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Germany: Without Compromises, Kohl's Coalition Could Crumble

  • Roland Eggleston



Munich, 9 June 1997 (RFE/RL) -- German politics is entering a tense week with some analysts warning that the coalition Government led by Chancellor Helmut Kohl could crumble unless all sides accept compromises.

The coalition -- consisting of the Christian Democrats (CDU), led by Kohl, a sister party, the Christian Social Union (CSU) and the Free Democrats (FDP) -- has been in power for nearly 15 years, since 1982. It has been split for months on the domestic economic crisis in Germany and particularly on how to deal with the record level of unemployment, which remains above four million.

There are also important differences within the Government on the timetable for developing a common currency within the European Union. Until recently the true depths of the disagreements have been concealed but now they have come into the open with headline reports in newspapers, television and radio.

The main issue is whether the FDP will leave the coalition because of its fundamental differences with Finance Minister Theo Waigel over the budget. Waigel wants to raise taxes to help make-up a shortfall of at least 11,000 million dollars in the budget. The FDP rejects higher taxes.

The Government has only a ten-seat majority inn the Federal Parliament and an FDP walk-out would bring it down and force new elections more than a year early.

Kohl also has problems with his sister party, the CSU, over the Chancellor's insistence that the proposed European currency, the EURO, be introduced in January 1999 despite the financial and economic problems created in Germany and several countries by that timetable.

Kohl has committed himself personally to the timetable and said at the weekend that he would "stake his political existence" on introducing the Euro on time. But senior CSU leaders said publicly in Munich last week that establishing financial stability in Germany and in Europe was more important than keeping to the timetable.

At the weekend a newspaper which is considered to have good contacts within the Kohl government, "Welt am Sonntag" reported that the coalition was in deep trouble and that Kohl was having to struggle to keep it together. It quoted an internal memo from Kohl's office as saying a break-up of the coalition was possible.

A Government spokesman described the report as a fabrication. But today another newspaper with equally close ties to Kohl personally and to his Government, the "Frankfurter Allgemeine Zeitung" had a front-page headline reading "Growing Doubt on the Future of the Coalition."

Munich's "Suddeutsche Zeitung" gave its front page headline to a statement by finance minister Waigel that the "moment of truth" had come for the 15-year-old coalition and its fate would be decided when he presents his Budget at the beginning of next month. The newspaper quoted him as saying: "we face a crucial four weeks" and warned the FDP not to campaign against his proposals.

Waigel said he wanted the present coalition to continue despite the problems with the FDP because early elections were not to be recommended at this time. The national elections are not scheduled until the end of next year when the Government hopes the financial and economic situation will have improved.

The FDP chairman, Otto Lambsdorff, responded to Waigel's criticisms by saying he was personally convinced that the coalition would not collapse but repeated that his party would not agree to tax increases. "Higher taxes would be irresponsible because they would just lead to higher unemployment," he told a television interviewer.

The Finance Minister says he has met the FDP half way by promising not to raise taxes this year but said he could not rule out increases next year. The FDP says this is not a solution. It wants cuts in Government spending which will rule out higher taxes next year as well.

It's no secret in Germany that the FDP hopes its refusal to accept higher taxes will win favor with the voters and guarantee its return to Parliament in the next national elections. The Party has been struggling for years. It is no longer represented in most provincial parliaments and was considered lucky to get back into the federal parliament at the last elections. But even its opponents in the Government acknowledge that it speaks for most voters in opposing higher taxes. The question is how else can the Government raise the money to fill that 11 billion hole in the Budget.

Helmut Kohl and his finance minister face the same problem in their efforts to introduce the Euro currency in January 1999. Ironically it was Kohl's Government which insisted on enforcing strict financial criteria for countries wanting to join the new currency union in the first round. Now Germany itself is struggling to meet the criteria.

Kohl rejects the suggestions from the CSU and other sources that the introduction of the Euro could be delayed until economic conditions improve. "Those who delay, delay for ever", he said in a speech at the weekend. "Europe will be missing an opportunity which may not come again for years."

But several of the initiatives taken by Kohl and his finance minister have fallen flat or run into fierce international criticism, including an ill-timed proposal to revalue upward German's gold reserves.

Some analysts in Germany believe that France may come to the rescue of the Kohl government. The new French socialist Government is believed to want to change the criteria and some other conditions for the introduction of the Euro currency. These analysts argue that if this forces a delay in introducing the currency it would provide Kohl and his Government with a graceful retreat and will help the Chancellor to resolve the coalition problems within the ruling coalition.
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