GERMANY Standards, Testing, Labelling, and Certification: Germany's regulations and bureaucratic procedures can prove a baffling maze, blunting the enthusiasm of U.S. exporters. While not "protectionist" in the classic sense, government regulation does offer a degree of protection to German suppliers. Safety standards, not normally discriminatory but sometimes zealously applied, and exemplified by the testing and licensing procedures of the Technischer Ueberwachungsverein e. V. (TUV, or technical inspection association), complicate access to the market for many U.S. products. Government Procurement Practices: Selling to German As a government entities is not always an easy process. broad statement, German government procurement is non-discriminatory and appears to comply with the General Agreement on Tariffs and Trade (GATT) Agreement on Government Procurement. That said, it is undeniably difficult to compete head to head with major German suppliers who have long-term ties to German government purchasing entities. Those areas which fall outside of GATT Agreement coverage, such as some military procurement, purchases by the transportation or environmental ministries, or procurement of services, are the most susceptible to these problems. Investment Barriers: The German investment climate is very open, but some of the concerns mentioned above, such as access to services markets and standards and procurement questions also apply to investment. 6. Export Subsidies Policies Germany views itself as an advocate of free trade, while simultaneously supporting inefficient industries. of particular interest are the subsidies provided to agriculture and to the German aerospace industry. Airbus subsidies are still a point of contention, particularly the exchange-rate guarantee scheme with which the German government enticed Daimler Benz to purchase Messerschmidt-Boelkow-Bloehm. As a general matter, the need to devote funding to projects in eastern Germany during the coming year may do far more than anything else to force reductions in subsidies provided in western Germany. 7. Protection of U.S. Intellectual Property Germany is a member of the World Intellectual Property Organization and party to the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, the Universal Copyright Convention, the Geneva Phonograms Convention, the Patent Cooperation Treaty, and the Brussels Satellite Convention. Intellectual property has been generally well protected in Germany. The German Patent Bureau, Verwertungsgesellschaft (which handles printed material), and GEMA (the German rough-equivalent to the American Society of Composers, Authors and Publishers) are the agencies responsible for intellectual property protection. U.S. citizens and firms are entitled to national treatment in Germany. GERMANY On July 1, 1990 a new German law to strengthen protection of intellectual property and to toughen penalties for product piracy was passed. The law covers trademarks, copyrights, design patents, patents, utility patents, semiconductors, and plant variety patents. Under this law, protection for sound recordings was extended from twenty-five to fifty years, thus bringing it into line with the policies of other EC member states, with the exception of Italy. There remain, however, some areas in which the United States seeks stronger German protection of intellectual property. One key area is copyright protection for computer software. While German law explicitly protects computer programs, judicial interpretations appear to have undermined the effective level of protection. Under several court decisions, only programs that demonstrate a level of originality beyond the skills of an ordinary programmer are protected. As a result, many business application programs are not eligible for protection under German law. 8. Worker Rights * a. Right of Association The constitution guarantees full freedom of association (Article 9). German workers also enjoy, independent of their associations, representation and participation in management decisions effecting them by means of statutory elected workers councils and reserved memberships on corporate boards ("codetermination"). b. Right to Organize and Bargain Collectively Industrial relations in Germany are based on autonomous collective bargaining between large industrial unions and corresponding employer groups. The resulting contracts are legally binding and can be extended under certain circumstances to cover entire regions or industries. Both the right to strike and the lock-out are legally protected. c. Prohibition of Forced of Compulsory Labor The Basic Law (Constitution) guarantees every German the right to choose his own occupation and prohibits forced labor (Article 12). d. Minimum Age for Employment of Children German legislation in general bars child labor. e. Acceptable Conditions of Work German social legislation is comprehensive and, in general, imposes strict occupational safety and health standards. The legislation and regulations can be supplemented by labor management contracts. The resulting German norms are widely considered to be among the very highest in the European Community. There is also a mandatory occupational accident and health insurance system for all employed persons. GERMANY f. Rights in Sectors with U.S. Investment The enforcement of German social legislation is strict, and applies to all firms and activities, including those in which U.S. capital is invested. Employers are required to contribute to the various mandatory social insurance programs. Disputes over worker rights can be referred to: labor courts (local, regional, and federal) in cases involving any aspect of employee/management relations; and to social courts (local, state, and federal), in cases where there is a disagreement on the application of social legislation. The following table contains data for 1989 which covers the former Federal Republic of Germany only. Comparable data for 1989 is not available for the former German Democratic Republic. (D) -Suppressed to avoid disclosing data of individual countries Source: U.S. Department of Commerce, Survey of Current Business * Section 8 is an abridged version of Section 6 of the Federal Republic of Germany country report included in the Department of State's Country Reports on Human Rights Practices for 1990, submitted to the Congress January 31, 1991. For a comprehensive discussion of worker rights, please refer to that report. GREECE Key Economic Indicators (Billions of Drachmas (Dr) unless otherwise noted) 1/ Interest rate on long term loans to industry. Sources: Bank of Greece, National Statistical Service of Greece, Ministry of National Economy, and Embassy estimates. 1. General Policy Framework GREECE In its first six months, the Mitsotakis government has moved to boost state revenues through new tax measures, and to establish a legal framework for modernization of the economy including the privatization of many state-controlled companies. It has also passed legislation to reduce the deficits of social insurance funds (some 9 percent of GDP), and initiated some public sector employment cuts. However, there has not yet been sufficient time for new policies to show results. Consumer prices are rising at a rate of 23 percent per year, forcing the government to keep the drachma overvalued to avoid a rise in "imported" inflation; the current account deficit may exceed US$3.0 billion by the end of 1990 as the trade gap grows; and the public sector deficit is stuck at over 20 percent of GDP. Budget deficits are financed primarily through the issuance of treasury bills, in which, by law, banks must invest 40 percent of their deposits. The state also issues securities of up to two-year terms at attractive rates of interest as well as ECU-denominated bonds. Greece has traditionally allocated credit through the Bank of Greece (BOG) by the application of specific reserve requirements (nine percent of deposits for loans to state-controlled companies, ten percent for loans to small and medium-sized enterprises). However, prodded by EC requirements, Greece has been moving towards a more market-oriented credit allocation system. With the exception of minimum interest rates for lending to small and medium-sized enterprises and for savings deposits, banks are now free to set their own rates. Tax collection is a major problem in Greece, and evasion is widespread. There is a large "parallel" economy estimated to be 30 to 50 percent the size of the official economy. Its existence helps to explain levels of imports and consumption that are inconsistent with the national income figures. The value-added tax introduced 1987 has helped to reduce tax evasion, but the problem remains epidemic. The current government is taking a tough stand against evasion and plans to significantly widen the tax base. In July 1990, the government introduced a new investment incentives law. The new law redefines the types of "productive investments" that qualify for incentives and the way in which incentives are given. The law puts greater emphasis on tax breaks and reduces the extent of grants and subsidization of loan interest. 2. Exchange Rate Policies The exchange rate of the drachma is managed by the Bank of Greece through the daily setting of the "fixing rate" in a meeting with banks operating in Greece. After the 1985 devaluation of the drachma, Greece announced that the real exchange rate would be kept stable, with relative unit labor costs used as the key indicator of competitiveness. The decline in real wages in 1986 and 1987 enabled the Central Bank to keep the drachma's depreciation against a basket of foreign currencies at an annual rate of under 10 percent. However, relaxation of the incomes policy in 1988 and 1989 led to a sharp rise in unit labor costs and to the abandonment of the unit labor cost criterion in setting exchange rates. In 1989, unit labor costs in manufacturing rose by 10.3 percent |