- The Washington Times - Saturday, September 10, 2005

A frustrated Chancellor Gerhard Schroeder’s daring move to press for a test of troubled political waters to gain a clear mandate for his draconian economic recovery program seems to have backfired. No matter how far he may be ahead in personal popularity polls, the chancellor candidate of the conservative Christian Democratic Union, Angela Merkel, remains well ahead in electoral polls.

Forcing an early election based on a questionable no-confidence vote did not help popularize Mr. Schroeder’s bold attempt to weave capitalistic strands into a strained social net to invigorate a flagging economy.

Facing massive, 12 percent unemployment, economic underperformance, continued layoffs, ineffective cost-cutting reforms and mounting national debt, Mr. Schroeder’s drastic crisis management is not appreciated by his party’s left-wingers. They have deserted him for the new Left Party, causing Mr. Schroeder’s Social Democratic Party to plummet to a dismal 27 percent in early August polls.

However, a sudden rise in investor-confidence-boosting orders for German industrial exports and a jump in a prominent market confidence index from 37 to 50 percent could still alter the political landscape. Asserting, “We are coming out of the economic valley of misery,” Schroeder Economics Minister Wolfgang Clements claims Germany’s ailing economy is at long last on the right track.

The German voter’s mercurial mood is hard to interpret. After all, Mr. Schroeder’s bold election maneuver was designed to elicit a clear Yes or No from a grumbling constituency.

Stirred only by the new populist anti-globalist, anti-immigrant and anti-Turkey Left Party urging immediate withdrawal of German troops from Afghanistan, this oddly lackluster election campaign seems incapable of clear-cut answers.

More than half of disgruntled German voters would as soon forget about this election, suffocating in a flood of reform proposals for the economy, welfare, taxes, pensions, health, environment, school lunches and so forth, all headed for oblivion after the election. Experts speak of “reform fatigue.”

Surprisingly, the CDU conservative opposition, headed by forthcoming, down-to-earth Angela Merkel, 51, has been unable to translate its pragmatic conservatism into a solid majority.

Highlighting values and investment cycles in the framework of Germany’s free-market and modern welfare state tradition, the CDU’s ratings hover in the traditional 44 percent range. To claim victory, Mrs. Merkel faces a coalition with the liberal Free Democrats, who muster a modest 7 percent of the voters, or a “grand coalition” with the Social Democrats, an option both Mrs. Merkel and Mr. Schroeder have rejected vehemently.

Much has been written about the political adroitness of the former scientist from communist East Germany who under the tutelage of former Chancellor Helmut Kohl climbed the political ladder into his Cabinet in record time.

Known to protect her turf at all costs, Mrs. Merkel is not without detractors in her party and its Bavarian sister, the Christian Social Union, headed by a critic, former chancellor candidate Edmund Stoiber, defeated by Mr. Schroeder in 2002.

Taking a sober scientific approach, Mrs. Merkel says how she plans to cure the “German disease,” analyzed by her as chronically high unemployment connected to high labor costs.

To make labor less expensive she would, for starters, raise the value-added tax by 2 percent and use the extra revenue to cut unemployment insurance contributions.

Politicians seldom include tax raises in their campaign material. Not a friend of unions, Mrs. Merkel cites their dwindling importance. She also speaks of decoupling the social security system from labor and the necessity to make the labor market more flexible. These are capitalistic perspectives German audiences have not been asked to consider since 1998 when the Social Democrats took the lead.

A government led by Mrs. Merkel would certainly improve Berlin’s strained U.S. relations. “We need to rebuild a climate of trust,” writes Merkel foreign-relations adviser Wolfgang Schaeuble. The former interior secretary in the Kohl administration not only advocates a “fair sharing of burdens,” but unlike “peace Chancellor Schroeder,” condemns “populist anti-Americanism.” While Mrs. Merkel would slow expansion of the European Union, denying full membership for Turkey, she offers to support American intervention in Iraq without committing German troops. On Iran, she is less forthcoming.

Disenchanted with euphoric new beginnings, the public expects concrete economic growth proposals as social problem solvers.

The rise of the left and right must be evaluated in that context. The new Left Party has gained significance as Germany’s third-strongest party. According to recent polls, it attracts 12 percent of the vote while the well-established Free Democrats polled 7 percent. Cool, hip and with it, the Left Party is a merger of the Alternative Party for Labor and Social Justice (WASG), founded by Mr. Schroeder’s former finance minister and nemesis Oskar Lafontaine, famous for his radical socialist views and personal French chef, and the Party of Democratic Socialism (PDS), successor of East German communists (SED).

Should Mrs. Merkel’s popularity suffer a further setback before the Sept. 18 election, the Left Party’s current strength could invite a triad coalition with the SPD and Greens.

An alternative would be an unwelcome “grand coalition” of the two major parties ensuring the exit of Chancellor Schroeder, who is not expected to play junior partner to Mrs. Merkel.

It has been noted with keen interest that, just days before the elections, the chancellor dispatched Karsten D. Voigt, German Foreign Ministry coordinator of German-American relations, on a high-level diplomatic mission to Washington.

Anticipating tactical gridlocks and political stalemates a “grand coalition” may not be a great solution. But, looking at the Grand Coalition of 1966 with its flourishing debates on Ostpolitik and social security, it may be better than its reputation.

Besides, last time it only lasted for three years.

Viola Herms Drath is a member of the executive committee of the National Committee on American Foreign Policy and was awarded the 2005 William J. Flynn Initiative for Peace Award for her seminal work promoting German reunification.

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