H/T Just One Minute
The New York Times has an interesting article about a speech by Gerhard Schroeder to the German Bundestag on Thursday, where he called for a reduction in the corporate tax rate. It seems that even those Third-Way-ers in europe realize that lower taxes encourage investment and economic growth. I'm not sure whether Gerhard would ever actually follow through with a taxcut, but I think it shows the economic realities of the economic/political situation in Germany when the Chancellor (from the SPD - Social(ist) Democratic Party) suggest this in a speech. He knows that the center-right CDU could cause some problems based on Germany's economic performance under Schroeder.
Now, here are some key points from the article.
While Mr. Schröder's speech was geared toward Germany's economic problems, it was seen here as an important political gesture, aimed at trying to forge an informal alliance with the main conservative opposition parties in a search for solutions to the country's stubborn economic woes. Unemployment, the worst of them, is now at levels unseen since the 1930's. The corporate tax reduction has long been favored by the opposition, which last week proposed what has come to be called a jobs summit meeting to develop common solutions to Germany's dismal economic performance.Hmmm... 1930s... what happened then... hmmm... Yeah, I don't think anyone wants to see continued high unemployment in Germany... something about idle hands. Seriously, though - If your country has unemployment that it hasn't seen since the GREAT DEPRESSION and the last time your country saw that level of unemployment, you turned to a racist form of fascism, perhaps you should be a little concerned. And the Left in the US bitches about our unemployment rate... which is running under 6%... puhleease.
In a first step toward that aim, Mr. Schröder, after his speech on Thursday, met with Germany's two main conservative leaders, Angela Merkel of the Christian Democratic Union and Edmund Stoiber, chairman the Christian Democrats' sister party in Bavaria, the Christian Social Union. Mrs. Merkel is Mr. Schröder's most likely opponent in the election for chancellor next year.
The two parties will square off in elections in North Rhine-Westphalia, Germany's most populous and most heavily industrialized state, in May. Polls give the Christian Democrats a good chance of wresting control of the state from the Social Democratic Party, which has governed there for the last 39 years. If that were to happen, it would be seen in Germany as a strong augury of the likely outcome of the federal elections next year.Now, North Rhine-Westphalia contains the manufacturing hub of Germany, which is referred to as the Ruhrgebiet (or Ruhr area) because it traces the Ruhr river. It ecompasses Duisburg, Essen, Dusseldorf, Cologne, and Bonn, as shown in this map (Western side of Germany).
"We are in a really difficult situation with the jobless figures," Mr. Schröder said Thursday morning in his speech. "Unemployment is the top problem in our nation."
"We need to do something in the short term," he said in what seemed a tacit admission that the legislation he has arduously pushed through Parliament - known as Agenda 2010 - has yet to bring significant results, especially in employment.
Recently released figures show the country's jobless numbers rising above five million for the first time, or 12.6 percent of the work force. In some places, especially in the former East Germany but also in industrial rust belt districts in the former West, the unemployment rate is above 25 percent.
Mr. Schröder, largely because of his perceived failure to reduce unemployment, has also faced a slow erosion of public support. A new poll indicates that if elections were held today, the Christian Democrats would win 41 percent of the vote and the governing Social Democrats 32 percent.
When traveling from one city to the other, you never get the sense that you've left a city... you leave an urban area, then start to see suburbs for miles on end, then another urban area. The possibility of the CDU winning the next state election would be like a Republican sweep in California... and New York. So, I think Gerhard's days in office are numbered.
If the CDU/CSU does take power in the federal/state elections, it'll be intersting to see how this effects the EU. From the US perspective, the Germans under pro-business/pro-free-market government would be a concern... although we could probably count on a CDU government more on foreign policy issues than Schroeder & the SPD.
Digger's Realm is also talking about this subject
and here's a BBC report on the subject.
ARC: St Wendeler