In early July, as the final session of the Bundestag drew to a close and German MPs began to prepare themselves for a long summer of election rallies, the angry chest beating that characterised the party conferences earlier in the year seemed a distant memory. While Edmund Stoiber, the candidate of the Christian Democratic Union and its Bavarian sister party, the Christian Social Union, led Gerhard Schroeder in the polls by six points (35 to 41), Germany s first ever face-to-face election debate was marked by a return to the courteous political discussions that are the country s norm. However, the outbreak of corruption scandals sparked by the dismissal of the Defence Minister, Rudolf Scharping, seems to have put an end to speculation about the possibility of a grand coalition after the elections, unheard of since 1966.
While both parties are keen to occupy the middle ground, important differences appear in the detail of the policies proposed. Consider, for example, taxation one of the three main issues on which the election is being fought. From the centre-left, the SPD proposes to continue current reforms to the personal taxation system, lowering top levels to 42 percent by 2005. The CDU/CSU, however, wish to speed up and extend tax reform by lowering the top rate to below 40 percent by 2004, abolishing the energy tax in 2003, offering tax breaks to parents, and even reviewing the SPD s abolition of the corporate capital gains tax. Taxation is thus typical of the Christian bloc s approach to the election. Here, as elsewhere, Stoiber is attempting to characterise the Chancellor as a man who promises a lot and delivers little .
Indeed, this is not that difficult a task to pull off. The promises of a bright new future proposed in June 1998, in the joint Blair-Schroeder paper Third Way: Neue Mitte, now seem a distant memory. Nowhere is this more apparent than in the field of employment. Among the measures called for were the introduction of targeted programmes for the long-term unemployed, the assessment of all benefit recipients for their potential to earn, and the reform of state employment services to assist those capable of work to find appropriate jobs. Schroeder accorded employment policy such importance he said that if he had not reduced unemployment to 3.5 million by 2002 he did not deserve re-election.
Conservatives are only too happy to remind him of that statement. Germany is currently witnessing record levels of unemployment, which now stands at over four million. Indeed, if the Social Democrats recover from the aftermath of Scharping s departure, many believe that it is employment policy that will decide the election. To make matters worse the DIW, the German Institute for Economic Research, has forecast growth of only two percent in 2003, well below the government s planned rate of 2.5 percent.
This has dampened hopes spurred by the Hartz Commission, which claimed that measures could be taken to halve unemployment in three years. The commission, established by the Federal Labour Office as a response to the controversy sparked by recent unemployment figures, was headed by Peter Hartz, personnel director at Volkswagen and a leading proponent of the four-day working week. The recommendations of the commission mirror those of the Blair-Schroeder paper four years earlier, emphasising the need to speed up registration, increase temporary work opportunities, boost tax incentives for self-employment, and encourage greater labour mobility.
It is, of course, difficult to judge Schroeder s credentials as a reformer. As in France and Italy, the constraints of coalition government have proven problematic. They have either held up or reduced the visibility of reforms in order to placate coalition partners, or coalition partners have been allowed to claim credit for those reforms pushed through as is the case with German Greens on nuclear power, nationality, homosexuality and bio-agriculture. However, education may provide an indicator. The recent reforms proposed by Schroeder, which include greater autonomy for school-level decision-making and a national performance table, have received a mixed reception. Meanwhile, an OECD study on education, which highlighted the relatively poor performance of the German education system in comparison to its fellow OECD countries, has sensitised the German population to the need for reform. Some are asking why it took so long for the government to recognise this and initiate the process. In comparison, Stoiber has called for measures to further liberalise the labour market, which would fundamentally alter the traditional collective bargaining structures and job security that have been the hallmark of the German economy.
Comparing the recommendations of the Hartz Commission and the Blair-Schroeder paper, then, one might be tempted to argue that if Schroeder was unwilling to push similar reforms through earlier, why should the German electorate have confidence in him now? However, such a reading would be unfair. When it was first drafted, the Blair-Schroeder paper was considered an unworkable rightwing document. Four years on, Hartz s comparable recommendations are viewed as realistic proposals for reform. If Schroeder is to convince Germany that he is a credible reformer, he must gain the full support for his vision within the SPD. If he is successful in bringing the party along with him, then he may just manage to bring the country, too.