PROFILE: NEW GERMAN CHANCELLOR GERHARD SCHROEDER
By Birgit Jennen
BONN (MktNews) - After 16 years of the conservative Helmut Kohl, the German government is once again led by a Social Democrat (SPD), Gerhard Schroeder.
Schroeder's SPD is widely expected to form a ruling left-wing coalition with the environmentalist Green party. But what policies this alignment will espouse is still unclear, subject not only to negotiations between the partner parties but also debate between the pragmatic and liberal wings of the SPD.
Schroeder has tried to shed the left-wing, socialist image of the SPD, seeking a pragmatic middle way that is at least rhetorically more committed to supporting German business interests and preparing the country for economic modernization. But Schroeder was criticised throughout the campaign for failing to detail his proposals for reform.
His critics argue he is a political chameleon who will to take any position to satisfy his ambition for power, while his supports say he is simply a pragmatist.
What is clear is that there is less certainty about the new government's policies than at any time in the recent past.
ECONOMIC REALISM FROM THE SPD?
After winning the Lower Saxony election in March, Schroeder (54) has risen swiftly to the top of German politics, bringing down for the first time in post-war history a sitting chancellor through elections. The man who ended the reign of Kohl has set out to introduce some economic realism into what he once called the "cartel of mediocrity" in his own SPD party.
Schroeder's economic policies indeed depart from those of the traditional left-wing of his party. Much to their dismay, Schroeder is committed to scrapping left-wing spending policies and state-interventionism, and instead acknowledge the primacy of the free market economy, Franz Walter political expert of the university of Goettingen told Market News International.
"We have to help to strengthen the economy, only then will social standards are safe,... and only then we are able to create new jobs," Schroeder told his Bonn audience on the opening of the election campaign.
In fact, a policy of higher spending to finance expensive social welfare programs is unlikely to be conducted under a Schroeder government. On the contrary, Schroeder is not only committed to the aim of consolidating the budget and ensure compliance with the fiscal standards for European monetary union. Schroeder also has indicated he would like to follow the British example and cut social security for anyone who refuses a job offer, saying repeatedly that he wants to finance employment instead of the dole.
BUT SCHROEDER STILL "SOCIAL" DEMOCRAT
Yet, to see Schroeder swapping sides, leaving behind any notion of socialism, would take his sense for change too far. While Schroeder might have abandoned some of the traditionalist SPD inhibitions over the market economy, there is no doubt that Schroeder remains a "Social" Democrat.
"A policy which foresees a cut of social expenditures to reduce public expenditure won't work with him," Wolf-Michael Catenhusen a fellow SPD board member told Market News International.
One thing is clear: Schroeder's economic policy will be a long way from a minimalistic government approach.
While he has repeatedly expressed reservations about the extent of government subsidies, he has used them extensively as premier of the state of Lower Saxony. Indeed, just prior to the state election this year, Schroeder shunned privatisation and pumped public money into Preussag, a beleaguered steel company that is a major employer there.
Schroeder is not a champion of a completely free market but a man of the "third way," his supporters say. Instead of leaving the market to run itself, with the government merely setting its boundaries, Schroeder "promotes a dialogue between the players in the economy," seen in his plans to revive the alliance for jobs pact between employers, workers and the public sector, Catenhusen stressed.
But critics say his policies don't match his rhetoric.
Schroeder's plan to revive the round-table talks has met only with limited support from business leaders, who argue it fails to confront the real problem: lack of adequate economic reforms.
"Any time Schroeder speaks about action, he first means talking. Schroeder sees himself as a (talk show) host," the prominent newsmagazine Der Spiegel has written critically.
Critics also note that despite Schroeder's talk of economic revival, he has a less than stellar record as premier of Lower Saxony, the fourth largest west German state. Lower Saxony has one of the highest unemployment rates in west Germany. Moreover, it posted the lowest real growth rate of any of west Germany's 11 states in 1997.
SCHROEDER'S POLICIES NOT WELL DEVELOPED
In fact, Schroeder's blueprint for government is not well developed. The question of how to finance the SPD's tax reform plan -- which foresees a lowering of personal income tax rates and corporate tax levels -- has so far not seen the light of day. The SPD says it plans to lower the top income tax rate to 49% from 53% presently, the bottom tax rate to 15% from 25.9% and the corporate tax level to 35%, but has only vaguely said that these would be paid for by reining in tax breaks and somehow making the wealthy pay more.
Schroeder's lack of detailed plans can also be seen in foreign policy. "His position on Europe is not yet fully developed. What he said half a year ago can change tomorrow," Walter said. He pointed to Schroeder's sharply critical remarks that the new single currency would be born as a "premature child," a position he later toned down after it became clear it was not a vote-getter.
Yet, with Social Democrats now running the governments in Britain, Germany, France, the Netherlands and Sweden, and with most -- with the exception of France -- governed by likeminded modernizers as Schroeder, a closer European dialogue will likely take place.
Likewise, Schroeder's global political policies seem so far not to have passed the stage of dialogue. In a recent interview with the newspaper Die Zeit, Schroeder urged closer international co-operation in particular among G-8 countries.
Schroeder has called on the international community to develop "standards" for the financial markets, a demand which seems to leave more questions open than it answers. It is not yet clear if Schroeder backs the call by party chairman Oskar Lafontaine -- who may well become finance minister -- to introduce a European-style exchange rate mechanism for major international currencies.
CRITICS SEE SCHROEDER AS MACHIAVELLIAN; FRIENDS SEE PRAGMATISM
Not surprisingly, Gerhard Schroeder has become the focus of fierce scrutiny not only from the CDU/CSU opposition but also from within his own party, for failing to articulate a vision. For many critics, Schroeder is a Machiavellian leader, simply driven by his own ambitions for power. That image has been fuelled by a well-reported incident in his past when Schroeder, after a night out in Bonn, passed the gates of the chancellery screaming: "I want to get in there."
But Walter expresses a different view. To him, "Schroeder is the new generation of political leader: the new manager type," who develops his strategy as he goes along -- on the job.
Indeed, gone are the times of the grand ideologies. Schroeder doesn't subscribe to any strict dogma. His policies are characterized by "ad hoc" decisions. He is "an unorthodox pragmatic politician," as Catenhusen describes him.
Instead of political dogma, Schroeder cultivates his own image. Like a chameleon he changes his colour dependent on the people he is talking to. While addressing a business community, he polishes his image of the "friend of the bosses," before turning to his trade union fellows where he cherishes his working class background: the father a workman at an amusement park and a cleaning woman mother.
In his personality show, Schroeder is well aware of how to use the media, in particular the television. "He is not as loud as Lafontaine, he doesn't mumble as Kohl and doesn't give such a grim impression of a tax collector as (Rudolf) Scharping," the SPD chancellor candidate in 1994, Walter said.
Accordingly, Schroeder's popular appeal carried him as far as to become the new chancellor. Yet, behind the background of much antagonism from within the SPD, it remains to be seen whether he will be successful in pressing through his modernizing zeal first in his party and then in the country.
04:04 EDT 09/28
© 1998 Market News Service, Inc.
economeister.com |
