FIVE WEEKS before Germany elects its next chancellor, the latest twist in the campaign is not anything the candidates have said but concerns a document by a junior politician that should never have been published.
A policy paper by Karl-Theodor zu Guttenberg, the conservative economics minister, was leaked by his Social Democratic opponents at the weekend and sparked a surprise dispute – and exposed the flaw at the centre of the electoral campaign.
The “Guttenberg paper”, described by Frank-Walter Steinmeier, the SPD candidate, as “terrifying”, lists the measures the minister thinks are needed to put the German economy back on its feet, including corporate tax cuts, abolition of sectoral minimum wages and reforms to make it easier to fire employees.
Unfortunately for Mr Guttenberg, the measures – dismissed by a CDU spokesman as “obsolete” and “an old collection of stuff” – are not only the opposite of vote-winners; they are at odds with the feelgood manifesto of his political boss, chancellor Angela Merkel.
The spat has awakened bad memories for Ms Merkel’s CDU. Four years ago she conducted a daring experiment by promising to raise value-added tax by two points and dismantle Germany’s generous welfare state to fix the deficit and make the economy more competitive.
This proved a near-fatal mistake. The unpalatable manifesto scared away voters and the CDU, which had enjoyed a double-digit lead over the SPD early in the campaign, finished one point ahead, forcing Ms Merkel to form her grand coalition.
Having resolved not to make the same mistake twice, Ms Merkel has considerably sweetened her electoral offering this time round. Her CDU’s 63-page manifesto promises income tax cuts that have little chance of becoming reality in the next parliament.
Not only does the parlous state of German public finances leave little margin for tax cuts but the tough fiscal rules the grand coalition has enshrined in the constitution amount to a ban on fiscal deficits as of 2016 and will force the next government to cut spending or raise revenues by €10 billion a year.
But the Guttenberg paper doesn’t just cast an unflattering light on the CDU’s public platform. It also reveals similar deficits in that of its opponents. The competing offerings have one thing in common: none of them could be implemented in real life.
In his “Deutschland plan”, Mr Steinmeier claims a government under his leadership could create four million jobs in the next decade, eradicating unemployment. These, aides say, are not wild promises but “ambitious goals”.
The smaller the party, the bigger the pledges. The Free Democrats’ planned tax cuts are even larger than the CDU’s, while the radical Left party calls for a €200 billion fiscal package, financed by tax rises and new levies, and the creation of two million jobs. Cynics may dismiss such promises as the essence of electioneering. But in Germany’s political landscape, the incentives for such extravagance are high.
With five parties represented in parliament compared with three a generation ago, it is becoming hugely difficult for traditional allies (CDU-FDP and SPD-Greens) to muster enough votes for an outright majority.
As grand coalitions and three-way alliances become more likely, the parties grow more inclined to make extravagant promises, knowing their manifestos will end up in the bin as soon as they sit down with their future ruling partners to hammer out a coalition agreement. – (Financial Times Service Copyright 2009)