From the article of 'Petrel'
No.697 / October 11, 1998
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Social Democratic Government in Germany
Schroeder's "Reforms" are a Fantasy
"New Moderation" No Different from Kohl
On September 27 the opposition Social Democrat Party defeated the Christian Democratic Party led by Prime Minister Kohl and advanced to become the number one party. Gerhard Schroeder became the new Prime Minister marking the first change of government in 16 years. Since the SDP don't have an outright majority a coalition is being formed with the Environmental Protection Party (League 90 Green Party), but workers shouldn't hold out any expectations for this "Red/Green" coalition government.
To Begin
First let's take a brief look at the results of the election.
The ruling Social Democratic League had 245 seats, the opposition SDP 298 seats, the Green Party 47 seats, the Liberal Democratic Party 44 seats, and the Democratic Socialist Party (former German Communist Party) had 35 seats.
The SDP became the number one party, and form the majority with the Green Party with a combined total of 345 seats, and 669 for the entire parliamentary system. The SDP gained 40.9% of the votes, a nearly 5% increase from the last election in 1994 where they gained 36.4% of the total. This was the first time for the SDP to be the number one party since 1972 and the first time to get 40% since the 1980 election. On the other hand, the Democratic Social League dropped more than 6 percentage points in this election to 35.1% from 41.5% in the last election. This is a huge historical defeat, since it has been nearly half a century since they were below 40% with 31% in 1949. The voter turnout was 82.3%, up from 79.1% in the last election.
As for the other parties: the Democratic Socialist Party cleared the stipulated 5% by holding onto 5.1% (last election 4.4%), reflecting the dissatisfaction in the former East Germany. The Green Party and the Liberal Democratic Party both gained fewer votes with 6.7% (7.3%) and 6.2% (6.9%) respectively. The extreme right was unable to obtain the 5% necessary to gain a seat in the parliament.
It was said that this election was a vote of confidence for the past 16 years of the Kohl government. In fact, there was no great point of opposition to the fundamental policies of the ruling party (and this trend was only strengthened more through the SDP right faction Schroeder, aiming to be the "German Blair", becoming the candidate for prime minister.) The question then was how the past 16 years of the Kohl government should be viewed. On this point the deadlock of Kohl government and the "German Model" it realized was exposed, and replaced by the Schroeder government.
The End of the Kohl Period
This election is signified by the end of one period. The Kohl government, which opened the path for the reunification of Germany and the integration of the EU, domestically held out the banner of a "socialistic market economy" and built up the German state as the strongest economically in Europe.
A "socialistic market economy" is one type of bourgeois liberalism policy which based on the free market economy says that it "plans for fairness and solidarity". Although "conservative" it is somewhat different in nature than the government of Thatcher in Britain or Reagan in the United States.
In Germany the joint management council of labor management cooperation is fixed, and working conditions and public welfare are fixed through labor-management consultations. The "German model" was realized in which due to high labor productivity there is a substantial welfare system, negotiations with the labor unions are seriously considering shortening working hours, and extending the summer vacation.
"For a long time after the war the German system of labor-management cooperation was praised as the 'German model'. Germany is behind only Switzerland and Japan in the world for least amount of working hours lost to strikes. The Germany workers average of 1,500 hours per year is the lowest in the world and more than 400 hours less than in Japan, and also have enjoyed the highest level of wages and social security." (Yomiuri Newspaper September 27)
But this "German Model" has gradually diminished the international competitiveness of companies, and recently the country has been inflicted with a high unemployment rate. It is said that the cost of labor in Germany is the highest in the world. The introduction of a 35 hour week in metal, electric machinery and printing industries before France and other countries, restrictions on dismissals, wage agreements, and a high level of social welfare was only possible due to the high productivity of labor in Germany.
The number of unemployed which numbered 1,850,000 (7.2%) just after unification, reached the highest postwar level this past January with 4,820,000 (12.2%), and in August the number recorded was 4,900,000. If we just look at the area of the former East Germany the number of unemployed is 1,580,000 (21.1% ). Proportionally there are more than two times as many unemployed here than in what was the former West Germany.
With international competition expected to becoming increasingly intense under the single market economy of the EU (from next January the Euro will be introduced as the single currency), the "Germany Model" is starting to become a burden for the German bourgeoisie. Companies are advancing production in foreign countries to avoid the high domestic costs. In 1997 direct foreign investment was ?? German Marks, which is nearly a threefold increase from 1994. Already half of the 400,000 employees of the electrical machinery maker Siemens are located overseas.
The fact that even though unemployment has reached a postwar high at over four million, the creation of employment in the important large Germany companies are unable to create employment signifies the deadlock and failure of the "German Model".
Meanwhile for the past few years Kohl has been emphasizing the maintenance of an environment to strengthen the competitive power of businesses. This is because for Kohl enabling the international competitive power of capital would create employment. Last year he announced large scale tax reforms such as the reduction the corporate tax rate on business' earned profits (from 45 to 35 per cent), and the revision of the rate of the highest income tax brackets (from 51 to 39 per cent), but this tax system that is beneficial to the rich didn't pass through parliament. With high labor costs and tax burden constraints, the international competitivity of German monopoly capital was growing weaker and dissatisfaction with the "German Model" was growing.
Moreover, the pain was shifted to the workers with the restricted financial policy (disappearance of pension and day care) enforced in 1996, along with the 80 per cent reduction in the secured wages for the six week of paid six leave, as well as the easing of restrictions for firing employees. The fraudulence of Kohl's "social fairness" is clear, and the increasing seriousness of employment instability is raising the dissatisfaction of the workers. A change is at hand for Kohl's "social market economy" and the "German Model".
The Illusion of Schroeder's "Revolution"
However, workers should hold out no expectations for Schroeder who criticized Kohl as the "unemployment minister", and appeared under the banner of a "new middle path".
He proclaims an "alliance for employment" and proposes an overall policy of cooperation between labor unions, management and the government to create jobs. The leader of IG Metal, Lischter, is also saying that "discussions should begin immediately on cooperation between the unions, management and the government on cooperation to create employment".
But to what extent can "cooperation" and "alliances" with management, instead of struggles against them, really solve the employment problem. Schroeder says that 'work-sharing' will check unemployment, but this is nothing but the foolish fantasy of worker-management conciliation.
Originally work-sharing was proposed in the Eighties by IG Metal and others. But now in the late Nineties, with the unemployment problem becoming more and more serious, the impotence of "work-sharing" has been completely exposed.
The main characteristic of Schroeder's employment policy is the increasing "cooperation" with capital, and the idea that the problem can be solved through the growth and prosperity of capital. On this point, there is no difference from Kohl. In the election platform Schroeder said the following:
"Innovations in the competitive power of business in the market economy is the greatest motive force for increasing employment. But the stability and harmony of society must also be maintained."
This position completely approves of the market economy, and says that increasing the competitive power of business is the greatest "motive force" for expanding employment. He places the defense of capital's interests first, and then just says something about the "stability and harmony of society". This is a completely bourgeois standpoint, and it is thus no surprise that he is so well received by management!
Jost Shorterman, considered to be an influential candidate for the post of economic minister in Schroeder's cabinet, said in the most plain terms: "If a business culture takes root, economic miracles should arise".
He is a businessman who started a computer network company and was successful, and is said to be one of the leaders of the new government. But the in the dream he envisages of miraculous development of the German economy, the expansion of employment is a mere "appendix".
Almost no essential difference can be found between the government of Kohl and that of Schroeder. He calls himself the "German Blair" and talks about the "third road" or "new middle path".
Foreign policy is a mere continuation of the former government. Schroeder states that, "Under the SDP government, the direction of Germany diplomacy, Europe, and defense measures will not change."
Likewise, no great difference can be seen concerning tax reform and pension reform. In this election there was a difference in that Christian Democrat League stated that they would alleviate the tax burden for high income earners, while the SDP said that they would consider the low income earners, but this is merely a difference of "tone".
"Despite some difference in tone, there is no great difference between the tax reform proposals of both parties. The SDP was opposed to reductions in the pension, the dominant view is that considering the painful state of the pension finances, the SDP will be unable to avoid some sort of reform." (Asahi Newspaper September 23)
The person closest to Schroeder and the SDP's economic brain, Ube Thomas as discussed the necessity of decreasing corporate taxes. "In order to alleviate the burden on business, a decrease in the highest rate of corporate tax and a lowering in the burden to social health insurance is imaginable."
Schroeder's bourgeois standpoint is perfectly clear. His pledge for "a new middle path" and "reforms" are a fraud. Workers can have not expectations of a fundamental improvement in the employment problem or any other.
In Lieu of a Conclusion
Finally I want to look at the proposed alliance between the Green Party and the SDP.
The position of the Green Party is quite different from that of the SDP. Whereas the SDP's position is "diplomatic continuity", the Green Party calls for the "dissolution of NATO" and opposes the dsipatch of troops outside of the NATO region. Schroeder has aimed for the in 20 to 25 years, while the Green Partycalls for the to begin right away. The Green Party also opposes the idea of linear railways, while advocating the creation of environmental tax (increasing the gasoline tax threefold), and a 100km speed limit for the autobahn.
However, either these policies unconnected to a criticism of capitalism as a system will be the "radical" and "leftist" lip service added on top of a civil society movement, or they will rapidly approach a bourgeois position. In the end, they will only be able to play the role of supporting the bourgeoisified SDP with empty phrases.
In fact, in the past twenty years the Green Party has also undergone a great change. "There are still many doctrinaire party members on environmental problems, but the parliament representatives already is a collection of realists." (Yomiuri September 29).
At any rate, the Green Party's participation in the joint government will not alter its bourgeois essence in any way.
Written by Akito Yamada
Translated by R. West