- The Washington Times - Thursday, January 31, 2002

German Chancellor Gerhard Schroeder was to meet with President Bush and congressional leaders today, clearly hoping his performance as a statesman will enhance his sagging performance as a candidate.

The German leader skillfully held his center-left coalition government together during last fall's intense debate over whether to support the U.S.-led military campaign against terrorism in Afghanistan.

But having survived the war storm unscathed, the German chancellor faces an unexpectedly strong conservative challenge in federal elections in September, with his popularity dented by an anemic economy and a series of governmental missteps in recent days.

"It certainly doesn't hurt Schroeder back home to be seen talking to the American president about Afghanistan or the Balkans, but the real action right now is the domestic front. For Germany right now, it's the economy, dummkopf," said Clay Clemens, a specialist in German politics at the College of William and Mary.

German government officials say Mr. Bush and Mr. Schroeder will focus heavily on the Afghan campaign and the global war on terrorism. Germany, which has greatly expanded its military presence abroad under Mr. Schroeder, is under consideration to take over the Afghan security force from Britain in March.

Other issues on the table include the situation in the Balkans; Russia and the proposed enlargement of NATO later this year; tensions between India and Pakistan; and Argentina, which the German chancellor is expected to visit next month.

Mr. Schroeder will also be the first European leader to meet with Mr. Bush since the international outcry over the U.S. treatment of al Qaeda and Taliban prisoners from the Afghan campaign in Cuba.

European press accounts have been highly critical of the U.S. stance, and German Foreign Minister Joschka Fischer said he believed the captives should be considered formal prisoners of war. But Mr. Clemens said the issue has not loomed large in the German domestic debate.

But Mr. Schroeder, who formed a close link with former President Bill Clinton as a center-left "Third Way" politician, has plenty of troubles to deal with closer to home.

Bavarian Premier Edmund Stoiber, selected earlier this month as the center-right's candidate for the September elections, has been hammering the 57-year-old chancellor for Germany's slow economic growth and rising jobless rate.

Bavaria's strong growth and low joblessness are in stark contrast to the federal government record, and Mr. Schroeder has found himself on the defensive.

Two polls taken shortly after Mr. Stoiber was selected Jan. 12 put the conservative coalition two percentage points ahead of the government, the first time in more than 18 months that Mr. Schroeder trailed.

The government yesterday revised downward its growth forecast for the year from 1.25 percent to 0.75 percent, and unemployment could hit the politically sensitive 4 million mark this year.

In a humiliating blow, Mr. Schroeder's government yesterday was publicly scolded by the European Union for ballooning budget deficits that could breach the union's maximum borrowing targets. The warning the first of its kind issued by the EU executive commission was even more painful because Germany had insisted on the targets back in the late 1990s as a means of keeping other EU governments in line.

The government took another hit this week over the botched handling of an effort to ban a rising neo-Nazi party. Germany's top court suspended hearings on the ban after it emerged that a key witness had been an informer for the internal security service.

The government forecasts an economic recovery later this year, and many still rate Mr. Schroeder, an energetic campaigner, as the favorite this fall.

But the recent bad news has clearly thrown the usually media-savvy chancellor off balance.

Mr. Schroeder has sparked a lively international row this week by threatening to sue German newspapers that have hinted he dyes his dark, wavy hair.

"Anyone who insinuates that I dye my hair insinuates that I always lie," the chancellor contended.

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