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Chancellor Helmut Kohl Celebrates the Success of the Social Market Economy (October 25, 1989)

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– And with this in mind, it is particularly encouraging for the future that business profits and investments are at a record high. For they form the basis for tomorrow’s jobs and for a continued upward trend in employment.

– The competitive position of our businesses on the world market has improved substantially. The German economy today exports more than any other country in the world.

All of this underscores that we have a successful concept. Therefore, our answer to the challenges of the future can only be: to continue developing the regulatory framework of the Social Market Economy and, above all, to strengthen the awareness of the need for individual responsibility.

The federal government is pursuing this policy in order to prepare our economy for the challenges of the future. To this end, and in the interest of the people, it is willing to accept the sometimes vigorous resistance that comes from large interest groups.

Our comprehensive package of measures includes health-care reform, pension reform, and postal reform, as well as a three-step tax reform.

With regard to health-care reform, there are certainly some points of contention. What is important, however, is that we were able to stop cost increases for the first time in years, and that an awareness of expenditures is starting to develop again.

Many have taken only casual note of the structural reform of the postal system. But this long overdue deregulation represents the right path for the future.

With regard to pension reform, foreseeable demographic trends forced us to make some difficult decisions. Thus, I’m all the more pleased that we were able to reach a compromise between the major democratic parties on this central socio-political issue.

On January 1 of the coming year, the third stage of the tax reform will take effect. The tax cuts represent a very important decision, not least with respect to making the Federal Republic of Germany a more attractive place for business and industry. We need not shy away from a comparison with reforms in other countries. I certainly would have liked to include corporate taxes in the package, but it wasn’t politically feasible. Therefore we will make a decision about this reform shortly after the Bundestag elections. Our businesses must be guaranteed equal opportunity in the European Community, especially in light of the introduction of the Single European Market in 1992.

This program of reforms – the most comprehensive one ever passed in the Federal Republic within such a tight time frame – has without a doubt forced our citizens to give up entitlements that they had grown fond of. We are concerned, however, not only with today, but also with the continued prosperity of the Federal Republic and its future as a place for business and industry. It is by no means the case that everything will automatically remain as good as it is now.

It must also be clear: the government does not carry sole responsibility for safeguarding the future. Industry and society are equally responsible. We are, and remain, mutually dependent upon one another.

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