in Europe and rising in Asia. But for UBS Chairman Axel Weber, a former ECB policymaker, that’s nothing to fear. “The market has shown an unprecedented level of complacency. A correction was waiting to happen,” Weber told Bloomberg News.

Watch video02:03

Strong wages spook stock markets

uhe/aos (Reuters, dpa)

 

COURTESY: DW

Remainers launch campaign for second Brexit referendum

Brexit opponents have begun pushing for a new referendum in the hopes that British voters have had a change of heart about leaving the European Union. That may be the case, reports Samira Shackle from London.

Demonstrators take part in a protest to show solidarity with the EU following Britain's Brexit referendum in 2016

At the end of December, former Labour minister Andrew Adonis resigned from his position as chair of the government-backed National Infrastructure Commission. His strongly worded resignation letter made his reasons clear: “The European Union withdrawal bill is the worst legislation of my lifetime,” he wrote. “It arrives soon in the House of Lords and I feel duty bound to oppose it relentlessly from the Labour benches.”

In the month that has passed since, Adonis has dedicated himself to campaigning for a second referendum on Brexit, introducing a proposal in the House of Lords and this week launching a nationwide tour to convince the public.

Read more: UK waits to see how the post-Brexit winds will blow

Calls for a second public vote have long been dismissed by politicians; both conservative Prime Minister Theresa May and opposition leader Jeremy Corbyn, head of the Labour party, have, at different points, ruled out the possibility. Any talk of a second referendum has been portrayed in the right-wing media as anti-democratic, a cause promoted by “out-of-touch Remoaners.” Yet it might not be out of touch after all. A January poll by ICM and the Guardian found a 16-point margin in favor of a referendum on the terms of the final Brexit deal.

Read more: Brexit Diaries: The Three Musketeers of Brexit make a return

A sitting member of the House of Lords, Adonis is hardly the ideal figurehead given the criticism of Remain supporters being elitist. On his tour around the country, he is being accompanied by a group of young anti-Brexit activists. Femi Oluwole, co-founder of “Our Future, Our Choice,” is one of these activists. He recently quit a traineeship at the EU Fundamental Rights Agency to campaign to stop Brexit.

“I know what’s coming if Brexit happens, and if I look back in 20 years, and I haven’t done everything in my power to stop it, I’d hate myself,” Oluwule told DW. “The fact is, the under-55 population of the UK voted to remain in the EU. If Brexit is supposed to mean making ‘all our own laws’ and negotiating ‘all our own trade deals,’ then Brexit can’t be completed in less than 20 years. By anyone’s maths, by 2021 we’re a “remain” country, based purely on age statistics.”

New referendum is an outside possibility

Until recent weeks, the whole idea of a second referendum seemed preposterous. But it remains an outside possibility as the clock ticks and political pressure over the Brexit deal mounts.

Read more: 2018: The year of Brexit decisions

“A second referendum is still a long shot, but it is gathering momentum and it looks more likely than it has at any time before — partly because the government is at serious risk of splitting as reality bites around reconciling the promises they’ve made on leaving the customs union and having no border in Ireland,” said Polly Mackenzie, director of the think tank Demos. “If that splits the government in a way that triggers a crisis, then a second referendum maybe the only way forward.”

In mid-January, Brexit campaign leader Nigel Farage appeared to advocate a second vote — although he later backtracked from this, saying he’d only meant that “Leave” supporters should prepare for the possibility. Adonis recently unearthed some 2011 comments by Brexit-supporting Tory MP Jacob Rees-Mogg: “We could have two referendums,” he said. “As it happens, it might make more sense to have the second referendum after the renegotiation is completed.”

Read more: Irexit: Brexit’s Nigel Farage takes fight to Ireland

A person holds a sign that reads 'Don't blame me I voted #Remain'Remainers only hope is a new referendum

Such statements from Brexit’s most high-profile advocates certainly make it harder to portray a second referendum as a plot by “Remain” campaigners. “Saying we should ignore the legitimate result of the referendum is out of touch,” says Mackenzie. “Saying we should ask people what they think cannot logically be out of touch — that’s just a convenient argument to shut people up.”

Conservatives split

Although Adonis and others are mobilizing to campaign for a second referendum, if it happens, it will most likely be because of splits in Westminster rather than political activism. “It all depends on whether the EU sticks to its guns on a final decision by autumn, or allows May to delay further,” Tom Follett, policy and projects manager at think tank ResPublica, told DW. “Politicians waiting for a big change in opinion won’t get it until May is forced once and for all to demonstrate that there is no ‘have cake and eat it’ option.”

The question of Europe has long divided the Conservative Party, and these divisions are still very much present. In recent months, May has been attacked by Brexiteers such as Rees-Mogg, because, despite her tough rhetoric, her actions point to a softer Brexit. Meanwhile, Remain-supporting Tories such as Anna Soubry have also criticized the government. It might be that a second referendum is needed in order to get unity in parliament.

Read more: The NHS and Brexit: Don’t get sick in the UK

Andrew AdonisAndrew Adonis may not be the most appealing figure to lead the campaign

“Going to the people could look like an attractive get-out for politicians facing a choice between a jobs-killing Brexit or a rule-taking relationship with the EU,” added Follett. “It is then that Adonis’s campaign will really matter because it establishes a second referendum as a ‘serious’ option. But by the time that big decision must happen, there could be very little opportunity left for parliament to arrange a referendum.”

For his part, Oluwole plans to continue campaigning. “It is not democracy if the decision of the people is based on the lies of those who hold the power. For the most part, I don’t blame people for voting Brexit. They listened to what their trusted politicians told them and did their best to make the right decision. However, we know that those most affected by Brexit voted against it. So we have a moral obligation to correct that injustice.”

Watch video04:36

The Brexit Big Band

COURTESY: DW

‘Real risk’ of Islamic State fighters on migrant boats, Italy warns

Mediterranean migrant boats headed for Europe could be carrying fugitive Islamic State fighters, Italian Foreign Minister Angelino Alfano has asserted. He’s been hosting African, EU and UN officials at a Rome conference.

Migrants, most of them from Eritrea, jump into the water from a crowded wooden boat

The recent military evictions of the Islamic State militia — in the likes of Syria — presented an “absolute and real risk” of jihadi fighters trying to slip into Europe, Italian Foreign Minister Angelino Alfano told a conference on migration and security in Rome Tuesday.

“It is in our interests to defeat the business model of traffickers whose profits are used to finance organized crime and, we have the evidence for this, terrorism,” Alfano said.

Angelino Alfano Defeat traffickers, urges Alfano

At the same time, he warned against “exploitation of the immigration issue in order to stir up fears and gain easy consensus.”

Represented at Tuesday’s conference were 13 European and African countries, including partly lawless Libya.

Alfano’s remarks precede Italy’s March 4 parliamentary election in which the arrival of more than 600,000 migrants over the past four years is a key issue — underscored by last Saturday’s drive-by attack in Macerata by an Italian neo-Nazi.

Watch video01:53

Racial motive suspected in Italy drive-by shooting

Italy coordinates the vast majority of sea rescues between northern African and its southern coast, including islands such as Lampedusa.

On Monday, former prime minister and Democratic Party leader Matteo Renzi blamed part of the problem on populist former Prime Minister Silvio Berlusconi, whose center-right opposition alliance is polling strongly.

“If in Italy migrants are arriving, it’s because someone made war with Libya, and the premier was Berlusconi,” Renzi said, referring to NATO’s 2011 air strike campaign against the late Moammar Gadhafi regime.

On Sunday, Berlusconi claimed Italy had been left with a “social bomb ready to explode” by center-left Democratic Party governments, once led by Renzi.

Watch video00:52

Silvio Berlusconi on immigration in Italy

Last week, the EU’s border agency, Frontex, launched a replacement Mediterranean operation called Themis, removing the obligation of the previous mission, Triton, to bring all those rescued only to Italy, to include, for example, Malta.

Frontex spokeswoman, Izabella Cooper, said no rescued migrants would be taken [back] to transit non-EU nations such as Tunisia and Libya, where conditions have been widely deplored but instead to the “nearest place of safety” in accordance with international maritime law.

Under an Italy-led deal to assist Libya’s coast guard, arrivals in Italy from the largely lawless Mediterranean nation dropped 26 percent last year — while an EU deal with Turkey largely shut down the so-called Balkan route.

Instead, pressure has shifted west to Algeria and Morocco as migrants, still intent on reaching Europe, head for Spain, some via its African outposts of Ceuta and Melilla.

Watch video07:25

Refugees in Italy as Europe’s new slaves

More than 26,300 migrants reached Spain last year, according to the International Organization for Migration (IOM).

Spain, which a decade ago began costly deterrence and repatriation deals with sub-Saharan countries, faces a new situation, according to non-governmental groups.

Flows will intensify “along the Western Mediterranean route,” warned Estrella Galan, secretary general of the asylum-assistance group Commission for the Protection of Refugees (CEAR) last month.

“If we don’t change our policies we are going to continue an endless cycle of replicating migration patterns from one location to another,” she said.

ipj/rt (Reuters, AP, dpa, AFP)

COURTESY: DW

Mysterious mass grave likely contained 300 Vikings from ‘Great Heathen Army’

Mysterious mass grave likely contained 300 Vikings from ‘Great Heathen Army’
Some 300 bodies discovered in an ancient mass grave in England may belong to Vikings from the ‘Great Heathen Army’ of the 9th century, new research suggests.

A team of archaeologists from the University of Bristol believe that the remains, initially discovered in the ‘80s, are those of warriors sent to England to fight the King of Mercia, driving him into exile in the year 873 AD. A number of artifacts including weapons and silver coins were also believed to be from the time.

Initial radiocarbon dating of the remains, discovered in Derbyshire, England, revealed that they were too old to be of Viking origin, shrouding the site in mystery until this recent revelation.

“The previous radiocarbon dates from this site were all affected by something called marine reservoir effects, which is what made them seem too old,” study lead author Cat Jarman explained in a university news release. Essentially, this means that if a person ate a lot of fish while alive, his remains will appear more ancient.

“When we eat fish or other marine foods, we incorporate carbon into our bones that is much older than in terrestrial foods. This confuses radiocarbon dates from archaeological bone material and we need to correct for it by estimating how much seafood each individual ate,” she added.

Most of the dead, about 80 percent, were men aged between 18 and 45. Several showed signs of violent injury consistent with war wounds. A separate double grave from the site was also dated from the the time.

An older male was buried with a Thor’s hammer pendant and a Viking sword among other artefacts. This warrior had, according to the researchers, “received numerous fatal injuries around the time of death, including a large cut to his left femur.”

Furthermore, a boar’s tusk had been placed between the warriors legs, indicating that he may have received an injury that severed his penis, and the boar’s tusk, a replacement to be used in the afterlife.

Not all of the remains belonged to men, about 20 percent were female. Four juveniles were also buried, albeit in a separate grave. The children, aged between 8 and 18, were buried together with a sheep jaw at their feet.

READ MORE: Iconic viking warrior was a woman, DNA test confirms

At least two of them had suffered traumatic injuries, leading researchers to posit that “this may have been a ritual grave, paralleling accounts of sacrificial killings to accompany Viking dead from historical accounts elsewhere in the Viking world.”

The teams research was published Friday in the journal Antiquity.

Courtesy: RT

German intelligence part of secret anti-terror unit targeting returning IS fighters – report

Germany’s secret service has reportedly joined a US-led unit targeting jihadis returning to Europe from Iraq and Syria. Officials have warned that many families of “Islamic State” fighters have already returned home.

Fighters from rebel factions in Damascus prepare their ammunition (Getty Images/A.Almohibany)

Germany’s intelligence agency, the Bundesnachrichtendienst (BND),  has been taking part in a secretive US-led anti-terror operation known as “Gallant Phoenix,” which targets European jihadis returning home from Syria and Iraq.

According to a report in German weekly Der Spiegel on Saturday, the BND joined the secret operation back in October.

Read more: Germany’s domestic intelligence agency warns of IS sympathizers

Led by a US Joint Special Operations Command center in Jordan, Gallant Phoenix collects intelligence on fighters who fought for the likes of the so-called “Islamic State” (IS) and other Islamist militia groups. Relevant information includes documents, data, DNA traces and fingerprints that have been retrieved from former IS strongholds.

Watch video03:55

Steinberg: About 1,000 IS fighters have returned to Europe

Twenty-one countries are reportedly part of the operation.

Der Spiegel said it had received information on the BND’s role in Gallant Phoenix from a source in the German Left party. Both the German government and BND refused to comment on the report.

German fears over returning jihadis

Back in 2016, the BND initially declined a US offer to join Operation Gallant Phoenix out of fear that Washington would use the information to strike against German jihadis in the Middle East.

However, Berlin’s alleged change of heart coincides with concerns expressed by senior officials over the wives and children of IS fighters who were back in Germany or slated to return soon.

Read more: German intel chief warns of potential threat posed by wives, children of German jihadis

In December, Hans-Georg Maassen, the head of Germany’s domestic intelligence service, the Office for the Protection of the Constitution (BfV), warned that many of the women repatriated to Germany from former IS bastions “had become so radicalized and identify so deeply with IS ideology that, by all accounts, they must also be identified as jihadis.”

Listen to audio04:35

Inside Europe: The threat from IS in Belgium

Maassen also warned that children had been “brainwashed” in IS schools and could grow up in Germany as second-generation jihadis. “It’s a problem for us because many of these kids and teenagers can sometimes be dangerous,” he said.

Around 950 German jihadi-sympathizers are thought to have traveled to Syria and Iraq since 2014 to fight or serve on behalf of IS. Around 20 percent of them are reportedly female.

However, with the Sunni militant group suffering heavy losses in resources and territory, the German government expects to see an imminent increase in the number of radical Islamists returning home.

So far, around one-third of German jihadis who traveled to the Middle East have already returned.

The BND has said it has identified 705 living in Germany who are considered to be at risk of committing a terrorist attack on German soil — more than five times as many as in 2013.

Watch video03:32

“Islamic State” recruits return to Europe – Q&A with Maxim Bratersky

COURTESY: DW

Russian accused of running spam network extradited to US

Suspected Russian hacker Pyotr Levashov pleaded not guilty before a US judge after being extradited from Spain. Prosecutors claim he ran a massive computer network that sent out spam and installed malicious software.

Russian hacker Pyotr Levashov before a Spanish judge (picture alliance/AP Photo/J.P.Gandul)

Spanish authorities have extradited to the US a Russian man suspected of carrying out cybercrimes using bulk spam emails and malicious software, US officials announced Friday.

Read moreWhat is ransomware?

Pyotr Levashov, a 37-year-old from St. Petersburg, pleaded not guilty to the charges of wire and email fraud, hacking, identity theft and conspiracy after appearing before a federal judge in the US state of Connecticut. He remains in detention.

Watch video01:38

Countries that receive most spam emails

Levashov was arrested in April while vacationing with his family in Barcelona.

In October, Spain’s National Court granted the US extradition request, rejecting a counter-extradition request from Russia.

Read moreCriminals hack their way to the top

US prosecutors say Levashov ran the sprawling Kelihos botnet — a network involving up to 100,000 infected computers that sent spam emails, harvested users’ logins and installed malicious software that intercepted bank account passwords.

According to the indictment, the network generated and distributed more than 2,500 spam emails a day and allegedly victimized thousands of people in the US.

Watch video01:03

How hackers can boost cybersecurity

Moscow commented that Spain’s decision to extradite Levashov was “disappointing.” Following his arrival to the US, the Russian embassy in Washington told the Russian news agency Interfax that they were ready to provide the “necessary assistance” to the defendent.

Previously, Russia’s foreign ministry warned Russian travelers “about the threat to be detained or arrested on the warrants issued by US authorities and security services in the third-party countries.”

‘Political’ motive to case

Levashov has denied the charges and fought extradition, saying he feared what would happen if he were to be sent to the US.

His lawyers in Spain told the court that Levashov previously served in the Russian army and worked for Russian President Vladimir Putin’s United Russia party.

Levashov was concerned that US investigators would force him to turn over confidential information to US authorities.

The Spanish judges eventually rejected these arguments.

Levashov could face up to 52 years in prison if he is convicted of the charges at trial.

Watch video01:23

Facial hack raises cybersecurity fears

dj,rs/cmk (AP, AFP, Reuters, Interfax)

COURTESY: DW