The German proverb Misfortune seldom arrives alone captures completely the essence of present
German social economic difficulties. The decade of vibrant economic growth has become a memory
and is not part of the historical experience shared by the generation born in the 70s and 80s
getting in to work now. Most of these young people do not know the right balance between
efficiency and equity. Self-responsibility and self-decision-making on the one hand and
social security to prevent poverty on the other are both very important features in creating a
civil society as a third sector between the private and the public sectors. The definition of
this type of civil society and the avoidance of a liberal model through the Bismarckian
conservative social security system to maintain the status even in the case of an emergency
will be described in the the first part of the second chapter as a basis for liberty and the
increase of the national product. On the other hand in Ireland between 1988 and 2000 real GDP
has grown 132 per cent. It was not only the social pact model which resulted in magnificent
economic growth rates but the whole welfare system was improved to give more incentives to
establish more self-responsibility and to reduce status maintaining features (Baccaro and
Simoni 2004). The beginning and the framework of the Irish success in terms of efficiency and
equity will be discussed in the second part of the second chapter. The third chapter describes
in a detailed way the differences of social security financing and its impact on efficiency and
equity in both Germany and Ireland. The fourth chapter is divided into two parts. The first
part deals with the unlimited social service provision of health care disability and
occupational benefits in Germany and compares it to the Irish system. The fifth chapter deals
with as a consequence of the described problems in the fourth chapter poverty reduction and
efficiency increase to develop a civil society. Therefore the first part discusses the
effects of increased take home pay due to less social security contributions for both employer
and employee as was achieved due to social pacts in Ireland. The second part relates
efficiency and equity measured in terms of effectiveness to one another and explains that a
more efficient management of social security in Germany might be a solution to current
difficulties. The better relationship between efficiency and equity in Ireland has led to the
conviction that less social contribution revenue must be targetted more exactly. Finally it
will be explained in the conclusion that a partial retreat from the outdated conservative
system is not avoidable any more. Of course Ireland seems to be less equitable but on the
other hand it is efficient. Germany s system is neither equitable nor efficient.
