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GERMANY’S Social Democrats, facing almost certain defeat in regional elections next week, are calling for the return of Oskar Lafontaine, the left-wing firebrand once dubbed the “most dangerous man in Europe”. For some of his former colleagues, Oskar Lafontaine is beginning to look like a saviour If Gerhard Schröder’s former Finance Minister returns to centre stage it will be one of the most remarkable comebacks since the war; for three years he has been pronounced politically dead. “We should no longer shut the door on him,” Ludwig Stiegler, deputy leader of the Social Democratic parliamentary group, said. “He is welcome...

Backing for Schröder's party slides to historic low By Haig Simonian in Berlin Published: January 25 2003 4:00 Support for Germany's ruling Social Democrats dropped to an historic low yesterday in a clear signal to chancellor Gerhard Schröder of popular frustration at the government's broken election promises and perceived drift. With two important regional elections next month, the German leader had tried to use opposition to war against Iraq at a rally this week to boost his flagging support. But his ploy, which worked so well in the German elections last September, has failed to impress a public growing impatient...

Germany edged closer to costly public sector strikes in the new year on Thursday following the collapse of negotiations over wages for 2.9m workers. The services industry union Verdi broke off talks early yesterday after rejecting an employers' offer of staggered wage increases of 0.9 per cent and 1.2 per cent spread over 20 months starting on January 1. The union had demanded a wage rise of more than 3 per cent and parity of public sector wages in eastern and western Germany by 2007. The failure of the talks creates additional problems for the government of Chancellor Gerhard Schröder,...

Germany effectively closed its doors to elite foreign workers yesterday after its highest court knocked down a controversial immigration law, dealing a hefty blow to Chancellor Gerhard Schröder's troubled government. The constitutional court, reacting to a complaint by opposition conservatives, deemed the law to be illegal because of the way in which it passed through parliament. The decision is a huge setback for Mr Schröder's attempts to push through the most sweeping immigration legislation since the Second World War, with which he had hoped to lure much-needed skilled foreigners into the workforce. The law, due to come into force on...

The leaders of some of Germany's biggest companies believe their country faces its worst crisis since the war amid deep scepticism about the ability of the government to solve Germany's problems. Their anger comes as the government of chancellor Gerhard Schröder this week prepares to unveil a unitary 25 per cent savings tax and an amnesty to encourage the repatriation of undeclared savings abroad. Business leaders, surveyed by the Financial Times and FT Deutschland, its sister paper, fear that rises in taxation and non-wage labour costs imposed by Mr Schröder since his re-election in September will stifle already weak growth....

THEY might maintain separate homes more than 150 miles apart, but Doris Schröder-Köpf, Germany’s first lady, is emerging as her husband’s most influential adviser as he struggles with plunging poll ratings and rumours of a palace coup. Gerhard Schröder, the chancellor, has long sought advice from his fourth wife, a former political journalist, despite her decision to bring up her daughter from a previous marriage at their home in Hanover. Yet to the dismay of many in his Social Democrat-led coalition, Schröder appears increasingly dependent on her since his narrow re-election in September, telephoning her up to five times a...

Chancellor Gerhard Schröder has engaged in a furious argument with his own party chiefs, demanding that they pull his Social Democrat party together to shore up his dented personal authority.Oh to be a fly on the wall of that meeting, "You must all love me! Now! I am your Fuhrer!" - Ivan In what opponents will see as a sign of fraying nerves, Mr Schröder was reported to have erupted at a meeting of the executive committee of the party on Monday night, attacking those straying from the party line and asserting: "It was not the SPD that won the...

AS Gerhard Schröder tries to cut £60 billion from Germany’s health and welfare budget, a series of rolling strikes has compounded the struggling chancellor’s woes. Opinion polls show that little more than two months after he was returned to power in a general election, 80% of Germans are unhappy with his administration. So short of money is Schröder that he has little room for manoeuvre with the striking public services union, Verdi, whose leaders have been infuriated by the budget cuts, defying calls for a pay freeze by demanding a 3% rise. “Slashing welfare affects the needy — it’s grossly...

Chancellor Gerhard Schröder delivered a strong attack yesterday on the critics of his economic policies, accusing them of presenting a "distorted picture" of a country on the brink of collapse. But as criticism mounted over his record, opponents said his long-awaited speech to the Bundestag had failed to persuade the nation that he could rescue it from its plight. The prevailing mood among the electorate - 80 per cent of whom are said to be unhappy with the government - is reflected in a protest in which citizens have been asked to send "the shirts off their backs" to the...

GERMANY will today reject international pressure to increase its defence budget and announce big cuts in spending on key arms projects. The saving, which is aimed at trimming about €6 billion (£3.8 billion) from an already overstrained defence budget, comes amid a heated national debate about economic management. Gerhard Schröder, the Chancellor, yesterday defended his plans to scrap some tax breaks and to introduce more market elements in the state pension and health systems. However, November’s unemployment figures again rose above four million, showing the fastest month-on-month rise since unification. The emergency in defence spending highlights Germany’s larger problem: the...

Complacency and inefficiency are the legacy of the post-war golden days Germany is in shock. It is not just that times are bad, bad enough for the sulphurous leftwinger Oskar Lafontaine to have scored a rare and palpable hit by comparing Gerhard Schröder to the hapless Heinrich Brüning, the Weimar Republic Chancellor whose ruinous policies sent Germany into a tailspin that paved Hitler’s road to power. It is not even that virtually every German voter reckons that the Schröder Government deliberately lied before the September elections, concealing a €15 billion hole in public finances in order to squeeze back into...

GERMANY may impose a wealth tax to plug its gaping budget deficit. New tax measures proposed by two federal states, and which may be extended across Germany, would affect families with assets valued at €1 million (£640,000). Companies would be taxed on holdings worth more than €2.5 million. The proposals have been put forward by North Rhine-Westphalia, the country’s most industrialised state, and Lower Saxony, home of Gerhard Schröder, the Chancellor. The states say that the money will be used to improve failing schools and to hire teachers. The prospect of more taxes drew protests from ordinary Germans, hit by...

No German Government since the Second World War has lost popularity as much or as soon after an election as the present administration of Gerhard Schröder. The Social Democrats’ (SPD) poll rating now stands at 30 points, a drop of 8.5 points in the two months since September 22. By comparison the opposition Christian Democrats (CDU) are now approaching the 50 per cent mark, buoyed by the widespread perception that Herr Schröder did not tell the truth about the economy during the campaign. The economic position is terrible. German unemployment is stuck at around four million people or 10 per...

GERHARD SCHRÖDER, a triumphant election winner only two months ago, has once more been bombarded by criticism from Left and Right, home and abroad, and pensioners and businessmen as his popularity plumbs new depths. The crisis in confidence, say well-placed sources in Berlin, could persuade the German Chancellor to step down as early as next spring. “He feels as if the nation has punched him in the stomach,” a media adviser to his team said. My heart bleeds. How does he think the nation feels after he lied to them? - Ivan Oskar Lafontaine, Germany’s self-appointed left-wing conscience, thrust the...

Chancellor Gerhard Schröder received more bad news yesterday as an opinion poll predicted defeat for his party in his home state of Lower Saxony in next February's elections. The polling firm Emnid said the Social Democrat Party (SPD) would win only 34 per cent of the vote, eight per cent down on the figure from a poll in September. This would be the party's worst election result in the state since 1957 and a far cry from the 1998 result of 49.4 per cent. The election, although only a state one, would be seen as a brutal verdict on Mr...

Germany is teetering on the brink of economic crisis. Consumer confidence has plummeted; Berlin has been reprimanded by the European Union for failing to bring the swelling budget deficit under control; tax revenues are in free fall; and the five so-called wise men, the government's panel of economic advisers, have torn apart the government's proposed fiscal policy. The mood among investors is bleak indeed. Any hope that, having secured his re-election, Gerhard Schröder would implement much-needed structural reforms has turned to bitter disappointment. The ruling coalition of Social Democrats and Greens has signally failed to find a convincing strategic vision....

Chancellor Gerhard Schröder was dealt a humiliating blow yesterday when the White House was reported to have turned down his request to meet President George W Bush at this week's Nato summit in Prague.ROFL! Bravo, Mr. President, Bravo! - Ivan The decision appears to undermine German claims that Berlin had repaired relations with Washington after Peter Struck, the German defence minister, met Donald Rumsfeld, his American counterpart, last weekend. The diplomatic foray had appeared to have papered over a falling-out over Mr Schröder's lack of support for US plans for action against Iraq and comments by one of his ministers...

Well, he said it. The Stability and Growth Pact, the keystone in the arch of the single currency, is "stupid". We have this on the authority of Romano Prodi, the president of the European Commission, no less, speaking to Le Monde last week. Despite the damage limitation exercise from his spokesman - Mr Prodi had really meant only that it should be used intelligently - the cat was out of the bag. The pact has provided neither stability nor growth, and it's clear that many countries in the eurozone intend to take not a blind bit of notice of it....

Gerhard Schröder's new programme of government promises nothing very much about anything—except a mistimed effort to cut the budget deficit ANYONE hoping for bold, wide-ranging reforms in Germany can expect to be disappointed. The eagerly awaited coalition agreement between the Social Democrats and their Green allies on government policy over the next four years goes little further than their vague election promises. Labour market reform? Well, as promised earlier, the government says it will implement the ideas of the Hartz commission in full; which, if it happens, is something, though not nearly as much as radicals think Germany needs. Other...

The German economy went into red alert yesterday as investors again sold out of the stock market, sending the Dax to a fresh six-year low. The market fell a further 1.64pc, bringing total losses this year to more than 50pc, despite positive manufacturing figures. "Shares are just crumbling," said one trader. The Dax closed 24.21 points lower at 2597.88, having been as low as 2519.30 at one stage. Each 10pc drop in share prices reduces consumption in Germany by as much as 0.19pc, said Bundesbank president Ernst Welteke. He added that falling markets would "have an effect on the real...