German model

The term German model is most often used in economics to describe post-World War II West Germany's means of using (according to University College London Professor Wendy Carlin) innovative industrial relations, vocational training, and closer relationships between the financial and industrial sectors to cultivate economic prosperity.

[1] The two key components of the German model is a national system for certifying industrial and artisan skills, as well as full union participation in the oversight of plant-based vocation training.

[3] These large-scale agreements have broad coverage and lead to considerable standardization in wages and employment conditions across the country.

The law set limits on the number of apprentices a firm could take on and introduced a monitoring system for the quality of training.

Considered an outgrowth of the non-confrontational culture of postwar Germany, finding a common denominator was often the main goal in such relationships.

At the end of vocational training, a highly regarded certification[citation needed] qualification is awarded that is valid for a range of over 400 occupations.

Rather than simply collecting savings and investments and issuing loans, most German banks have large interests in the commercial sector.

The failure of the German model to maintain standards of high performance has led experts to speculate about its demise, despite having been adopted successfully in other countries' corporations since its peak.

Others see the relative decline as an unavoidable consequence of integrating the much less advanced GDR economy and 17 million new citizens, which necessitated a transfer of over 1.3 trillion Euros from west to east as of 2009.

[15] Germany's Hartz Reforms and a growing low-wage sector are believed to have weakened the core setup of this German Model.