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by Isabelle Le Pag
, Agence France-Presse
FRANKFURT: A massive tax fraud scandal has highlighted a deepening
gulf between the general public and Germany’s economic elite,
which was already under scrutiny after a series of high profile
corruption scandals.
The fall of Klaus Zumwinkel, the
former head of Deutsche Post suspected of major tax fraud, has
triggered a wave of criticism of German bosses.
The affair, centered on tax
evasion via Liechtenstein funds, has had “devastating
consequences” for “acceptance of our economic system,”
acknowledged Juergen Thumann, head of the German industrialists
federation.
Front page stories and editorials
agree the Zumwinkel affair has ruined the reputation of business
leaders who are now accused of holding themselves above the law and
shirking their responsibility to the rest of society.
Public frustration has grown as
studies show social inequality increasing.
The DIW institute said Tuesday
that Germany’s middle class was shrinking, with the poor becoming
not only poorer but also greater in number, leading the group to
conclude that the “dominant” social trend was downwards.
In another recent poll, German
advisory group Lachner Aden Beyer & Company found that social
rank was a determinant factor in access to top positions.
The “caste mentality of
economic elites” resulted in a massive waste of human resources,
the group said.
“Those who belong to the elite
should certainly hold power but also remain conscious of their
responsibilities,” group co-founder Klaus Aden added.
Revelations of abuses have
multiplied in the past two years.
High-profile corruption scandals
at car giant Volkswagen and engineering group Siemens have seen
figures like VW personnel director Peter Hartz and Siemens
supervisory board president Heinrich von Pierer leave in disgrace.
In addition, a recent combination
of strong corporate results and large-scale lay-offs have provided
further ammunition for those who say that enough is enough.
To add to the sense of
unfairness, reports of hefty pay increases for several German bosses
have sat badly when companies call for wage moderation to help them
remain competitive.
“I have noticed public skepticism
with respect to the German economic system,” conservative
Chancellor Angela Merkel remarked recently.
The salary of Daimler chairman
Dieter Zetsche jumped 68 percent in 2007, while the management board
of luxury sports car maker Porsche shared 113 million euros, of
which boss Wendelin Wiedeking is believed to have taken more than 50
million, according to press reports.
Germany is well aware of the
effects of globalization, which has opened up markets but also
forced companies to compete with overseas rivals that operate by
different rules to their own.
At the same time, the concept of
shareholder value, which gives investors priority over staff and
handsome bonuses for managers in the form of stock options, has
undone the sense of worker-company solidarity.
Under painful reforms introduced
by the Social Democratic government of Gerhard Schroeder in the
1990s, salaried workers feel that they have lost out as the economy
has recovered, with all the gains going to the fat cats on top.
That sense of grievance underlies
a new militancy on the part of the trade unions who have geared up
for what is proving to be a tough round of wage talks with private
and public employers.
As the same time, social tensions
are being felt, warned Michael Hartmann, a sociology professor in
the western city of Darmstadt.
He said he feared an “increase
in criminality owing to the combined effect of frustration and
social distress.”
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