Germany: new government’s savage cuts by stealth
NOBODY HAS to fear an ‘ice storm’, insists Angela Merkel, re-elected German chancellor, in relation to her new government. "We are no social danger", Guido Westerwelle, her vice-chancellor, felt compelled to say of his own liberal FDP party. Despite plans to increase attacks on working people, the ruling parties are hoping not to provoke growing political instability and discontent.
On the one hand, big business got the government it desired. The new coalition of the conservative CDU/CSU and the FDP wants €19 billion-worth of tax cuts, mainly for rich people and big companies. Pensions are expected to be frozen for the next five or six years. They want to facilitate temporary job contracts and privatise the railways. Severe cuts in the health service have been announced for 2011.
On the other hand, Merkel presents herself as being close to the union leaders. Bigger attacks on social security have been postponed and the government – which has always argued for budgetary discipline in Europe – will increase its debt, accepting that it will not meet the Maastricht criteria (budgetary deficits below 3% of GDP) until 2013.
Already, tensions inside the government have become clear. CSU leader and Bavaria’s minister president, Horst Seehofer, refused to support the health plans which he and his party had agreed to days before. However, the chair of the German Chamber of Industry and Trade, Hans Heinrich Driftmann, warned that these cuts are only a beginning: "In the coming four years, we need more courage for reforms".
But the government is fearful of endangering economic recovery by implementing austerity measures too soon. There is also the fear of provoking resistance and the threat of growing political instability, including the prospect of the CDU and FDP being defeated in next May’s elections in Germany’s largest region, North Rhine-Westphalia.
The turnout in September’s election fell to a historic low of 72%. While the conservatives lost support, the vote collapsed for the SPD (Social Democratic Party) – the CDU/CSU’s coalition partner before the elections. Compared to 2005, the SPD fell 10.5%, and ten million SPD votes have been lost since 1998.
The capitalists hope that a period of opposition will enable the SPD to recover some support and hold back the rise of Die Linke (The Left), whose vote rose. The former government parties were punished despite the fact that the worst effects of the crisis – an estimated 5% drop in output in 2009 – were hidden. A massive rise in short-time working masked unemployment. Increased state spending – for example, the ‘cash for clunkers’ schemes – helped sustain the car industry.
Now Merkel speaks of a year of rising unemployment. The full force of the crisis will hit Germany in 2010, according to the chancellor. The employment bureau expects up to 4.1 million to be unemployed next year, compared with 3.3 million now. Unofficial levels are already higher: 1.4 million receive subsidies for short-time working, among them one quarter of Germany’s engineering workforce.
The economic ‘recovery’ in the second (0.4%) and third quarter (0.7%) of 2009 is not only low but weak, based on increased exports, while domestic demand is still shrinking. Rising unemployment will be a further blow to the domestic market. German banks still hold a lot of bad loans, threatening future economic development.
The fragile economic situation and a possible new downturn - for example, in the car industry - could hit the country hard. Around Stuttgart – relatively better off in recent years – 30% of the factories (mainly car industry) and their suppliers are threatened with bankruptcy, according to the metalworkers’ union.
So far, bigger struggles have been avoided with the help of the union leadership, for example with a ‘standstill’ agreement between the bosses, government and the unions in the run-up to the elections. But anger is growing. Tens of thousands of students, and in one region teachers, went on strike on 17 November. In dozens of universities the main lecture halls have been occupied, in protests inspired by the Austrian students’ movement. Anger is mounting in the factories as the bosses have implemented wage cuts, lengthened the working week and pushed through redundancies.
Resistance has been held back by fear of unemployment and by the draconian Hartz IV ‘benefits’ regime, introduced in 2004 by the SPD-led government. However, any big struggle could bring all this unrest and anger to the surface. Movements from below could develop, bypassing union structures to avoid the leadership’s attempts to block struggles. In 2004, the spontaneous, seven-day strike at Opel’s Bochum plant grabbed the attention of the whole country.
Debate has started on the 2010 wage negotiations which affect more than nine million workers. The left of the unions, while still very weak, argues for a shorter working week without loss of pay, and attempts to raise the idea of a general strike against the government’s attacks. The challenge for Die Linke is to prepare for these struggles in order to develop as a decisive force for change.
In the eyes of many of its members and supporters, the 11.9% vote received by Die Linke (8.7% in 2005) was encouraging. It was the only party in the election to campaign for a withdrawal of German troops from Afghanistan, against the Hartz IV attacks, against the increase in the retirement age (up from 65 to 67 under the CDU/CSU-SPD coalition), for taxing the rich and nationalising the banks.
But the huge potential to build Die Linke has only touched the surface, so far. Moreover, the leadership’s actions raise questions over the future of this first step towards a strong mass force. On election night, Gregor Gysi, Die Linke’s parliamentary leader, expressed his hopes that the SPD could recover and become more ‘social democratic’ again. According to Gysi, this would take votes from Die Linke but would create the option of a ‘left’ coalition. This shows the orientation of this part of the leadership towards parliamentarianism and investing all hopes on coalitions with the SPD, a party firmly committed to capitalism.
Later, Oskar Lafontaine resigned as joint parliamentary leader (while remaining co-chair of the party). This opened the way even more for the right wing and was probably an attempt to make it easier for the SPD, Lafontaine’s former party, to cooperate with Die Linke in opposition.
In Brandenburg, a new SPD-Die Linke government has been formed. As in the ‘red-red’ coalition in Berlin, Die Linke has accepted severe cuts in return for ministerial posts. At the same time, Die Linke dropped some of its election promises, like the abolition of tuition fees. The coalition plans to cut 10,000 out of 50,000 public-sector jobs by 2019. According to media reports, behind the scenes, Lafontaine tried to stop Die Linke going so far in Brandenburg. Open opposition came from Linksjugend [Solid] – the youth wing of Die Linke – in Brandenburg.
Die Linke’s federal state organisation in North Rhine-Westphalia also opposed the Brandenburg policy. Federal state elections are due here in May. With its tradition of being left-wing since the time of the WASG – the mainly western component of Die Linke, which fused with the PDS (based in the east) in 2007 – its last federal congress agreed a more left-wing election programme. Claus Ludwig, Die Linke councillor in Cologne and member of SAV (CWI Germany), commented: "The demands are for a 30-hour working week on full pay, the nationalisation of RWE and Eon [big energy companies] and of the car producer Opel, as well as the closure of military bases in North Rhine-Westphalia. Given the complaints of the capitalist politicians and media about the ‘loopy lefts’, this shows that Die Linke in North Rhine-Westphalia is on the right track".
The debate around ‘lesser evilism’ and taking part in coalitions with the SPD has been revived. SAV argues that Die Linke should aim to win majority support for socialist ideas. SAV is in favour of governments based on the struggle of the working class with a socialist programme, to break with the power of the banks and big monopolies. This is not achievable with the SPD and Greens. Die Linke must not bind itself to a government of these pro-capitalist parties. Decisions to support or oppose government measures should be taken individually, depending on whether they are in the interests of the working class. A blank cheque for these parties, in the form of coalition or a ‘toleration treaty’ (in coalition without taking ministerial positions) must be rejected.
Government politicians are already arguing among themselves about how to serve big business without provoking resistance. This presents Die Linke with opportunities to build. With the increase in class struggle over recent years, the confidence of workers has grown. The strikes of kindergarten teachers in the summer and cleaners in the autumn involved sections of the working class which were not to the forefront in the past. This indicates that the German working class is not stunned by the crisis, and massive anger is mounting.