Leading article: Mr Schröder has failed to reform Germany but still deserves to be re-elected

Tuesday 28 January 2014 04:30

The German Chancellor, Gerhard Schröder, has been a disappointment in his first term. He was elected four years ago on a Blairish promise to manage the changes needed to modernise the German economy, but he was never clear about what those changes were and who the losers would be.

As a result, the losers over the past four years have been Germany's four million unemployed, shamefully neglected by a government proclaiming social justice. What was needed was the blend of liberal economics with a social conscience, a formula Mr Schröder claimed to share with Tony Blair.

What Germany got, however, was a policy of no change, of sitting pat on the corporatist, inflexible consensus. That has seen a further slide in the country's relative economic performance. A quarter-century ago, the German model was held up as everything the British one was not and should be. Now, in the inevitable cycle of success, complacency, decline and renewal, the powerhouse of the European economy has become flabby while the British model seems the more dynamic, and the more plausible model for a successful European Union.

Even the historic achievement of Mr Schröder's predecessor, Helmut Kohl, of integrating East Germany into the western economy without undue social tension has been allowed to stagnate. The sense of insecurity in the east is in marked contrast to the recent economic progress made by Poland, Hungary and the Czech Republic – largely through the pursuit of free-market policies.

Yet Mr Schröder, a skilled campaigner, has managed to pull back to level pegging in the opinion polls with two days to go. He responded quickly to last month's floods, and struck a popular pose on Iraq against US war-mongering. But his greatest asset has been the failure of his Christian Democrat opponent, Edmund Stoiber, to propose an alternative policy on the economy. Mr Stoiber has spoken of the "shame" of the government's record on unemployment, yet has no programme of labour market reforms designed to end it.

Worse, Mr Stoiber has stooped to some deplorable language on immigration. Last week he spoke of people's fears of the consequences of expanding the EU to the east: "Four hundred million people are threatening to come our way. We must prepare ourselves." He has also deployed some disreputable innuendo linking immigration with both unemployment and terrorism.

Mr Schröder, by contrast, and to his credit, has resisted the temptation to pander to the anxieties stoked by the extreme right. Tony Blair and his Home Secretary David Blunkett, who this week said asylum-seekers from Kosovo and Afghanistan should "get back home", could learn some lessons from him in this respect.

It is also worth noting that the Greens have matured as Mr Schröder's coalition partners. In one respect Germany continues to be ahead of this country, and that is in moving a modern industrialised economy towards a sustainable future.

We therefore come to the reluctant conclusion that Mr Schröder would be a better Chancellor than Mr Stoiber. We only hope that, if re-elected, he will be a better Chancellor than he was in his first term. Mr Blair should not have intervened in another country's general election campaign by defending Mr Schröder to the left-leaning Berlin newspaper Tagesspiegel. However, the continuation of the red-green coalition is in the better interest of Germany and Europe as a whole.

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