Domestic bribes are legally no longer tax-deductible. Certain German multinationals are reputed to be active in bribery in developing countries and such expenditures are still legally tax exempt. A number of German companies are beginning to push the German government to end this tax exemption. Germany supported an OECD Ministerial decision in May to negotiate, by the end of 1997, a convention criminalizing the bribery of foreign public officials. The target date for the convention's entry into force is before the end of 1998.
High unemployment is the key economic problem in Germany.
Legislation designed to protect workers limits the ability of employers to lay off redundant workers and thereby discourages flexible hiring practices. As part of its 50-point plan to encourage growth, employment and investment, in 1996 the government weakened the protection of workers by raising the threshold of companies covered by the strictest protection regulations from the former level of five employees to more than ten employees. This change is estimated to have affected about ten percent of the gainfully employed, or roughly 3-4 million people. Traditionally union leaders have been able to come to agreement with management with relatively little work stoppage. Management is legally limited in its recourse to lockouts.