GERMAN ELECTIONS: Workers deliver a blow to free market ‘reforms’

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AFTER Sunday’s General Election, Germany did not have a Chancellor, or a government yesterday. This plunged the country into a huge economic and political crisis, with reverberations throughout the European Union (EU).

Weeks of coalition wrangling are expected, involving Angela Merkel of the conservative Christian Democratic Union (CDU), Gerhard Schroeder of the Social Democratic Party (SPD) and the smaller political parties.

Merkel’s promise to bring in accelerated free market ‘reforms’ won her the enthusiastic backing of German bankers, monopolists and Frankfurt stockbrokers.

Britain’s Prime Minister Tony Blair clearly considered he had found a soulmate in Merkel for the battle within the EU for privatisation, deregulation and ‘free market reforms’. Breaking with both diplomatic protocol and the niceties of the Socialist International, he visited Merkel before seeing Schroeder, in Berlin, this year.

When campaigning began just over a month ago, opinion polls gave Merkel a 23 per cent lead over the incumbent Chancellor Schroeder and the SPD.

Germany’s election result has confounded the pollsters, dismayed big business, disappointed Blair and his allies in the EU and delivered a powerful blow to those with ambitions to impose ‘reforms’.

With a 78 per cent turnout, the CDU got 35.2 per cent of the vote (225 seats) to the SDP’s 34.3 per cent (222). The CDU’s traditional allies in the Free Democratic Party (FDP) got 9.8 per cent (61 seats). The Greens, who have been in coalition with the SPD in Schroeder’s government, got 8.1 per cent (51 seats).

Both Merkel and Schroeder were shocked by the fact that the newly-formed Left Party, which campaigned for jobs and job security and opposed the attacks on the ‘social staat’ (German welfare state), got 8.7 per cent (54 seats). The Left Party was formed six months ago by Oskar Lafontaine, Schroeder’s former rival in the SPD, and Gregor Gysi, the leader of the Party of Democratic Socialism (PDS), formed from the East German Stalinist SED in 1990.

The CDU has less seats in this parliament than in the last one (225 as against 247), which is its worst general election result ever.

The German capitalist class realises the working class has delivered a blow to its plans to ‘reform’ the labour market and the ‘social staat’. When the Frankfurt stock exchange opened yesterday morning the Dax Index fell by two per cent and the euro went down dramatically.

The working class knows it fought Schroeder’s government to a standstill over its ‘reforms’. This is what forced him to call the general election a year early and sent his opinion poll rating plummeting.

It is also conscious that, under the SPD government, unemployment reached a post-war high of 5.2m (12 per cent) earlier this year.

Workers want jobs, but not at the price which Schroeder is demanding they pay under his Agenda 2010 ‘reform’ programme. Under the SPD government’s ‘reforms’ it is easier for the employers to hire and fire workers, unemployment and welfare benefits have been cut and merged under the Hartz IV reforms and there are cheap-labour schemes for the unemployed known as ‘one-euro jobs’.

Merkel promised the bosses that she would speed up the Schroeder’s ‘reforms’; introduce a 25-per-cent, flat-rate tax, providing a bonanza for the rich; and increase VAT from 16 to 18 per cent, hitting the poorest people.

This alerted workers, and millions voted for the Left Party, or, out of traditional class loyalty, voted for the SPD. Workers want to defend their post-war gains. They do not want Agenda 2010 and Hartz IV. More than that, they do not want the more draconian ‘reforms’ proposed by Merkel’s CDU.

The powerful German working class shaped the election result and has hit the ruling class, just as French and Dutch workers struck a blow against the bankers’ and monopolists’ EU earlier this year.

Whatever coalition government is put together, it will be a ‘lame duck’ administration with no mandate to smash up German workers’ employment rights and the ‘social staat’.

Today, what is clearly required is that workers build a new revolutionary party in Germany, a section of the Trotskyist International Committee of the Fourth International, to organise to defend class gains and fight for a socialist future of full employment and a comprehensive welfare state.

This will require a struggle to clear the Schroeder gang out of the workers’ movement and provide a socialist alternative to the Stalinist and left-reformist opportunists of the Left Party.