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".

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Britons buy more than 30 million handsets each year, keeping them for an average of 18 months
tech
Arts and Entertainment
Alloysious Massaquoi, 'G' Hastings and Kayus Bankole of Young Fathers are the surprise winners of this year's Mercury Music Prize
musicThe surprise winners of the Mercury Prize – and a very brief acceptance speech
Arts and Entertainment
TV Presenters Ant McPartlin and Dec Donnelly. Winners of the 'Entertainment Programme' award for 'Ant and Dec's Saturday Night Takeaway'
musicAnt and Dec confirmed as hosts of next year's Brit Awards
Arts and Entertainment
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
film
News
video
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

Primary Teachers Required in King's Lynn

Negotiable: Randstad Education Cambridge: Primary Teachers needed in King's Ly...

Primary Teachers needed in Ely

Negotiable: Randstad Education Cambridge: Primary Teacher needed in the Ely ar...

Teaching Assistant to work with Autistic students

£60 - £65 per day: Randstad Education Leicester: Randstad Education Leicester ...

KS2 Teacher

Negotiable: Randstad Education Cambridge: KS2 Teacher needed in Peterborough a...

Day In a Page

Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes
Independent writers remember their Saturday jobs:

Independent writers remember their Saturday jobs

"I have never regarded anything I have done in "the media" as a proper job"
Lyricist Richard Thomas shares his 11-step recipe for creating a hit West End musical

11-step recipe for creating a West End hit

Richard Thomas, the lyricist behind the Jerry Springer and Anna Nicole Smith operas, explains how Bob Dylan, 'Breaking Bad' and even Noam Chomsky inspired his songbook for the new musical 'Made in Dagenham'
Tonke Dragt's The Letter for the King has finally been translated into English ... 50 years on

Buried treasure: The Letter for the King

The coming-of-age tale about a boy and his mission to save a mythical kingdom has sold a million copies since it was written by an eccentric Dutchwoman in 1962. Yet until last year, no one had read it in English
Can instilling a sense of entrepreneurship in pupils have a positive effect on their learning?

The school that means business

Richard Garner heads to Lancashire, where developing the 'dragons' of the future is also helping one community academy to achieve its educational goals
10 best tablets

The world in your pocket: 10 best tablets

They’re thin, they’re light, you can use them for work on the move or keeping entertained
Lutz Pfannenstiel: The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents

Lutz Pfannenstiel interview

The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents
Pete Jenson: Popular Jürgen Klopp can reignite Borussia Dortmund’s season with visit to Bayern Munich

Pete Jenson's a Different League

Popular Klopp can reignite Dortmund’s season with visit to Bayern
John Cantlie video proves that Isis expects victory in Kobani

Cantlie video proves that Isis expects victory in Kobani

The use of the British hostage demonstrates once again the militants' skill and originality in conducting a propaganda war, says Patrick Cockburn
The killer instinct: The man who helps students spot potential murderers

The killer instinct

Phil Chalmers travels the US warning students how to spot possible future murderers, but can his contentious methods really stop the bloodshed?
Clothing the gap: A new exhibition celebrates women who stood apart from the fashion herd

Clothing the gap

A new exhibition celebrates women who stood apart from the fashion herd
Fall of the Berlin Wall: Goodbye to all that - the lost world beyond the Iron Curtain

The Fall of the Berlin Wall

Goodbye to all that - the lost world beyond the Iron Curtain