This appears in today's Financial Times:
Gerhard Schröder, German chancellor, has demanded more investment in the country from its business leaders as he seeks to turn round Germany's economic performance and boost his struggling political fortunes.
His comments reflected growing popular discontent over the trend by German companies to increase profits while cutting jobs at home. The failure of investment spending to accelerate is one factor that has been blamed for the sluggishness of Europe's largest economy.
I have posted many links to Daniel Drezner's comments on the outsourcing issue as they apply to the U.S. -- the very first is here. I don't see why the same arguments wouldn't apply to the German case as well, and there are those who still think that the EU ministers dropped the ball last week. This is from an FT editorial by Wolfgang Munchau (subscription required):
If European Union leaders had been serious about reviving the economy, they should have taken three decisions at their summit last week. By far the best single measure to raise the EU's potential growth rate would have been the adoption of the services directive to create a single and free market for services within the union.
Of course, as I noted last week, they did not. The explanation from Schröder, as it appears in the today's FT article:
Mr Schröder... joined France in criticising the proposed European Union services directive - which aims to boost cross-border trade in services - arguing it could lead to "social dumping" by low-cost companies in eastern Europe, which operate under lower standards of social protection.
Although Germany may not have the hardest line on this...
At last week's Brussels summit, EU diplomats said Germany was on Britain's side in arguing for more liberal reforms, while France, Sweden and Belgium led the campaign for a more diverse communiqué, also placing emphasis on Europe's social model and environment.
... to some, the sentiment revealed in the German chancellor's comments is not the path to progress.
On Sunday..., Jean-Claude Juncker, Luxembourg prime minister and the summit's host, said France needed to accept liberalisation in the services market.
He told the French newspaper Journal du Dimanche that the directive needed to be redrafted, but added: "To demonise, as some people are doing, any form of deregulation in the services area does not seem to me to be in the interest of the world of work."