Germany stalked by the spectre of political stasis
The German body politic is crippled by caution. After seven years of half- hearted reform and rising unemployment under Gerhard Schröder, the conservative opposition fl oated the bold idea of a fl at rate of income tax. Its proponent, Paul Kirchhof, has spoken tantalisingly of reducing the voluminous fiscal rule book to the size of a beer mat. Yet, although he is financial adviser to Angela Merkel, the chancellor’s main rival, she has not included his proposal in her party’s manifesto. Instead, she talks of implementing it after a supposed second electoral victory in 2009.
Her caution, in the face of opposition from within her own Christian Democratic Union ( CDU) and its Bavarian sister, the Christian Social Union ( CSU), has deprived her campaign of much of its potential impact. After two terms of mediocre stewardship under Mr Schröder, a challenger needs to adopt an audacious reform programme from the start, not postpone it to an uncertain future. Worse than that, it has allowed the chancellor, through gross misrepresentation of Mr Kirchhof’s ideas, to claim that a flat- rate tax would destroy the welfare state and create an uncaring society. In the opinion polls, this line of attack has lifted the standing of his Social Democrats ( SPD) to 35 per cent, suggesting that Mrs Merkel may not get enough votes on Sunday to form a coalition with the Free Democrats ( FDP). By failing to persuade her party to endorse a fl at- rate tax, she has both lost an opportunity for radical reform and exposed her fl ank to the Left. To lose on both counts is politically cack- handed.
The more’s the pity, in that the German Gulliver needs to be rid of Mr Schröder and the Left if it is to loosen the Lilliputian bonds of regulation. While Mrs Merkel is proving no radical, she at least intends to stimulate job creation through a more fl exible labour market and to lower the highest and lowest rates of income tax. The ability to form an overall majority with the FDP will give her the chance of reviving an economy sapped by political compromise within the former Red-Green ruling partnership. If she fails, the prospects are of a grand coalition with the Social Democrats, a recipe for stagnation, or even an alliance — which would exclude her — of the SPD, the Greens and the Left Party newly formed by Oskar Lafontaine and Gregor Gysi.
On Sunday the voters have a choice between political stasis and a party that deserves the chance of governing in coalition with the FDP. The Schröder years have revealed the comfortable old social democratic consensus as unequal to present challenges. May recognition of the need for change prevail.