Economic ills drive Kohl into coalition pact

Germany's vast economic problems have driven Helmut Kohl into the embrace of the opposition, opening the way to a grand coalition in all but name.

Under a deal to be thrashed out on Monday by Mr Kohl and Oskar Lafontaine, the leader of the Social Democrats, the big-gest opposition party will co-sponsor the tax reform bill, and will be consulted on this year's spending cuts. As a consequence of their pact, Mr Kohl will no longer be able to tout the tax package as his own in next year's election campaign.

In return, the Social Democrats will be able to tilt taxation in favour of their members, and gain valuable influence in government after 15 years in the political wilderness. But both sides stress that all Germans will benefit from the arrangement, because many of the urgent reforms the country needs to regain its competitiveness will be introduced in 1998.

Rocked by spiralling unemployment and internal strife, the government has abruptly ditch-ed its intransigence, and is now striking a meek tone in its dealings with the opposition. Wolfgang Schauble, Mr Kohl's deputy, yesterday gave the first clear indication that the Social Democrats' vision of social justice can be accommodated.

The SPD appears willing to accept a cut in the top rate of income tax from 53 to 39 per cent, but are holding out against changes that would hit blue-collar supporters. Mr Schauble suggested that he would be prepared to "compromise" over new taxes introduc- ed for overtime and weekend work - the opposition's main bone of contention. The Social Democrats are also firmly opposed to an increase in VAT to compensate for revenue lost in the top bracket.

The government is also looking for savings of several billion deutschmarks this year in its effort to meet the Maastricht criteria for monetary union. Though it has a comfortable enough majority in the Bundes- tag, many welfare cuts must be approved by the Social Democrat-controlled upper chamber, the Bundesrat. The opposition had promised a gridlock, and so far it has been true to its word.

The rapprochement over the next months will shift the thrust of government policy towards the left, outflanking Mr Kohl's right-wing junior coalition partners, the Free Democrats, who have been holding the Chancellor hostage to their laissez-faire agenda. Mr Kohl himself will only benefit in the long term if he succeeds in reducing unem-ployment before the elections.

However, Europe's longest-serving statesman is slowly reasserting himself. In recent polls, he has re-emerged as the Christian Democrat with the highest personal rating. All that is needed now is the announce- ment that, with the greatest reluctance, he is willing to lead his party into the next elections.

Mr Kohl had not planned to make a statement until summer, but internal unrest has forced his hand. Addressing a closed meeting of Christian Democrats earlier this week, he said: "I know my duty," he said in an emotional speech described by the party faithful as "vintage Kohl".

News
Netherlands' goalkeeper Tim Krul fails to make a save from Costa Rica's midfielder Celso Borges during a penalty shoot-out in the quarter-final between Netherlands and Costa Rica during the 2014 FIFA World Cup
newsGoalkeepers suffer from 'gambler’s fallacy' during shoot-outs
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features playground gun massacre
News
Two giraffes pictured on Garsfontein Road, Centurion, South Africa.
i100
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Travel
travel
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
arts + entsBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
i100
Arts and Entertainment
arts + ents
News
people
News
Morrissey pictured in 2013
people
News
i100
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
News
i100This Instagram photo does not prove Russian army is in Ukraine
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Hydraulic Power Pack Design Engineer

competitive: Progressive Recruitment: I recruit for contract mechanical design...

SQL DBA/ C# Developer - T-SQL, C#.Net

£45000 - £55000 per annum + Benefits: Ashdown Group: Working with an exciting ...

SCO Supervisor Electrical

competitive: Progressive Recruitment: My client based in the Midlands is looki...

Ecommerce Executive

£20000 - £24000 per annum: Ashdown Group: Ecommerce Executive Working with an...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices