INTERNATIONAL

AMERICAN TRAINS JUMP ON THE HIGH SPEED BANDWAGON

–Domonique GARRAUD, France

It took a long time to win the Americans over to the idea of high –speed trains, but the process is now under way with the Acela Express, America’s first high – speed train, coming into service in December. It will link three large towns in the North – East, Washington, New York and Boston, non- – stop. Based on Alstom’s French technologies for the engine units and Bombardier’s Canadian ones for the adoption of the titling train system making it possible to take bends at higher speeds in a winding, often timeworn railway – line network, Acela Express can travel at a top speed of 240 kilometers an hour (150 mph). The new link , run by the para – public Amtrak group , will save half an hour in travel time between Washington and New York (400 kms (250 miles) in 2 hours 30 minutes) and up to one and a half hours between New York and Boston.

The Acela represents an investment of 800 million dollars (80% of which comes from private financing) for an order comprising 20 trains from the Alstom – Bombardier consortium in addition to a billion dollars for infrastructure work from federal funds. The Acela , which is made up of four coaches pulled by two Alstom engine units , will carry 304 passengers and offer competitive fares compared with air shuttles. When the system gets under way, the Acela Express will provide 19 daily links between New York and Washington and 10 between Boston and New York. Amtrak is counting on speed and greater comfort of the Acela, as well as on its arrival in the town centers, to draw up to 50% of the customers using the air links between New York and Boston. The American Transport Company thinks it will be able to attract two million extra passengers a year on the new line, providing a surplus of 200 million dollars in receipts. The introduction of the Acela represents a real revolution in the United States where, since the conquest of the West, railway had largely given way to roads and planes. The overcrowding of airports in addition to problems of saturation of air and road traffic, have led the United States to ponder on the deplorable state of their railway network and to consider creating a new balance in its transport system in favor of railways whose timeworn infrastructures absolutely have to be modernized. American Congress is also to shortly consider allocating 10 billion dollars in federal loans to finance high – speed train project in partnership with the states concerned. For its part, Amtrak has gone into partnership with 28 federal states on high – speed trains, notable in California, the Mid – West and the region of the Great Lakes. Two earlier projects, also based on Alstom’s French technology, worth a total of five billion dollars, had been scrapped owing to the refusal by the states of Texas (in 1994) and Florida (in 1999) to finance the infrastructures.

Amtrak is counting on the success of the Acela to win the United States over, for good, to the advantages of high – speed railways both for carrying passengers and for transporting freight. Federal efforts to improve railway infrastructures will, initially, only allow Acela – type trains, not exceeding speeds of 240 km/hour (150 mph) to travel, compared with 300 km/h (1875 mph) for TGV high – speed trains in service in France. New technological progress has been achieved, in particular with Alstom’s high – speed automotive unit (AGV) which will attain a commercial speed of 350 km/h (218.75 mph) with 20% more passengers. European research is also working on tilting systems in order to considerably cut the costs of the infrastructures needed to adapt the whole of the European railway network, which is likely to be of interest to the United States.

The liberal professions in Germany

Annegret Sorge, Germany

The liberal professions, "die Freien Berufe", a term embracing a group of professional services, represent an important sector of German small and medium sized firms. They are characterized by a great variety of occupations in the services sector. In macroeconomic terms, the significance of this sector will continue to grow, due to the ‘tertiarization’ of the economy, i.e. the world-wide growth in services at the expense of the traditional goods-producing manufacturing sectors. Liberal professions: what does this include?

The sector of liberal professions embraces people who work on a freelance basis in one of the occupations mentioned below; however, the definition does not include people running their own commercial operation, e.g. retailers: # freelance healing professions, doctors, dentists, non-medical practitioners, speech therapists; # Freelance legal, business and tax consultancy professions, e.g. lawyers, tax advisers, business consultants, notaries; # Freelance technical and scientific occupations, e.g architects, freelance informatics specialists, engineers, sworn experts; # Freelance cultural professions e.g. artists, writers, journalists, teachers, translators. At almost 37%, the healing professions account for the largest group of freelance professionals, followed by the legal, business and tax consulting professions with approximate 27%, the freelance cultural professions with approximate 19% and the freelance technical and scientific professions with approximate 17%.
The number of freelance professionals has risen continuously since 1978. In 1989, there were roughly 415,000 freelance professionals in Germany. Following German unification, their number rose to 514,000 in 1992. The shift in society and technology to more and more new, additional services is continually creating new liberal professions, particularly in the computer business. In 1999, a one in six self-employed person was a member of the liberal professions.

What is a liberal profession?

The Federal Association of liberal professions provides the following definition of the "liberal profession". "In view of their special professional skills, members of the liberal professions deliver intellectual services personally, on their own responsibility and independently in the interest of their client and of the general public. Their work is generally subject to specific professional rules, either on the basis of government legislation or in the line with stipulations laid down independently by the body representing the profession, which safeguard and develop the professional approach, the quality and the relationship of trust with the client".

What distinguishes a liberal profession?

A factor common to most of the liberal professions is that they provide important services by supplying the population and business with advice, assistance, support and representation. They do so on their own responsibility, objectively and without being subject to instructions from third parties. The members of the liberal professions have a special relationship of trust with their patients or clients. The liberal professions often hold a place between the state and commerce and industry. The notary, the publicly appointed surveyor or the publicly appointed experts, for example, are occupations which involve work of an official nature or which are an element of government administration. A pharmacist, by contrast, is on the borderline of commercial activity, and is subject to trade tax; despite this, the occupation of pharmacist is counted as one of the liberal professions in the health sector. Income structure of the liberal professions: The latest data currently available from the Federal Statistical office on wages and incomes in the liberal professions date from 1995. It can be seen that the income structure of the members of the liberal professions varies widely. Approximate one quarter of members of the liberal professions have a very low income, up to less than DM 20,000 a year, another quarter earns taxable income of between DM 60,000 and 200,000 and only around 2,5% earn more than DM 500,000 a year. Promotion of the liberal professions by the Federal Government: One core element of the German government’s policy on small and medium sized firms is to make it easier for members of the liberal professions to start up their own business. Despite in the increase in the number of freelance professionals in the recent years, there is still hope for substantial scope for growth here. The Federal Government provides various forms of financial assistance to people setting up businesses, for example loans from Deutsche Ausgliechsbank and low cost refinancing of private venture capital by the Kreditanstalt fur Wiederaufbau. In 1999, some 27,000 new businesses were started up in the liberal professions alone.

The Federal government and the Lander also offer a large number of support programs for SMEs, which are oriented to developing skills. Research, development and innovation on environmental protection e.g. the "market incentive" program to encourage renewable energy", which aims to raise the proportion of renewable energy used.

So that better use can be made of the market opportunities of German service providers on the international markets, the Federal government promotes the initiation of cooperation between technical service providers and foreign partners. For example, the Federal economics ministry has set up a program called "Engineers in Dialogue". This scheme has already been able to help numerous freelance architects, for example, to obtain orders on foreign markets, e.g. Britain, Poland, China and Morocco.
The Federal government’s tax reform is an important contribution towards making Germany more attractive for business. For the liberal professions, the following rules in particular apply: Firms in the liberal professions are often structured as sole proprietorships or non-corporate companies. They are therefore liable not only for income tax, but also for corporation tax.. The peak rate of incme tax has been cut. In 1998, it stood at 53%. As a first step, it has been lowered to 51%, and by 2005 it should be down to 42%. Corporation tax will, from 2001, be only 25% for both retained and distributed profits. Firms in the liberal professions will have to expect their profits to be taxed about 30% in future. Many freelancers have built up their pension provision in the company. The tax free allowance for the sale and closure of non-incorporated firms has therefore been raised from DM60,000 to DM 100,000. Also, the half-average tax rate has been reintroduced for sales of companies. However, this concession can only be used once in a lifetime. Hans Eichel, the Federal Finance Minister, had this to say about the tax reform: "'it reduces the burden on all those in urgent need of relief. It makes Germany internationally attractive for business, and boosts economic growth."

However, this tax reform does not go far enough for the Federal Association of Liberal Professions. IN its resolution dated 28.6.2000, it call for "the progressive rise in the income tax curve to be substantially flattened out and the peak tax rate to be limited to 40% at the most". It also calls for a substantial raise in the general tax-free allowance above the envisaged figure of DM 100,000 when practices, surgeries and chambers are sold. The justification given for this demand is that the revenue from the sale of their source of income is the main source of pension provision for the members of the liberal professions.

If the competitiveness of the liberal professions within Germany is to be safeguarded, there must be a flexible yet uniform set of occupational rules. For example, the Federal government is aiming to harmonize the rules on architects and engineers via a Joint Federal/Lander initiative. This is also intended to further liberalize the possibilities for people to work in corporations, in order to encourage cooperation between different professions.

The opportunities offered by e-commerce are not yet being fully used by engineers and planners, particularly in the business to business sector. According to a study, 1999, conducted on behalf of the Federal ministry of Economics and Technology, smaller companies with up to 50 employees in particular see no benefit in e-commerce. The Economics ministry has therefore started talking to the Federal Association of Liberal Professions about how to promote a center of excellence for e-commerce.