Germany’s Social Democrats, Victorious at the Polls, To Seek Coalition with the Greens [Week in Germany, Oct.2, 1998]

There was no rest for the weary in Bonn this week. After the long Bundestag campaign came to a close on election night Sunday (September 27), after Helmut Kohl conceded the election to Gerhard Schröder, Germany’s major parties were at work first thing Monday morning preparing for the transfer of power. [Die SPD schaffte es mit 40,9 Prozent der Stimmen und 298 Bundestagsmandaten zum zweiten Mal seit 1949, stärker als CDU und CSU zu werden, aber zur Alleinregierung reicht diese Mehrheit nicht: Die anderen Parteien haben zusammen 371 Sitze im Parlament. Also brauchen die SPD und Gerhard Schröder einen Koalitionspartner. Theoretisch kommen dafür die Grünen (47 Mandate), die Union (245) und die FDP (44) in Frage. Mit jeder dieser Parteien ergäbe sich rechnerisch eine „Kanzlermehrheit“, die bei 335 Abgeordneten beginnt. Die PDS scheidet als möglicher Partner der SPD schon deswegen aus, weil die zur Kanzlerwahl erforderliche Mehrheit nicht zustandekäme - von den politischen Komplikationen einer solchen Koalition ganz abgesehen.]

Kohl Defends Policies at CDU Conference, Takes Aim At Social Democrats [Week in Germany, Oct.17, 1997]

Germany’s Christian Democratic Union offered a preview of the campaign for the 1998 Bundestag election as it met this week to set its agenda for the coming year. The CDU does not plan to formally launch its campaign until next spring, but that did not prevent Helmut Kohl, its longtime chairman, from predicting at the party conference that opened Monday (October 13) in Leipzig (Saxony) that the upcoming vote will be one of the most hard-fought electoral contests in the Federal Republic’s history. The opposition Social Democrats and Greens are determined to take over responsibility for governing Germany, Kohl told the CDU rank and file, and he is equally determined to lead the governing coalition to a fifth consecutive victory at the ballot box.

Reforms at home and closer European cooperation will be the main issues the coalition intends to address during the eleven months that remain before the election, Kohl reported in his keynote address at the start of the Leipzig conference. Measures to cut labor costs and to improve vocational training for young people are, according to the chancellor, urgently needed to help address the problem of high unemployment. Pointing to the governing coalition’s efforts now underway to reduce labor costs by reforming Germany’s pension system, Kohl told the conference that his government is doing its part to help put the jobless back to work. As for the failure of its tax reform plan, he blamed the opposition Social Democrats and Greens for using blockade tactics to stand in the way of reform. Only the CDU and its coalition partners, the CSU and FDP, are capable of carrying much-needed reforms forward. “It is a question of progress or stagnation,” Kohl said in drawing a contrast between the coalition and its parliamentary opponents. “It is a question of renewal (Aufbruch) or decline (Abstieg). Those are the clear alternatives.”

Turning from domestic policy, Kohl underscored his determination to bring the process of European integration so far along that there can be no turning back. The most important task toward that goal, he told the Leipzig conference, is carrying through the plans for establishing a common European currency. Acknowledging that many Germans are worried by the prospect of the D-Mark’s demise, the chancellor argued that the currency union is a crucial part of Germany’s efforts to meet the economic challenges it faces. “An important part of our answer to globalization is Europeanization,” Kohl declared. “For that reason, we are making sure the euro will come - on time and as a stable currency, according to the agreed upon criteria.” “The euro is coming and it will be stable,” likewise insisted CDU Bundestag leader Wolfgang Schäuble in his speech to the party conference Tuesday (October 14). Schäuble used the occasion to defend the governing coalition’s decision to go ahead and use its majority in the Bundestag to pass the government’s pension reform plan

Demographic developments make an overhaul of Germany’s pension system imperative, he argued. Much more, he went on to suggest, needs to be done to reduce Germany’s high labor costs and to stimulate its moribund job market. Germany’s taxes are also too high, Schäuble insisted, and the governing coalition’s reform plan remains the best proposal for reducing them. Predicting that the Social Democrats’ success in blocking the coalition’s tax reform plan will cost them the election next year, Schäuble told the conference delegates that the CDU should be ready to present the plan for parliamentary approval when the new Bundestag is convened.

Schäuble was the subject of a surprise announcement the next day. Shortly after the Leipzig conference came to a close Wednesday (October 15), Chancellor Kohl told reporters he hopes to see Schäuble succeed him in the chancellery. Kohl’s choice of Schäuble was itself no surprise - “Everybody knows I want to see Wolfgang Schäuble become chancellor one day,” he noted - but the announcement, coming hard on the heels of his declaration of his intention to seek reelection, was unexpected. While unambiguous in voicing his support for Schäuble, the chancellor was less clear on when exactly he would like to see Schäuble take over in his place. Asked whether he would serve a full four-year term if reelected, Kohl simply said he would decide that “at the appropriate time.”


To put jobless Germans back to work, the Social Democrats want to cut labor costs and to give tax payers a bit more spending money. Prime Minister Gerhard Schröder of Lower Saxony, the SPD's main spokesperson on economic policy, presented the party leadership's new economic program to the press in Bonn Monday (September 15). By shifting tax burdens and reducing payroll social welfare contributions, the Social Democrats contend their program will spur the economic growth necessary to reduce unemployment in a socially just manner. Atop the SPD's proposals is a cut in non-wage labor costs. At present, payroll social welfare contributions, paid half by employers and half by employees, stand at 42 percent of gross wages. The Social Democrats would scale back payroll contributions and make up the difference by increasing the subsidy the federal government provides the pension and unemployment insurance funds. To pay for the higher subsidy, the Social Democrats would raise petroleum taxes and the value-added tax, the sales tax paid on most all products. Many Germans would see their tax bills drop if the Social Democrats have their way. Income tax rates would be reduced, particularly for individuals and families at the lower end of the income scale. This reduction would serve above all to bolster buying power and stimulate consumer spending, which the Social Democrats say will help encourage job growth. The SPD program includes recommendations for increasing research funding and for promoting the development of new technologies and industries. These recommendations, Schröder told the press in outlining the program, show that the Social Democrats are unambiguously committed to promoting economic growth and technological innovation.

Both the content and presentation of the proposed program invited speculation about the direction the SPD is heading. The program is in large part Schröder's work, and many of his fellow Social Democrats have voiced doubts in the past about his business-friendly views. He was joined in presenting it to the press Monday by the party's national head, Prime Minister Oskar Lafontaine of Saarland. Both men are widely believed to be interested in standing as the party's candidate to oppose Chancellor Helmut Kohl in the September 1998 Bundestag election. During Monday's press conference, Schröder said the new program contained a number of compromise formulations, but the party has clearly come to the view that wealth must be created before it can be redistributed. Lafontaine, praising the program, underscored the connection it makes between the party's new economic views and its traditional social concerns. The economic program will be submitted to a party conference for rank-and-file consideration in December. A decision on who will head the SPD ticket next fall is not expected until the spring.