Workers assemble a vehicle at Ludwigsvelde Daimler-Mercedes plant.
At 3 p.m. on Wednesday, Andreas Schieve puts one last fitting on a Mercedes truck, hangs up his tools on the assembly line and attends a brief meeting to hand the line over to the night-shift workers. Then he walks out of the factory gates and into town, ready for another four-day weekend.
Like most of the workers at the Ludwigsfelde Daimler-Mercedes plant, the 50-year-old man would rather not be forced to work three-day weeks about a third of the time.
"It's harder to make the rent payments and my wife and I don't have extra money to save for holidays and new appliances," he said while having a Chinese dinner at a shopping mall outside the plant, where he's worked more or less continuously since 1976. His wife works as a cleaner.
"But I do realize that it's better than being laid off. It's hard, but it's not as if I'm in danger. We're not living in Greece here."
While the rest of Europe is just beginning to crawl out of crisis and into the first tentative rays of growth and recovery, Germany is positively booming. Export sales are up dramatically, spurred especially by Chinese sales; consumer spending has returned sharply; banks and housing markets are unscathed - and, most significantly, while the rest of the continent and the United States experienced harsh job losses, Germany has actually seen unemployment fall this year to 7 per cent, below Spain's boom-time level
A big part of Germany's resilience can be found in factory towns like these and in the weekly pay statements of workers like Andreas Schieve.
In most other European countries, Mr. Schieve would have been laid off in late 2008, when the credit-driven economic downturn hit Europe hard and orders for this plant's commercial trucks dried up. Orders fell from 60,000 trucks a year to around 30,000, and the work force should have been slashed to match - more than 1,000 layoffs.
But Germany did something different. While its neighbouring countries spent hundreds of billions bailing out banks, financing infrastructure and stimulating the economy, Chancellor Angela Merkel's conservative-liberal coalition government also took a very large, unique gamble by spending huge sums of money bailing out its work force.
In a system known as kurzarbeit, or "short-time work," the German government pays up to two-thirds of the salary of employees who would otherwise be laid off, as long as they remain employed. The employer is expected to cover any hours actually worked and to keep up their pension and benefit payments.
Starting in 2009, this formerly marginal scheme became the core of Germany's recovery plan, and the number of Germans on kurzarbeit rose from tens of thousands to 1.5 million, costing the German government billions.
The workers say they find their tenuous employment inconvenient and complain that the money is neither as good nor as predictable. Some of Mr. Schieve's friends flew to Tuscany on long-weekend package vacations, only to be disciplined when the Friday shift was suddenly reactivated and they were nowhere to be found. But compared to other Europeans, they are extremely fortunate.
For Germany, it has been a huge gamble, for if the economic downturn lasts beyond 2010, the cost of having millions of private-sector employees effectively on the state payroll will become unaffordable and counterproductive, triggering an even worse crisis.
Yet it seems to have worked, to an amazing degree: Despite suffering an economic contraction of 5 per cent last year - during which unemployment doubled in the United States to 10.1 per cent and approached 20 per cent in Spain and Greece - Germany actually saw its unemployment rate fall to 7 per cent, its lowest point in 17 years.
The system has driven up government debt sharply and means the German recovery won't have the commensurate boost in consumer spending other countries will see. But German officials believe kurzarbeit has spared their country a far larger catastrophe and has allowed it to experience a boom in the midst of Europe's slump.
The logic works like this: If Mr. Schieve had been laid off, he and his wife would have been forced out of their three-bedroom rented house. The landlord, facing the depressed housing market of eastern Germany, would likely have defaulted on the mortgage. Meanwhile, the shops and services of Ludwigsfelde, a one-industry town, would have failed due to the layoffs and created their own defaults. Mr. Schieve and his fellow laid-off workers would have gone on welfare, costing the state large sums of money without generating any tax revenue.
The mortgage defaults generated by Mr. Schieve and a million people like him would have driven several banks into insolvency, forcing much more expensive state bailouts. And their mounting social-assistance bill and vanishing income-tax payments would have created a chronic government deficit.
This domino collapse is precisely what has happened in many other European countries, including Greece, Ireland, and Spain. It's also afflicted the United States. Germany's economy is hardly perfect, with record levels of debt, but it appears to have avoided the self-destructive vortex of unemployment, housing and banking shocks that have decimated other economies.
Ministers in France and Britain said in interviews earlier this year that they were watching the German experiment nervously - and with some skepticism - to see if it would work; a failure of economic recovery during 2010 would doom it. Both countries had used short-time work programs in limited situations in the past 20 years, but had rejected the idea of a work force bailout as unaffordable.
Ms. Merkel called the program crucial to the German recovery, which she termed a "minor miracle." Some economists are more skeptical, pointing out that Germany, as the world's second-largest exporter, was bound to have a stronger recovery when global trade revived; southern European countries are dependent on German exports and, therefore, on debt.
Inside the offices of the Daimler factory, though, another benefit of the kurzarbeit program becomes apparent: It prevented the loss of industrial knowledge that has hurt countries like Britain.
"For automobile producers, it's very important that you have experienced and highly trained people - especially for Mercedes. If you lay them off, you have lost them forever," said Bertram Caspari, head of the factory's personnel department, who was told in 2008 that production would drop by half and that at least a third of the work force would no longer be necessary.
"We did not fire a single person. Not one."
This, he admits, was a "lucky coincidence" - the work force did dwindle by 500, but they had just enough workers on two-year contracts and due for retirement that this could be done by attrition; another 200 were transferred to a Bavarian plant that is booming, because it produces Mercedes cars for the Chinese market (Ludwigsfelde's trucks are mainly sold in Europe).
Rather than simply putting half the work force on six-month kurzarbeit leaves (as some businesses have done), Daimler-Mercedes decided to go with rotating three-day weeks, in order to keep employees fresh and knowledgeable: Every day, there are 250 workers missing from the factory, but it is a different 250 each day.
"If you are six months at home doing nothing, it changes your personality," Mr. Caspari said. "You not only lose the ability to build this car, but even to get up in the morning and make it to work. There are good reasons to keep people active in the work system. You can bridge the time and keep hope."
This maintenance of hope seems to have been the secret of recovery in the European countries that have fared best in the wake of the crash.
There is a notable division between countries that gave people work security by having lifetime-job guarantees and rigid labour markets - like Spain and France - and those that did so with more expensive, but more flexible, government safety-net programs, like Germany and Scandinavia.
In the former countries, people excluded from full-time work contracts have suffered badly in the downturn, excluded from any form of employment, and an entire generation is finishing school who appear to be excluded from the work force entirely, or shifted into the part-time and informal labour markets for a decade.
But the countries that have guaranteed easy hiring and firing - and government support when the market falls apart - have experienced the least distress.
The Scandinavian countries have managed the crisis using a system known as "flexicurity," in which companies can lay off employees easily, but the state provides unemployment insurance equivalent to full-time salaries so that nobody loses their houses or livelihoods. That system was based on the assumption that work would be easy to find, but it has prevented a catastrophe in the downturn (though it has led to mounting debt).
In Britain, Prime Minister David Cameron is shifting the country's welfare and unemployment insurance system to one that allows you to keep receiving benefits, at a lower level, as you move from full unemployment to low-wage or part-time work. Drawn from places like Germany and Denmark, it's meant to turn the safety net into a work-support system rather than a poverty-maintenance system.
It shows what Europeans have learned in their struggle with economic collapse: To keep a recession from becoming a catastrophe, the solution is not just in the bank headquarters but on the office floor and the kitchen table.
Doug Saunders