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Schroeder rallies party for election

Vaiju Naravane

Opinion polls predict majority for Merkel-led coalition

PARIS: German Chancellor Gerhard Schroeder, who is fighting for his political survival, on Wednesday kicked off a congress of his Social Democratic Party (SPD) in Berlin, with a rousing call to battle just three weeks ahead of the September 18 general election that he is largely expected to lose.

Mr Schroeder's SPD is trailing a full 12 points behind its rival, the conservative Christian Democratic Union (CDU) led by Angela Merkel who hails from the former East Germany. If elected, she will be Germany's first-ever woman Chancellor.

The news has not been good for Mr. Schroeder's party these past few days, with pre-electoral polls consistently showing that the CDU continues to hold its lead. SPD leaders tried to reassure and mobilise their troops on Wednesday, with party leader Franz Muentefering saying: "I've often seen two goals scored in the last five minutes."

Gloomy predictions

But the press in Germany is full of gloomy predictions for the Socialist-Green combine that has ruled the country for the past seven years. "Those who are realistic know that Schroeder will not make it. But the party cannot talk about that without sabotaging the Chancellor and hobbling itself. So, the SPD is making do and noticing that after two months of campaigning, it has hardly made any progress," the Financial Times Deutschland wrote.

While there is no doubt that Ms. Merkel's party will have a substantial lead in the elections, it is still not clear, however, if the CDU-CSU team and its main ally, the neo-liberal Free Democratic Party (FDP) will get an absolute majority. If that fails to happen, Ms Merkel will be obliged to enter into a coalition government with Mr Schroeder's SPD. The Chancellor's biggest problem is Germany's stubborn unemployment rate currently hovering at 11 per cent of the country's working-age population. He has been unable to reduce this figure despite repeated pledges to put Germans back to work. In a bid to brush up the party's image, Ms Merkel on Tuesday named Heinrich von Pierer, the highly respected former Siemens boss, as her future chief economic advisor if she wins next month's election.

Innovation a priority

Speaking in Berlin on Tuesday, Mr. Von Pierer welcomed Ms. Merkel's determination to make innovation a top priority if she becomes Chancellor. In the face of stiff competition from China, India and other low-cost economies, innovation in areas such as biotechnology, genetic engineering and energy was the way forward, he said, accusing the Green Party of having constrained innovation and dynamism in areas key areas.

Ms Merkel also said she would introduce a flat tax rate of 25 per cent. Another of her proposals is increasing value added tax from 16 to 18 per cent. She said she gave herself 100 days to introduce sweeping labour reforms.

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