Posted on 07/04/2005 8:25:10 PM PDT by Righty_McRight
Germany's ruling party yesterday set the stage for a polarised electoral campaign as it endorsed a manifesto targeted mainly at leftwing critics of its recent economic reforms.
The Social Democratic party, in its document, seeks to preserve Germany's current social welfare and labour regulations, and avoids spelling out reforms that economists believe are needed but which the leftwing core of the party fears.
"All that is new can only succeed if it is grounded in the tried and tested," it claims. "We want to renovate our country, but we do not want any other country."
The platform, entitled "Confidence in Germany", aims to capitalise on fears that a Christian Democratic-led government would enact radical changes to the generous welfare state. It also attempts to fend off a challenge on its left flank by an alliance of neo-Communists and SPD dissidents.
While the centre-right CDU has kept a tight lid on its manifesto, to be unveiled next Monday, it is expected to campaign for reforms of the social security system, a more flexible labour market, and further liberalisation of the economy.
By contrast, the steps an SPD-led government would not adopt outnumber its reform proposals. They range from the introduction of student fees and a rise in retirement age to the abolition of corporate co-determination, a system that gives trade unions a strong say in management decisions.
Likewise, Chancellor Gerhard Schröder's party said it would leave the cash-strapped healthcare and nursing insurance schemes untouched. It would seek to raise new funds by scrapping the opt-out that high earners, civil servants, the self-employed and members of parliament enjoy.
"This is a very disappointing bit," said Dieter Breuninger, senior economist at Deutsche Bank. "It will certainly not solve any of the long-term funding problems of the redistributive healthcare system."
In spite of Germany's need to reduce its budget deficit, the SPD said it would neither raise value added tax nor cut public sector spending.
Instead, its programme includes between €14bn ($17bn, £9bn) and €16bn in demand boosting measures.
These would comprise a new tax break for households doing home repair work; a new social benefit for parents who leave work for a year to look after their children; and public investments in infrastructure, public buildings and the former East Germany.
If returned to power, the SPD said it would raise pressure on profit-making companies to lift wages and would support the introduction of sector-specific minimum wages, marking a break with nearly a decade of restrained wage developments in the country.
In perhaps its most ideological proposal, the party said it would levy a 3 per cent income tax surcharge on anyone earning more than €250,000 a year (€500,000 for couples).
By contrast, the CDU is considering cutting the top rate of income tax from 42 to 39 per cent.
"A pretty disappointing document given the reform need," said Dirk Schumacher, economist at Goldman Sachs, of the SPD agenda. "The hopes now rest on the conservatives after the SPD has exhausted itself."
In perhaps its most ideological proposal, the party said it would levy a 3 per cent income tax surcharge on anyone earning more than €250,000 a year (€500,000 for couples).
By contrast, the CDU is considering cutting the top rate of income tax from 42 to 39 per cent.
Boy, tough choice here. Who to vote for..who to vote for...
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
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