Sustainable Economic and Social Transformation

The third reform package, Hartz III, was officially implemented on 1 January 2004. Hartz III aimed to modernise the employment and support agencies, and to implement a more efficient service-oriented approach to supporting job seekers. The most prominent proposals were: A 30% cut in unemployment benefits would be allowed if a worker did not accept a suitable job offer; Access to unemployment insurance would be tightened. Under Hartz III, all unmarried Germans would have to look for work anywhere in the country. They would also be forced to accept a job with a salary 20% lower than before. Those who did not want to work would be penalised by increased social security contributions. The state also raised the retirement age from 65 to 67, reducing the pension fund. To stimulate job creation, the government has cut health insurance costs from the total salary paid by employers from 14.3% (in 2003) to 12.15% (in 2006) [193; pp.22-24].

Reforms aimed at modernizing and making the German labor market and employment more flexible were further reinforced by a package of reform projects in Agenda 2010 that Chancellor Gerhard Schröder introduced to the Federal Parliament on March 14, 2003 and was officially adopted on December 19, 2003. Agenda 2010 is a package of reform projects including: Labor market reform; Social security reform; and Tax reform. The reform proposals of the Hartz Commission became the basis for the labor market reform measures of Agenda 2010. Along with the integration of labor market modernization services and employment of the Hartz reforms, Agenda 2010 also emphasized forcing the unemployed to accept low-paid jobs, or to do jobs that are not in their fields of training. According to the proposal of Hartz IV reform (approved in 2003 and officially effective from January 1, 2005) and Agenda 2010, to help the unemployed reintegrate into the labor market, the government has proposed a reform to merge unemployment benefit policy (unemployment benefit I) and job search benefit into unemployment benefit policy II (Arbeitslosengeld II - ALG II). Accordingly, people aged 15 - 65, who are able to generate income, are able to work 3 hours/day or more, but are unemployed or have a job but their income is not enough to live on, will receive a subsidy from the state's tax source to ensure their living. Recipients of the subsidy are also advised and introduced to jobs through job introduction centers across the states. In addition, the state also encourages employers to retrain workers so that they have enough skills to meet job requirements. However, if the recipient does not find a job within 12 months, they will only receive 345 Euros per month. This regulation will increase the pressure on the long-term unemployed, pushing workers back into the job market. Therefore, after 2 years of implementation, 1.6 million people have found new jobs. Thus, the reforms have encouraged

encourage job search instead of providing generous benefits that ease the burden on social security.

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It can be seen that Chancellor Gerhard Schröder has issued a new version of the social market that he calls “Neue Mitte (new center). The philosophy of this strategy is that the government will act as “a trampoline to help the unemployed “bounce” back into the labor market instead of just being a mattress for them to rest comfortably” [39; p.80].

The Hartz and Agenda 2010 reforms have really played a role in economic growth and creating flexibility for the labor market and employment in the Federal Republic of Germany since 2005. The “employment miracle” [223; p.32] was really created in Germany from 2003 to 2005, bringing success in Germany's economic growth in the face of global and regional economic crises.

In terms of vocational training, Germany is widely known for its high-quality vocational education and training (VET) system, which was completed by the Vocational Training Act of 1969 and the Vocational Training Assistance Act of 1981. “The German VET system consists of three areas: the famous dual system of enterprise-based training combined with school-based education (apprenticeships); fully qualified vocational education programs (mainly for white people at intermediate level, mainly female-led occupations in sectors such as health, social work and communications, including nurses, kindergarten teachers, medical assistants) and training for popular occupations, the so-called transition system” [125; p.3]. The unification of the two German states, slow economic growth and high unemployment after the shock of unification forced Germany to make adjustments and reforms in vocational education for workers.

Among the German vocational education and training policies, the most famous is the dual vocational training system (parallel vocational training). The dual system is firmly established in the German education system. The main feature of the dual system is on the one hand cooperation between mainly small and medium-sized companies and publicly funded vocational schools. This cooperation is regulated by law. Students in the dual system usually spend part of each week at a vocational school and the other part at a company, or they can spend a longer period in each place before alternating. Dual training usually lasts two to three and a half years. After reunification, the dual vocational training system was extended to new states. Dual vocational training in Germany is an essential pillar for innovation and economic competitiveness and is central to social cohesion. In its implementation, the German dual vocational training system has been affected by demographic changes; The challenges of globalization require reforms in vocational education and training in Germany.

For the Eastern states, improving the labour market, employment and vocational training is part of the workforce development and building plan. Therefore, the Vocational Training Act was extended to the Eastern states from

19/7/1990. After the official reunification of Germany, responsibility for education was transferred to the private sector as in the West. At the same time, all vocational schools were supported by the Länder. This was therefore a prerequisite for the full takeover of the dual vocational training system in West Germany. These policies aimed at improving the quality of the labor force in East Germany and at reducing the flow of people migrating from East to West Germany.

Germany's reforms of the labor market, employment and vocational training are very typical policies in the process of adjusting the German development model after the decline in the first decade after reunification. For the first time, Germany has introduced such comprehensive reform policies to reduce unemployment and create more jobs.

3.1.3.3. Expanding social security policy

According to the International Labor Organization (ILO): “Social security is a protection that society provides for its members through a number of widely applied measures to cope with economic and social hardships and shocks that cause loss or serious reduction of income due to sickness, maternity, work-related injury, loss of working capacity or death. Providing medical care and benefits for families with children” [70; p.9]. During the period of division after World War II, West Germany formed a social market economy with the highest quality of social security in the world. Therefore, after 1990, along with the reconstruction of the East, the social security system of the new Germany also had reforms and adjustments to help the new states catch up in terms of living standards compared to the old states.

Since reunification, Germany has had to establish a unified pension system nationwide, while reforming and adjusting the pension system to provide the best support for retired seniors. There have been many reform laws and new pension policies enacted from 1990 to 1997. In 1992, the pension reform law officially came into effect, marking important adjustments to the pension and pension insurance system of the Federal Republic of Germany. The content of the 1992 reforms was that pension adjustments were no longer based on the growth of total wages, but on net wages in the previous year. In 1997, Germany passed a pension reform law, in which the state guaranteed that pensions were adjusted according to the pace of economic growth. At the same time, the state also implemented a very high social welfare policy, accounting for 1/3 of the total social product. The 1997 Pension Reform Act is the most significant of the pension reforms.

The crystallization of the reform laws that have been enacted is to raise the retirement age limit, extend the insurance period and lower the pension level. Under the regulations starting in 2001, the age limit of 60 (early retirement benefits for unemployed and

The retirement age (63 for women) and the age of 63 for long-term insurance will gradually increase to 65. Those who retire earlier will have to accept a reduction in their pension.

The changing age structure of the German population changes the contribution rate for pensioners. In the future, fewer contributors will have to support more pensioners. Therefore, pension levels need to be reduced and contribution rates stabilized. To continue to ensure a pension in old age, private and occupational pensions have been promoted more strongly since 2002: through subsidies (such as basic and child benefits) or tax subsidies. The German government also ensures that the health insurance system, unemployment insurance, and long-term care insurance always ensure a high social welfare state, economic development in parallel with social security.

Along with the social security reforms, the Federal Republic of Germany also transferred the social security system of West Germany to East Germany. Before unification, Germany had a comprehensive social security system in the West, but "a problem with the German social security system when East Germany merged into West Germany was that social insurance, health insurance, and social assistance almost did not exist in East Germany. Therefore, applying the social security system to East Germany was very complicated, time-consuming and resource-consuming" [6; p.2]. However, in order to achieve the goal of comprehensive unification, which could completely eliminate the borders of the previous division, the social security policies of the entire Federation in general and the policies for the East in particular needed to be adjusted and reformed appropriately. Only appropriate policies can truly bring about unification at the deepest levels of society. This also led to the need to adjust the legal system and the administrative management system.

From the fact that health is a high priority for every individual, public awareness and the social security system. After unification, the social security laws of the former West German states were also taken over by the new states. The single social insurance scheme was replaced by a structured system with separate pension, health, accident and unemployment insurance. Pensions were adjusted with wage adjustments in East Germany to the levels of the former federal states, which were increased. The Federal Government agreed to a temporary “start-up grant”, provided that state contributions and subsidies did not cover the increased costs and benefits of the pension insurance.

The same was true of unemployment insurance, which quickly became an important issue in social life, because the collapse of the East German economy led to rising unemployment. In order to avoid serious political consequences, the social consequences of this development had to be absorbed by the Federal Government. Unemployment benefits, short-time work subsidies and employment creation measures, long known in the former states, now applied in East Germany to shape the daily lives of many people.

With the social market economic model that has been practiced very successfully by the Germans

public. In which, the state always aims to bring the people the best conditions for care and development. The reforms of the pension and insurance regimes of the Federal Republic of Germany are to make the welfare regimes more suitable to the new historical conditions. At the same time, the Federal Government also advocates implementing good social security to create a foundation for faster and more solid economic and social development and East-West harmony.

3.1.3.4. Economic and social transformation towards sustainability

In 1987, the World Commission on Environment and Development (WCED) (Brundtland Commission) defined sustainable development as: “Each generation must solve its own tasks and not burden future generations, in which: “needs” (especially the needs of the world's poorest) are given high priority and attention is paid to the negative impacts that the state of technology and social organization have on the ability of the environment to meet current and future needs with the principle that “sustainable development is development that meets the needs of the present generation without jeopardizing the ability of future generations to meet their own needs” [108; p.24].

In Germany, the process of building a modern industrial state after World War II had serious consequences for the environment and people's lives. In a speech on April 28, 1961 in Bonn, politician Willy Brandt (who later became Chancellor of West Germany from 1969 to 1974) said that "the sky over the Ruhr must turn blue again" [291], from which the term "blue sky of the Ruhr" (blaue Himmel über der Ruhr) began to give rise to greater government attention to environmental issues and, more broadly, sustainable development.

After the country was reunified, along with the process of reconstruction and development of the two regions, the requirements for environmental issues, especially balanced, comprehensive and sustainable development, became more urgent. Germany has also achieved many successes in controlling environmental issues and ensuring the quality of life. The control of motor vehicle emissions, wastewater treatment, and environmental pollutants have been significantly reduced through the application of environmental protection technology. In the new states, too, large investments in environmental protection have improved the air quality around classrooms, and in rivers and lakes, the return of sensitive fish species is evidence of new life. However, these achievements have not changed the fact that less visible environmental impacts have been overlooked in other areas. Our current way of living, producing and consuming is still endangering the natural foundations of life for the present generation and certainly for future generations. The threat of climate change, the loss of semi-natural habitats and the growing red list of extinct animals and plants are clear signals [110; p.9].

As the 21st century begins, recognizing the challenges of climate change

In April 2002, the Federal Government officially launched a national strategy for sustainable development (Germany's Perspective on Our Sustainable Development Strategy - Perspektiven für Deutschland Unsere Strategie für eine nachhaltige Entwicklung). This first national sustainability strategy was presented by the Federal Government at the United Nations World Summit on Sustainable Development in Johannesburg in 2002 to call for the development of national sustainability strategies, which had been developed at the United Nations Conference on Environment and Development in Rio de Janeiro in 1992.

The 2002 German Sustainable Development Strategy stated the mission of sustainable development including: Commitment to future generations, quality of life, social cohesion and international responsibility. It includes specific targets such as:

Firstly, regarding the commitment to future generations, the development strategy stated that: The responsibility of today's generation for the life opportunities of future generations is not only on paper, but must also be implemented; not in words but in action. The principle of sustainable development is to balance the needs of the current generation with the lives of future generations. To fulfill the commitments on development conditions for future generations, the targets that are focused on are: Climate protection, renewable energy, sustainable land use, biodiversity, public debt control, economic preparedness, innovation and investment in education [110; pp.89 - 109].

Second, on quality of life , the Federal Government states: The term sustainability may sound cumbersome, but at its core it is important and simple: it is about maintaining a good quality of life for everyone, now and in the future, and improving it where possible. People should have the opportunity to take responsibility for their lives, learn and work, to be responsible for themselves and others and to live in a network of social relationships in a healthy and safe environment. People with capabilities and responsibilities. An intact environment is therefore indispensable for quality of life, but quality of life encompasses much more. It includes health, opportunities for personal development, decent work, adequate housing, sufficient income, social recognition as well as good schools, a liveable and safe city with diverse cultural offerings. These elements cannot be separated. Only the interaction of all elements can create a complete quality of life. To evaluate the quality of life, it is necessary to base on the evaluation of the following factors: economic prosperity, dynamism of the living environment, air quality, nutrition for people, health care and crime prevention and security protection [110; pp.109 - 120].

Third, in terms of creating social cohesion , Germany has been successful in building a welfare state since World War II. Therefore, when developing a sustainable development strategy, the Federal Government is always deeply aware that: Living in solidarity and

Social cohesion is a fundamental prerequisite for an economically and socially successful society. Only on this basis can we master the challenges ahead and proactively shape structural changes in the economy and the world of work. To prevent poverty and social exclusion as much as possible, to prevent the division of society into winners and losers, to involve all segments of the population in economic development and to enable them to participate in political and social life, these factors characterize the social sustainability dimension of Development [110; p.29] . The goal of creating social cohesion will be committed to the indicators of: employment, equal rights, development conditions for families and the integration of foreign citizens in Germany.

Fourth, on international responsibility , starting from the recognition that there are very serious problems in the world situation such as: poverty is still common in developing countries, the gap between these countries and developed industrial countries is growing; greenhouse gas emissions and soil erosion are endangering human life; the world's birth rate is decreasing but the population is still increasing. A series of other problems include storms and floods, droughts and desertification as a result of global climate change, deforestation, pollution and overfishing of the oceans, loss of plant and animal species, arable land and grasslands. That causes poverty in many countries, which often leads to migration - the source of conflict and violence. Faced with this reality, Germany's current and future development will be closely linked to the rest of the world. This concerns both global environmental protection and economic development, as Germany is an economy closely linked to global trade. Therefore, in formulating a sustainable development strategy, the German Government not only commits to domestic factors but also identifies its international responsibilities in the EU and global sustainable development strategies. The 2002 strategy demonstrated Germany's commitment to responsible actions on the following issues: Fighting poverty, promoting development; promoting the protection of resources and the environment worldwide; promoting the sustainable use of resources; improving economic development capital; taking advantage of the World Summits on environmental protection [110; pp.299 - 321].

Thus, the sustainability strategy of the German Federal Government is based on a comprehensive, integrated approach because only by taking into account the interactions between the three sustainability dimensions of ecological, economic and social issues can long-term sustainable solutions be achieved. The strategy aims at economic development, social balance and ecological development [260]. Sustainable development has thus become a central goal, guiding the actions and management of the country by the Federal Government. Several associations have been established to ensure the implementation of national sustainable development measures, in particular the Sustainable Development Council (Rat für Nachhaltige Entwikklung).

Since the first launch of the sustainable development strategy, in a 4-year cycle,

Germany will conduct surveys, assessments and adjustments to its sustainable development strategy, and issue sustainable development strategies in 2004, 2008, 2012 and 2016.

In its 2004 progress report and sustainable development strategy, the Federal Government continues to rely on four pillars for sustainable national development and responsible regional and global engagement. However, in the area of quality of life, the German government emphasizes healthy production, healthy eating and sustainable consumption policies. This also reorients German and EU agricultural policy. In terms of responsibility to future generations, the 2004 sustainability strategy emphasizes the focus on developing efficient and environmentally friendly transport and reducing emissions. Meanwhile, referring to international responsibility, Germany also actively contributes to prioritizing sustainable energy, sustainable trade, and disaster risk reduction... Based on the assessment of the current situation, situation, and some urgent issues of Germany and the world, Germany's sustainable development strategy in 2004 gives special priority to the following areas: adjusting the structure of new energy supply, especially renewable energy; proposing a new fuel strategy; reducing land use; developing the potential of the elderly in the economy and society. The energy issue is considered central to Germany's sustainable development strategy this time: " energy supply is a safe, affordable, consumer-friendly, environmentally friendly and environmentally friendly source of energy, which is of great importance for sustainable development" [104; p.164]. For the Federal Government, an important goal is to stimulate investment in sustainable energy supplies; to increase the efficiency of electricity production and consumption, combined with the expansion of ecologically and economically viable renewable energy. These priorities are due not only to rising oil prices and the growing world energy consumption, but also to the fact that in 2003 Europe had experienced an unprecedentedly hot and dry summer that severely affected the electricity supply in Germany and other European countries.

3.2. Economic development situation

3.2.1. Slow economic growth after unification

The result of the unification process brought new conditions for economic development. A prosperous social market with 60 million people quickly “absorbed” equal social and economic benefits, compared to 20 million people of a centralized economic regime. Chancellor Helmut Kohl and many European and world politicians expected a German economic boom. However, the development of the German economy after 1990 did not meet expectations.

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