Veronika Grimm, an economist and member of the supervisory board of Siemens Energy, argued that Germany should loosen its protection against dismissal in the style of Denmark. “A general loosening of dismissal protection-modelled on the Danish Flexicurity system-would likely be very sensible” she told the Saturday editions of the Funke‑Mediengruppe newspapers, adding that the reform must be carried out as a comprehensive package.
Grimm cited Denmark as a model, explaining that the country balances greater employer freedom with strong social safeguards for the unemployed and a highly active labour‑market policy that includes intensive placement and training. “In Denmark the larger freedom for companies is offset by relatively strong social security when it comes to unemployment and by very active labour‑market policy with intensive placement and training” she said.
She cautioned that applying a loosening only to Germany would mainly increase uncertainty and the fear of downgrading wages, while the expected benefits-such as more hiring and greater dynamism in the labour market-might not materialise. “Therefore such a step would only be socially and economically defensible if, at the same time, the security in transition phases is improved, qualification is consistently expanded, and placement processes become significantly more efficient” Grimm stressed. She said these measures would be a very positive development that could spark innovation.
Grimm rejected the proposal to loosen dismissal protection only for top earners, a suggestion made by economist Moritz Schularick. “It may appear socially balanced at first glance, but upon closer inspection it is systematically questionable” she said. “Dismissal protection is a legal safeguard, not a redistribution tool; it should reflect the structure of the employment relationship, not the level of income”. She also pointed out that income is not a reliable indicator of actual vulnerability, noting that older or highly specialised workers may still face significant job‑loss risks despite high pay.
In her view, the proposal represents a political compromise aimed at making the loosening of dismissal protection more socially palatable.
Both the Greens and the Left rejected the President of the Kiel Institute for World Economics’ suggestion. Janine Wissler, vice‑chair of the Left parliamentary group, told the Funke newspapers, “This would be nothing more than the beginning of a gradual erosion of core employee rights that employers have long demanded”. She emphasized that workers, even highly qualified ones, need predictability and security.
Andreas Audretsch, vice‑chair of the Green parliamentary group, particularly dismissed Schularick’s idea to loosen dismissal protection for public‑sector employees. “The economic location will not improve if dismissal protection is eroded for teachers, social workers, bus drivers, and the like” he said in the Saturday editions of the Funke‑Mediengruppe. “More important are genuine reforms that lower payroll costs; everyone would benefit from that”.
