Bad News For Schroeder, Is Good News For US

[Annie]

http://www.opinionjournal.com/diary/?id=110006726

Gerhard Fall
Anti-Americanism reaches its limit in Germany.

Monday, May 23, 2005 12:01 a.m. EDT

SINGEN, Germany--Three years ago, Chancellor Gerhard Schroeder cynically used opposition to liberating Iraq to play an anti-American card just before elections in which he trailed his Christian Democratic opponents. He barely won a second term. Yesterday, facing a likely loss in elections in Germany's largest state, North Rhine-Westphalia, his Social Democratic Party's union backers played another anti-American card, this time depicting U.S. investors as blood-sucking parasites. Social Democratic chairman Franz Muntefering compared hedge funds to "swarms of locusts." This time, the tactic failed. Mr. Schoeder's party went down to a stunning defeat, losing the largely working-class state, home to one out of five Germans, for the first time in nearly 40 years. Last night Mr. Schroeder announced he would hold national elections this fall, a year ahead of schedule.

North Rhine-Westphalia, centered on the industrial Ruhr region of northern Germany, is home to 18 million people and would be the sixth largest economy in the European Union if it were a separate nation. It is beset by many of the same problems that plague Germany as a whole. Since 1995, the German economy has been growing at a slower pace than any other European country except Moldova. Germany is increasingly losing jobs and investment to countries that do not have its crushingly high wages and social welfare overhead.

Many commentators will explain away the Social Democrats' overwhelming 45% to 37% defeat by claiming it represents discontent with Mr. Schroeder's tentative moves to curb welfare benefits and reform labor laws. But if that were the real issue, the government's left-wing partners, the Greens, would have gained votes. Instead they lost support, finishing with only 6%. The Christian Democrats' free-market partners, the Free Democrats, received the same proportion of the vote. Indeed, if yesterday's vote had primarily been a left-wing protest vote, a new party, the Election Alternative Work and Social Justice, formed by dissident members of Mr. Schroeder's party, would have won seats. Instead, they failed miserably.

The centerpiece of the anti-American, anticapitalist campaign was a cover story in the magazine of IG Metall, Germany's largest trade union, which has a circulation of two million. The cover featured a fiendishly grinning mosquito with an Uncle Sam hat and the caption US-Firmen in Deutschland: Die Aussauger ("U.S. Firms in Germany: The Bloodsuckers"). The article's headline: "The Plunderers Are Here." Medienkritik, a German blog, pointed out that the artistic depiction and commentary bore a striking resemblance to 1930s Nazi propaganda against the Jews; it posted a cartoon from Der Stuermer depicting a spider with a Star of David on its back and dead Germans caught in its Web. That caption read Die Ausgesaugten--"those whose blood has been sucked out."

Guido Westerwelle, head of the Free Democrats, sharply criticized the cover, saying he was "against hate of foreigners" whether it came from the right or the left. An IG Metall spokesman called the cover "a good caricature," and Mr. Schroeder himself called on his ministers to investigate whether hedge funds should be more heavily regulated if they continued to insist through their investments that German companies be streamlined.

But such moves are inevitable. North Rhine-Westphalia's Social Democratic government has piled up debt in a vain attempt to save jobs in the dying coal and steel industries. In 1960 some 600,000 Germans worked in the coal mines; that number has declined by 94%, to 36,000. Each job in the industry costs the government a subsidy equivalent to some $90,000 a year. The Christian Democrats, while generally timid on economic reform in North Rhine-Westphalia, proposed to slice those subsidies in half by 2010 and also to give universities greater freedom to charge fees from students. The Social Democrats opposed both ideas.

Yesterday's election results are "a devastating defeat for Schroeder," political scientist Uwe Andersen told a German TV station. "It's as if they've been thrown out of their own living room."

Bad news for Mr. Schroeder is also good news for America. The Christian Democrats have announced that Angela Merkel, their pro-U.S. party chairman, will be their candidate for chancellor in the fall elections.

Ms. Merkel is a physicist who lived in East Germany when the Berlin Wall came down in 1989. While cautions, she is the closest thing German politics has to a Margaret Thatcher. When asked earlier this year if she detected any similarities between her ideas and the reforms that Britain's Iron Lady carried out in the 1980s, she told the Independent, a British newspaper, "My whole life was changed by reunification. I have experienced change as something good, not something to be avoided."

If German voters, tired of 12% unemployment and of being portrayed as the "sick man of Europe," have had enough this fall and throw out Mr. Schroeder, she may well get a chance to prove how much change the notoriously risk-averse German electorate can tolerate.