/ 20 March 2003

Can Germany avert looming disaster?

Andrea Nahles raised her voice. ”Germans are afraid of everything,” she said. ”They really are rabbits.”

It would be hard to find anyone who better embodied the contradictions that go into making up Germany than this 32-year-old member of the Social Democratic Party (SPD) executive.

She is the spokesperson of the party’s most radical faction and the proud owner of a framed photo of Fidel Castro, which hangs on the wall of her office. But she is also the wife of the personnel director of Audi, himself a former trade unionist.

Although, as a left-wing socialist, Nahles eschews neo-liberal solutions to economic problems — like most Germans of her age — she believes that many of the systems and procedures that once served her country so well are in crying need of change or replacement.

Frustration has been growing in Germany for years, especially among the young and the jobless, who are often one and the same. But until last year, it was counterbalanced by an even greater weight of complacency and trepidation about change, particularly among the middle-aged and the securely employed.

Events after Gerhard Schröder’s re-election and his ”red green” coalition seem finally to have tipped the scales in the opposite direction.

Voters were appalled to discover that the hole in the state’s finances was much bigger than the government had let on before polling day and even more shocked to learn that the government was filling the void with a mixture of new taxes and increased national insurance contributions.

A survey published in January by Gallup showed that Germans had the least hopeful outlook of any people on Earth. Even the Argentinians were more optimistic.

Yet it seems a determined response is at hand. On March 14 Schröder was expected to deliver what is being presented as a landmark address in which he will outline a programme of radical reform. Though the details were still being hammered out, members of his inner circle said the flavour of his proposals would be distinctly Blairite.

If anything makes Germany today reminiscent of 1970s Britain, it is the largely fruitless tripartite discussions between the government, employers and unions that have been dragging on since the Social Democrats came to power. On March 3 the chancellor let them collapse.

According to someone present at the final session, he told the unions that his speech would have them ”howling and gnashing your teeth”.

So is Germany at last about to change? Has its chancellor finally been persuaded that consensus is for wimps, and that his only chance is to go flat-out for growth-oriented policies, regardless of the anguish they may initially provoke?

What has led to the alteration of course that is apparently imminent is not a change of mind, but a change of circumstances.

The drubbing Schröder’s party received last month in his home state of Lower Saxony, in effect, gave the Christian Democrat opposition in the upper house, the Bundesrat, a veto over his legislative programme.

Wolfgang Nowak was the head of the chancellor’s policy unit until he was quietly allowed to leave the chancellery after the last election. ”Schröder is not a man for long-term planning,” he says. ”That was always my problem with him. He is a man for sudden action. He comes.

He sees a situation. He acts. And seven times out of 10, he’s right in what he does. He is the master of the moment. A man of rare brilliance.”

Nahles, from the opposite wing of the party, agrees. ”In the whole of his life as a politician, Schröder has never been able to provide a strategy or draft a programme,” she says.

It is this sort of criticism from within the SPD that has prompted talk of a move to drop the chancellor in favour of a leader with clearer ideas. But Katrin Goring-Eckardt, the parliamentary leader of the Greens, the junior partners in the coalition, argues that the chancellor does, in fact, have a commitment to reform.

”Gerhard Schröder is a chancellor who wants to bring about change, but who at the same time is chair of the SPD. So he has not only to bring about changes, but also to convince his supporters of the need for them, and that is not easy with a big social democratic party.”

This struggle will be central to the rest of Schröder’s term of office. Having tasted so much power and influence in recent months, will Germany’s trade unions be content to sit back and let the chancellor take a neo-liberal path, watched admiringly by the centre-right opposition? If not, can they stop him?

The power of the trade unions in Germany is awesome. Der Spiegel estimated recently that about 190 of the SPD’s 251 MPs were union members. Privately, Greens say the unions are better informed about the SPD’s intentions than they are.

So can the great escapologist survive? Hildegard Muller, an MP and the leader of the young Christian Democrats, believes he can. But not without reservations. ”In Germany, we have had three great changes of government, and each of them was associated with unemployment,” she says.

Last week the unadjusted jobless figure reached 4,7-million. Only twice in the history of the federal republic has it been higher.

”This is the issue that, in Germany, can change the political landscape,” says Muller. ”If, by year’s end, we have five million unemployed, then it will become very tricky for the Social Democrats.” — Â