New voices: Star of German elite reveals symptoms of `national disease'

Her book reads like a revolutionary manifesto, and she is out to shake Germany's establishment to its foundations. The country cannot assume its rightful position in the world, argues a glamorous academic and financier, unless the status quo is overturned. Imre Karacs meets a woman who is taking her battle into the hidden corridors of power.

Six million people out of work, capital in full flight, political paralysis. These are the symptoms of the "German disease", for which the country's leaders have yet to find a cure. Margarita Mathiopoulos, banker and academic, believes that is not surprising, since they are the cause of the malaise.

Germany, she argues in her new book The Closed Society and Its Friends, is run by an ageing clique which will not allow change of any kind. "Friends of this closed society can be found in all political parties, in the employers' associations, the trade unions, in many other of Germany's exceedingly numerous pressure groups and in the management of a large number of German corporations."

These people are the product of "state socialism", stretching "from Bismarck to Kohl". They shun new ideas, abhor the free market and regard globalisation - rightly - as the greatest threat to their existence.

"These groups' insistence on preserving traditional positions has led to the social and economic petrification of Germany." Their rallying cry is "No experiments". "At all levels of economic, political or academic life the `No experiments' mentality reigns supreme." The whole country has "degenerated" into a federal institution, dependent on state hand- outs. "The closed society is pumping huge public subsidies into entire branches of industry that would otherwise barely survive," she writes. Professor Mathiopoulos, a German of Greek parentage, maintains this kind of invective for 450 pages. Summing up her book to an audience of US businessmen this week, she lambasted her country's "mentality, political culture" and lack of openness to the outside world.

"Let me be clear: the Federal Republic - with its sea of warning signs and rule books - is suffering from bureaucratic and institutional constipation." Decline has reached "threatening proportions", crippling the economy, thwarting research and education, and turning the country into a "welfare dictatorship".

So withering was her attack, that her embarrassed foreign audience felt compelled to jump to Germany's defence, but the Germans sitting in the front row leapt out of their seats with joy. "Why don't you stand for the Bundestag?" asked one.

But Professor Mathiopoulos does not need a political platform. Apart from her various prestigious jobs in the ivory tower, she is vice-president of a bank and has splendid personal connections to the world she seems hell-bent on destroying. Aged 40, she was once a protege of Willy Brandt, the former chancellor. Only her then tender age and, allegedly, her Greek blood, prevented her landing a job as the Social Democrat party's spokeswoman.

That history would seem to slot her into the left of the political arena, as would her remark that "social solidarity is being trampled under foot" in Germany. But she devotes much of the book to attacking trade unions and the left wing of the Social Democrats for being "stuck in the 19th century".

She is a passionate admirer of the US-style of capitalism and says the German model has outlived its usefulness. And some of the audience listening to her thesis might have been surprised to learn that she is married to a Christian Democrat MP, whose "No experiments" government has been in power for 15 years.

Certainly, the book is not the work of an outsider. Suffice to say that it was launched last month by Karl Otto Pohl, retired president of the Bundesbank.

Herein lies the importance of what Professor Mathiopoulos is saying. The book captures a debate raging within the elite, some of whom are the "closed society" and some who are open to change. The battle lines are being drawn between youngish modernisers and the old guard.

"Survival in the era of globalisation is not a question of left and right," she says. Only a reinvigorated political leadership can get the country moving again, and that is just as likely to come from the SPD wing led by Gerhard Schroder, as from the Junge Wilde - "Young Wild Ones", the rebels of Helmut Kohl's party, to whom Professor Mathiopoulos's husband belongs. The author herself is convinced that changes will come. "I don't think Germany will let itself fall into the ranks of second or third-rate countries," she declares. "I believe that something will happen after the next elections."