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The Labour and Tories Dilemma in Germany

Posted at August 21, 2005 11:51 (UTC) from London, UK
The Economist: Germany's surprising economy
Copyright by The Economist.

The next general elections in Germany are due on September, 18 2005. Ok, the German Supreme Court still has to clarify if it was the right way how the German chancellor Gerhard Schröder has caused this early elections (about one year earlier than usual). However, that is another topic.

At the moment, it matters more who should we, should I vote for in September. Usually people tend to get rid of a government if it failed to bring economy boost and wealth and a good social network including a good health care within one or maximum two terms in power. For now, it is the second term for the current government, a coalition of the socialist and the green party (both may be seen as the German Labour party). The situation at the moment is a bit frustrating: Very high unemployment rate of over 11% on average, in the eastern part of Germany even higher, in some areas easily over 20%. The economy growth is at a standstill, once again.

However, then if you have a closer look, you will realize that not all is bad. Quite the opposite may be true: The reform agenda 2010 put in place by the current government a few years ago starts to show first effects. Also, more money was and still is put into research and education, Germany's only real natural resource. Furthermore, the export business is at an all-time high that makes Germany the world's largest export economy. The health care system is in a good state regarding standards, treatments etc. Of course, it is expensive to maintain this and I am sure good solutions will be brought where to cut costs without causing to much damage and lost in quality. And believe me since I live in England, I know exactly that the German health care systems is probably one of the best world-wide.

Also, if you start having a look at the international press you will see that the ongoing reforms are welcomed and considered as the right actions to revive the economy and also the increase the inland consumer demand. And if you read further, especially in the last weeks, you will also see headlines saying that the Conservative's proposed campaign program is wrong and will set back Germany even more. For example, they say increasing the VAT (value-added tax) in order to improve public finance is wrong and as a proof for that they mention Japan who did this in 1997 for the same reason and fell into a period of stagnation.

And finally, there is also the matter of how the competing parties are campaigning: The current government, especially the socialist party SPD, is outlining in several nice and smart TV spots (Tour-Germany, Too Long, Germany needs a Chancellor) the strength of and its believe in Germany. Also, the whole way how the spots are done is more motivating to continue the course of reforms to bring Germany back on the tracks and also to strength the peoples hope. The Conservatives, however, present a spot (called "The ball") that is based on frustration and fear. The entire spot is kept in a grey colour scheme supporting that bad mood. Also, they still fighting internal battles because they don't exactly know what way they want to go. For me, this all looks like that they haven't learnt their lessons yet and they are NOT ready to take over the government. It is likely that they will because of the human psychological factor of the voters. However, seen from a objective point of view it would be better to re-elect the current government to continue the reforms that are right.

P.S. Who is now so frustrated by the Conservatives' spot, have a look at this one. That's should make you laughing and hoping again.