Greens, Iraq set to give Schroder grey hairs

A winter of discontent at home and abroad lies ahead for Germany's re-elected government after a closely fought election, writes…

A winter of discontent at home and abroad lies ahead for Germany's re-elected government after a closely fought election, writes Derek Scally, in Berlin

Gerhard Schröder once went to court to prove that he doesn't colour his chestnut-brown mop of hair. But Germany's re-elected Chancellor could be forgiven in the coming days if some grey hairs sprouted after the heart-stopping general election finale on Sunday night.

Mr Schröder is determined to get right back to work with his Green Party coalition partners, whose strong election performance made up for his own party's losses to guarantee a four-seat majority.

As soon as the Chancellor gets back to work, however, an unenviable list of problems awaits him.

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The world is waiting to see how Berlin will bridge the ever-widening gap that has opened with Washington over Iraq.

At home, Germany faces a tough winter, with neither the economy nor the employment market likely to recover before the spring.

The only immediate consolation for Mr Schröder is that his re-election has put on hold Europe's lurch to the right, at least for the moment.

But that doesn't appear to have been the motivation of German voters on Sunday.

Poll analysis shows the Social Democrats (SPD) won the election in Germany's eastern states, where voters, grateful for Mr Schröder's swift action on flood relief, voted for the SPD at the expense of the reformed communists.

The exit of the Party of Democratic Socialism (PDS) from parliament has brought Germany "one step closer to internal unity", according to one political commentator last night.

Mr Edmund Stoiber, the conservative challenger from the Christian Democratic Union, tried to paint an upbeat picture yesterday after his election defeat.

He portrayed the result as proof that the CDU has cast off the shadow of Helmut Kohl and the fund-raising scandal and is once again ready for government. But the election results don't bear out his optimism.

The CDU remains behind the SPD as the second-largest political force in the Bundestag.

The general election result was an improvement on 1998 but is nearly three percentage points behind Helmut Kohl's last electoral victory in 1994.

Poll gains on Sunday show that the CDU has won back some floating voters it lost to the SPD in 1998, but the party has some way to go to regain its 1980s strength.

Mr Stoiber claimed yesterday that the new government's four-seat majority will be its undoing: however, tight majorities are a regular feature of German politics.

The last Kohl government ran to term on an identical majority, while the two previous Social Democrat chancellors, Willy Brandt and Helmut Schmidt, led governments with five- and four-seat majorities respectively.

The Green Party was the real winner of the election, capitalising on voters' concerns about environmental issues and their fears of a grand coalition between SPD and CDU.

Green Party leaders were anxious to appear modest in victory yesterday, but announced the continuation of what they call their "politics of ecology and renewal".

They are in a strong position to keep the unpopular ecological tax and the phase-out of nuclear power in place. They are also likely to win more seats in the cabinet to supplement the Green foreign, environment and agriculture ministers.

Ms Renate Künast, the Green agriculture minister, will continue her push for increased organic food production. She is also likely to fight hard on the reform of the Common Agricultural Policy, putting her at odds with Paris.

The French government made no secret of its wish to see Mr Stoiber win.

That would have given a new impetus to the Franco-German axis, not to mention welcome support for France on agricultural subsidies.

For one prominent Green, Mr Joschka Fischer, the coming coalition negotiations will be a walk in the park compared to the task that awaits his return to the Foreign Ministry.

He faces the task of salvaging what the White House has called Berlin's "poisoned" relationship with Washington over Iraq.

This will be made difficult considering that Berlin appears to have little new to offer.

Mr Schröder confirmed yesterday that there was no room at the cabinet table for his former justice minister, Ms Herta Däubler-Gmelin, who allegedly compared the war tactics of President Bush with those of Adolf Hitler.

Her comments marked a new low in the US-German relationship that has been in free fall for weeks.

With the election behind him, Mr Schröder is certain to tone down his thundering campaign-trail dismissals of "military misadventures".

But he made it clear yesterday that his basic position hasn't changed, nor has that of Mr Fischer. That will make a common EU policy more difficult to reach.

Mr Schröder reiterated yesterday that Germany is interested only in supporting UN weapons inspectors and will not have any part in a strike on Iraq, even with a UN mandate.

One way out of the diplomatic mess could be to face up to what will become clear anyway once the election dust has settled: that Berlin's position on Iraq may soon be dictated more by financial than moral questions.

The German Defence Ministry's resources are already stretched to the limit by its peacekeeping activities, and Germany cannot afford to participate in a strike against Iraq.

Paying for a war would be one headache too many for Mr Hans Eichel, who faces an economic headache if, as expected, he returns as finance minister.

Sluggish growth and stubbornly high unemployment will contribute to an expected budget deficit of €15 billion this year.

Already Mr Eichel is preparing huge public spending cuts, making it difficult to implement the proposals from an employment commission to get Germany's four million unemployed back to work.

It's also an open secret that Berlin will breach the 3 per cent deficit ceiling of the EU stability pact in coming months. That will place strain on Berlin's relationship with its eurozone bedfellows.

But there are unlikely to be any dramatic changes in Berlin's relationship with Brussels, although European Commission President, Mr Romano Prodi, would undoubtedly welcome a break from Mr Schröder's occasional side-swipes that Brussels doesn't understand Germany.

At home and abroad, a winter of discontent lies ahead for Germany's re-elected government.

Derek Scally reports from Berlin on German affairs for The Irish Times