Calling All Citizens To Pay Up

German Foreign Minister Joschka Fischer has called for a general change in the country's social welfare structure. "Linking our social system to gross wages is not a lasting solution," he told the German daily Financial Times Deutschland on Thursday.

Social costs, such as health and unemployment insurance, are split equally between employers and employees. Employers in particular have strongly criticized the high non-wage labor costs existing in Germany.

In order to make wages more competitive, social welfare needed to be secured on a wider basis, Fischer said. The introduction of "citizen's insurance" could be the solution for the future.

According to Fischer, not just employees, but all citizens would have to contribute to the social insurance system. Currently, civil servants and self-employed persons are not required by law to do so.

In return, the percentage rates of social contributions could be significantly cut. This would thus reduce non-wage labor costs.

Sending the right signals

"We have to become more competitive," Fischer said. "We cannot accept the high levels of unemployment. In order to reduce them, we need more investment, also from abroad." But a major problem was that the German social systems sent false signals to the employment market, he added.

The landmark deal reached earlier this week to cut back Germany's costly health system marked the beginning of reforms.

Fischer said he expected citizen's insurance to eventually be introduced in Germany. The coalition government of Social Democrats and Greens agreed on this point, he said.

The Minister said he was glad that the current debate was not only focussing on changes and more efficiency in the social structure, but also on an overall change to the system.

Support from the other side

Fischer is not just getting support from his own ranks. Opposition party member Horst Seehofer from the CSU is also in favor of citizen's insurance.

Health expert Seehofer, who was the opposition's chief negotiator in the healthcare reform, said there still needed to be an answer to the problem of an aging society. "I am convinced that we have reached the limits of possible reforms of the existing health insurance system," he told German television ZDF.

"There cannot be more reforms within this system, without questioning the system itself or placing unacceptable demands on people." Every party thus needed to consider systematic changes. He supported the concept of citizen's insurance, although it would not be easy to push through in the opposition CDU/CSU, he said.