Germany : [special features: Reforming the federal fiscal system, policies to promote growth and employment]. 1997-1998.

Special Features in this issue: Reforming the Federal Fiscal System and Policies to Promote Growth and Employment. Germany has been passing through a period of extraordinary change, arising from reunification, the transformation of central and eastern Europe, the rapidly evolving world economy, and completion of the European single market, and now the advent of a common currency. Within this context, important advances have been made in improving the framework conditions for the labor market, the markets for goods and services, and financial markets, including corporate governance. The role for policy continues to be to underpin these advances, both through institutional change and through appropriate macroeconomic policy. However, the tax system remeins in need of reform, legislative and regulatory processes remain cumbersome and inefficient inter-governmental relations within the federal system act to impede economic development. The catch-up process in eastern Germany is proving painful and slow. Sustained employment-creating growth will require further action to fill the gaps in the reform program, giving scope for a reallocation of resources to a modern service sector.