Tag: Germany

Germany’s opposition Christian Democratic Union, the favourites to win federal elections expected in September, have won the powerful support of one of the most prominent German businessmen for an increase in value added tax to help offset the country’s high labour costs. Klaus Zumwinkel, chief executive of Deutsche Post, Europe’s biggest postal group, called for an increase in VAT from 16 to 20 per cent in order to finance the country’s creaking social security system, which is funded by levies on employees and employers.
Non-wage labour costs are widely regarded as the biggest obstacle to cutting unemployment from a post-war high of almost 5m. In an interview with the Financial Times, Mr Zumwinkel said that Germany’s cradle-to-grave welfare system, dating from the time of Bismarck in the 19th century, “has to be dramatically changed. . . The only solution is an increase in VAT. It has to go to 20 per cent”.

Deutsche Post World Net AG is targeting cost-cuts ahead of the loss of its monopoly at the end of 2007 by outsourcing some services and employees and possibly passing on some costs to corporate clients, chief executive Klaus Zumwinkel told Sueddeutsche Zeiutng in an interview to be published tomorrow.
‘If we should notably lose sales, then at least we can react on the cost side,’ Zumwinkel said, adding the company may for instance cut down on quantity discounts for corporate clients. But he said the logistics giant is currently more concerned about competition from electronic communication than from other companies. Zumwinkel also called upon other EU member states to liberalise their postal markets to create a level playing field within the region. ‘Deutsche Post could even live with being exposed to competition two or three years earlier than other postal companies’ as long as it is clear that other countries have plans to liberalise the logistics market, he said.