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18 October 1999

No more big fat goofs for Schroder

Germany's chancellor knows his biggest blunder was to go on TV too much. But abandoning Blairism may

By David Lawday

Poor Gerhard Schroder. It hasn’t been easy to fill the shoes of a political giant like Helmut Kohl. The Social Democratic showman was brimming with self-confidence after his election victory a year ago and seemed convinced he could fashion a new Germany in next to no time. This was an illusion. Some things his devastating smile could not achieve. It was surely inevitable that following Kohl’s 16-year reign Germany should wobble a while before rediscovering its stability.

Schroder’s chancellorship is so far one of deep hubris. The blows fall one after the other, heavy, seemingly endless. It isn’t pretty to watch the stuffing knocked out of a politician over-endowed with personal stuffing. His party’s recent election defeat in the city-state of Berlin, the new hub of political power, follows state election reverses in both western and eastern Germany. These have lost Schroder the left’s long-standing majority in the Bundesrat, Germany’s upper house, where conservatives can now hobble his plans.

Add to that the booing he received at the annual conference of the metalworkers’ union, Germany’s most important labour movement. And, unkindest of all, the lethal political memoir published by his former political partner and rival, Oskar Lafontaine, who resigned as finance minister last year when Schroder stopped him imposing old left economic ideas. Imagine Gordon Brown coming out and publicly trashing Tony Blair’s policies, substance and style, denouncing him as a betrayer of election vows, and you have a measure of the extraordinary vengeance that Lafontaine has unleashed. His bile now seems so overdosed with spite that it might help redeem Schroder’s notoriously shaky standing in his party. Even left-wing Social Democrats are recoiling with distaste from their erstwhile hero’s assault. Lafontaine has gone beyond the political pale.

What appears to have brought the chancellor himself perilously close to the pale in voters’ eyes is not just his liberal economic programme but his personal exhibitionism. It was all right to come to power as “the bosses’ pal”, but to parade as he did in Italian suits and smoke fat Cuban cigars conjured up a cosiness with the wrong kind of bosses. He also courted television, guesting on Germany’s favourite game show and accepting a cameo role in Germany’s most popular soap opera. Anything to get on camera.

His intention in all this was to appear modern and make Germany look modern after the fuddy-duddy Kohl age. But opinion, at first amused, came to regard it as a cheapening of office. Schroder has learnt his lesson. These days he is giving the media a wider berth. “I made some big fat goofs,” he engagingly admits.

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The problem of his economic policy goes to the heart of his relations with Blair and their recent co-authorship of a Third Way (or Neue Mitte) political manifesto. This upset a third major European leader elected on the left, Lionel Jospin of France. Jospin did not want – and was not asked – to put his name to it. Where, Jospin wanted to know, was the social justice in their market philosophy? Schroder’s aim is to modernise the German economy, a good old machine which has long been sputtering. Its strength was a lumbering compact between labour, industry and government called consensus. Unfortunately consensus doesn’t work so well in the global economy, where speed and flexibility are all. The resulting seize-up has driven unemployment to 10-11 per cent. Schroder’s proposed solution is not spectacularly different from one that Kohl’s conservatives conceived and failed to impose against Social Democratic opposition: major government spending cuts coupled with tax reform to assist business. Schroder’s proposed budget cuts of DM30 billion next year have the wholesome objective of reducing Germany’s outsized national debt. But they are achievable, he insists, only by pegging back welfare, starting with state pensions.

This affords a fit with Blairism. Germans, though, are clearly not as enamoured of Third Way assaults on welfare as Blair is convinced we Britons are. They still prefer their familiar social-minded German economic model which has brought them wealth and comfort. Rusty it may be, but it’s theirs. Telling them to trade it in for a hard-seated racer is probably even more difficult for Schroder than it was for Kohl.

If Germany’s erstwhile charmer is to maintain a scrap of credibility he knows he must stay with his programme. The Fun Chancellor, his advisers want it said, is the Firm Chancellor. He will fight to the finish for his economic programme because he believes there is no alternative. But how can he stop the haemorrhage of popular support? Instinct tells him to ease away from Blairist talk. His former image-shaper Bodo Hombach, who drew up the Blair-Schroder manifesto with Peter Mandelson, is now conveniently out of the way overseeing Bosnia’s rebirth. A change of image is in the works at the Berlin chancellery. The watchword is no longer so much “competitiveness”, rather the “common good”; Neue Mitte is muted in favour of “our German model”.

Schroder’s makeover is not all words, however, which is just as well since his entourage is not too adept at spin. Clearly he has been rethinking his identification with Blairism. Inexplicable things happening in France have helped prompt the rethink. Schroder has rather let things slip with France. It isn’t just that he upset Jospin with the Third Way manifesto. Seemingly minor matters have created deeper friction, such as his turning down a routine invitation from President Jacques Chirac to attend annual French ceremonies marking the end of the war. This is the kind of event that previous German chancellors have religiously attended.

On his election Schroder wanted to end the more clinging forms of Franco- German ritual. It is hard to fault him on this. To be modern, Germany had to be normal. Kohl’s departure was the opportunity to break with the obsequiousness Germany has practised as high policy since the war. But maybe Schroder set about it a little too brashly. “German interests” became the outspoken concern of his European policy (no doubt they were Kohl’s concern, too, though he refrained from saying so). The new chancellor fought with Thatcherite tact for a cut in Germany’s outsized contribution to the EU budget. His table- thumping might even have improved his popularity at home if he had obtained a solid Thatcherite pay-off, which he didn’t. None of this went down well with France.

Kohl, a dethroned emperor still adorned with moral authority in the Berlin Bundestag, has taken to reminding his successor that German chancellors don’t make it obvious they are pushing their weight around and, in dealing with France, they bow once to the German flag and three times to the tricolore. Schroder isn’t yet badly enough whipped to want to swallow such advice. “We do not believe the lowest tone is the most effective,” he has explained to Jospin in person. “What counts for us is an honest tone. Honesty alone creates true confidence.”

Schroder’s urge to ease away from Blairism, however, is nourished by those “inexplicable things” the French economy has been up to. Jospin’s studied old left lingo makes it hard for economic liberals to believe that France’s current growth performance is stronger than Britain’s, let alone Germany’s. But there it is. Jospin plugs away at social progress, defending welfare and making himself popular, and all the time the French economy grows rather nicely. It doesn’t escape Schroder that Jospin’s left-wing language masks economic policies as market-minded as his own. Hence the appeal of Jospinism over Blairism at this fraught moment in his chancellorship. The Franco-German tandem is out of the garage once more.

Not even the Germans, who, heaven knows, loved their Deutschmark, blame the advent of the euro for their country’s problems. It is true the euro was born shortly after Schroder took power. But the problems the new chancellor has failed to resolve, starting with high unemployment, have been there for years. Germans know that, too. Moreover, their economy is rebounding; growth could reach 2 per cent next year, a decent advance on stagnation.

With its new leverage in the Bundestag, the right could block Schroder’s economic reform, but probably won’t in the end. It wants to embarrass Schroder, not hold back Germany. The plan is, after all, very much what the right wanted. As the Firm Chancellor concentrates on his image correction, his fall from office looks most unlikely, even though Rudolf Scharping, the defence minister, is circling his master’s desk.

A year ago, Germans clearly voted for Schroder personally to lead the country, not his party or its lesser lights, and still less the difficult Greens with whom he is obliged to share power. Through it all he seems right for the droll, gritty capital that is Berlin. He likes being installed there. To him Berlin is a draught of fresh air for stale German politics. Berliners may not have taken him to their hearts yet, but his troubles at least look as though they have bottomed out. Once a little freer of Tony Blair’s philosophical embrace, he could mount a comeback.

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