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Monday, September 12, 2005


Edward Hugh

"However I find it difficult to believe Schröder could stomach being in coalition with his old nemesis Oskar Lafontaine, head of the Linkspartei."

Yes, but apart from this NE (and on which we agree) there is also the little difficulty of how it would be a coherent thing to do. Merkel may not get her magic 51% (even with the FDP) bu she will get more deputies than the SPD. In that sense she will be the moral victor, and it would be a hard thing for Schröder to put together a coalition of the 'skeptical' just to stop her in her tracks. Part of the reason for the election was that Germany had become difficult to govern, in part since the reforms Schröder was pushing were unpopular with the left in his own party, and also partly due to the CDU massive control of the upper house.

The SDP changing Chancellor candidates might resolve the former (although it would do nothing to help move Germany forwards) but it wouldn't resolve the latter. The same deadlock would continue.

"To further complicate matters Merkel's shadow finance minister, flat tax guru Paul Kirchoff, has threatened he would not turn up for work in the event of a grand coalition:"

This whole Kirchoff affair seems to have been a major disaster for Merkel. People in Germany tell me that her attempts to argue tax policy details in the televised debate is what sent her subsequent campaign into tailspin, and again many powerful people in the CDU are not happy with the way this tax issue suddenly 'emerged'.

Indeed such has been the scale of the fiasco over Kirchoff that the FT was saying yesterday:

"A week before national elections in Germany, opposition Christian Democrat leaders are attempting to sideline Paul Kirchhof, the shadow finance minister, fearing his controversial tax proposals could cost the centre-right what was seen as an assured victory a month ago." "

Obviously, as you suggest, if all this wasn't so serious it would be truly comic.

Edward Hugh

Incidentally another gaffe she seems to have committed in the German context was to copy part of Ronald Reagan's 1980 election speech at the end of her TV debate with Schröder. This allowed the SPD to go on the attack suggesting that she and Kirchoff believed in the Laffer curve. Here is the Reagan version:

"Next Tuesday all of you will go to the polls, will stand there in the polling place and make a decision."I think when you make that decision, it might be well if you would ask yourself, are you better off than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? Is there more or less unemployment in the country than there was four years ago?" "And if you answer all of those questions yes, why then, I think your choice is very obvious as to whom you will vote for. If you don't agree, if you don't think this course that we've been on for the last four years is what you would like to see us follow for the next four, then I could suggest another choice that you have."

And now here is the Merkel 2005 version:

"Dear voters, in two weeks you will make your decision about the election. Perhaps answering a few questions will help you to make your decision: Is our country better off than seven years ago (when Schroeder came to power)? Is growth higher? Is unemployment lower? Do we have less bureaucracy? Are our pensions and health care better?""If you can answer yes to all of these questions, then I think you have probably already decided who you will vote for. But if you have any doubt, if you do not want things to carry on as they are, then you have a choice."

Following this - as the FT says - CDU leaders have been attempting to sideline Kirchoff. Perhaps today's FT leader offers some indication as to why that might be:

"The economics of the flat tax are at very best dubious. A £10,000 income tax threshold combined with a single rate of 20 per cent, would leave a £50bn hole in the public finances. You have to have an awful lot of faith in supply side economics to believe it would be filled by an explosion of enterprise. The economists, though, can be left to argue among themselves. As much as some Tories see it as a panacea, the politics of a flat tax is electoral suicide.

Timmer ~ Righting America

I am very optimistic and hopeful that "Angie" will emerge victorious in this election. Germany is a wonderful country, and deserves much better than Schroeder has given her.

As for my own country, I would very much like to see Germany and the U.S. mend fences and revive their friendship - I believe that Ms. Merkel is just the one to do that.

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