The hung parliament that emerged from the German federal elections is a serious setback for the forces seeking to impose yet more free market “reforms” on us all.
Angela Merkel, leader of the conservative Christian Democratic Union (CDU), was built up by the British media as another Margaret Thatcher who would shake up a stultified and stagnant Germany. The BBC effectively declared her elected weeks ago.
Downing Street didn’t bother to conceal Tony Blair’s hope that Merkel would displace Gerhard Schröder as German chancellor — despite the fact that Schröder’s Social Democrats (SPD) are the counterpart of the British Labour Party.
Both German and international big business were longing for a CDU victory.
When SPD chief Franz Müntefering announced early elections in May Merkel was 21 points ahead in the opinion polls. Yet the CDU’s share in last Sunday’s elections of 35 percent was worse than its score last time, in 2002, and only just ahead of the SPD at 34.3 percent.
According to the Financial Times, “The confused result is bound to cause consternation in London, which had hoped a solid Merkel majority would give a push for economic reform in Europe, and in Washington, which had banked on a change of government to help mend the damaged relationship with Berlin.”
Behind the decision to hold early elections was the anger provoked by the ruling Red-Green coalition’s Agenda 2010 of neo-liberal “reforms”. The Hartz IV programme slashing unemployment benefits provoked mass protests in eastern Germany a year ago.
The final straw came when huge numbers of working class voters deserted the SPD in elections in the key state of North Rhine Westphalia. Schröder and Münterfering gambled on clawing back many of these votes during the election campaign. To some degree, this strategy worked.
It was greatly helped by Merkel’s right wing ineptitude. She nominated a tax lawyer Paul Kirchhof as finance minister.
An exponent of free-market voodoo economics, Kirchhof unveiled plans for a 25 percent “flat” tax. Flat taxes are currently flavour of the month among the right internationally, since they would massively cut taxes for the rich.
Schröder ruthlessly exploited Kirchhof’s plans to portray Merkel as about to dismantle the welfare state. Meanwhile, Münterfering tacked left, denouncing financial speculators as “locusts” and posing next to a bust of Karl Marx.
These efforts were aimed at stemming a haemorrhage of votes leftwards. Last year, trade unionists broke away from the SPD to form the Election Alternative for Social Justice (WASG).
In the past few months the WASG has come together with the Party of Democratic Socialism (PDS) in the Left Party. The PDS, the rump of the old Stalinist ruling party in East Germany, is now a moderately reformist party.
The new Left Party is headed by one of Germany’s leading politicians, Oskar Lafontaine. Lafontaine, former chairman of the SPD, resigned as finance minister during the early months of the Red-Green coalition when his plans for redistribution from rich to poor were blocked by Schröder.
The Left Party won 8.7 percent on Sunday, coming just ahead of the Greens who have been in government for the last seven years.
The result is one more advance for the radical left in Europe. It follows the performances in recent elections by Respect in Britain, the Left Bloc in Portugal, and the Red-Green Alliance in Denmark, and the defeat of the European constitution in the French and Dutch referendums.
Behind the rise of this new left is a rebellion against the neo-liberal consensus that reigns at the top of European society. The election photo-finish has set the scene for intense manoeuvring over the coalition needed to form a government that will ram through more attacks on the welfare state. Left of centre parties — the SPD, Greens, and Left — actually have a majority in the new parliament.
Interestingly, however, both Schröder and Merkel have ruled out talking to the Left Party. It should take this as a compliment.