Abolish public holidays? Experts argue about the impact on the economy!

Abolish public holidays? Experts argue about the impact on the economy!

The discussion about abolishing a public holiday in Germany is becoming increasingly loud. Michael Hüther, director of the German Economic Institute, recently called for reducing the number of public holidays in order to increase the country's economic performance in the short term. According to calculations by his institute, an additional working day could increase the gross domestic product (GDP) by up to 8.6 billion euros. This corresponds to a proposal that can also be understood as a reaction to a request from the Bavarian Business Association to delete a church holiday. Hüther refers to the abolition of the day of repentance and prayer as a public holiday in 1995, which was followed by similar economic arguments.

However, the idea does not only have supporters. Marcel Fratzscher, head of the German Institute for Economic Research, firmly rejects the proposal. He argues that the challenges of labor shortages cannot be solved by canceling public holidays. Rather, he sees the solution in removing hurdles for women, refugees and immigrants in order to relieve the burden on the labor market.

Demands from politics

There is also resistance in the political landscape to the abolition of a public holiday. Representatives of the SPD and the Left speak out firmly against Hüther's proposal. Armand Zorn, deputy parliamentary group leader of the SPD, emphasizes that public holidays help employees recover and promote their performance. Jörg Cezanne from the Left even describes the proposal as outdated and not solution-oriented. Leif-Erik Holm from the AfD parliamentary group also says that he would be happy if no additional holidays were introduced.

In addition to the economic debate, the cancellation of a public holiday is also being discussed in the context of financing issues for the German budget. In order to cover the new billions in debt in the budget, other economic experts such as Monika Schnitzer and Clemens Fuest have also made corresponding suggestions. Valerie Haller from the ZDF finance team estimates that canceling a public holiday could generate annual revenue of up to 8.6 billion euros. Guntram Wolff even assumes around 11 billion euros, which corresponds to around 0.25% of GDP.

Effects of deletion

However, calculating the economic impact of a holiday is complex. These depend heavily on the capacity utilization of the company as well as on industry-specific and seasonal factors. Germany has a high level of productivity in the international rankings and is the third largest economy in the world. But despite this level of performance, employees in Germany only have around 30 days of vacation per year on average and are therefore in the middle of the European comparison.

On the other hand, there is concern that canceling a public holiday will have a negative impact on employees. The loss of a day of relaxation could not only reduce the quality of life of employees, but also lead to loss of sales in industries such as tourism and catering. The question here is whether an additional working day can actually significantly increase GDP and tax revenues or whether the proposed measures bring more disadvantages than advantages.

The discussion remains tense and shows the different perspectives that exist on this topic. While some emphasize the economic benefits, others emphasize the social responsibility towards employees and the need for a balanced work environment.

For more information see TIME and ZDF.