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German Election May Revive U.S. Relations

The placards on Berlin’s boulevard known as the Kurfustendamm (search) call on Germans to vote for parties from the far left to the right. All parties promise voters desperately needed jobs and a brighter future for a nation in despair.

For German voters, unemployment hovering near the 5 million mark has been the biggest issue leading up to the Sept. 18 election. It has allowed an unlikely challenger to pose a serious threat to Chancellor Gerhard Schroeder's (search) incumbency.

Why should Americans care about this election?

Because a victory by Angela Merkel (search), the candidate of the conservative Christian Democratic Party (search), will signal the revival of stronger ties between Washington and Berlin. Merkel, an unassuming physicist from former communist East Germany, commands a slim six point lead over Social Democrat Schroeder, according to the Sept. 12 issue of Der Spiegel (search), a respected German weekly. Merkel is more sympathetic to American foreign policy than the current chancellor. The Christian Democratic Platform (search), issued in July, declares that “we will revive the transatlantic cooperation with the United States.”

Simply put, should Merkel become the first female chancellor of Germany, President Bush will find the leading party in Germany to be one that traditionally espouses strong ties to the United States.

Karsten Voight, coordinator of German-American relations and an advisor to Chancellor Schroeder, conceded in an interview that German-American relations would be better under Merkel than they currently are under Schroeder. German-American relations have been badly strained since 2002 when Chancellor Schroeder promised that his left-leaning Social Democratic Party (search) would not permit Germany to be drawn into a war with Iraq.

President Bush was infuriated and has shunned the German leader since then.

Merkel has done everything she can to distance herself from Schroeder’s criticism of Bush’s foreign policy and has expressed cautious support for Bush’s Iraq policy both before and during the war. ”It is wrong to separate the issues of terrorism and Saddam Hussein,” she said. ”We need to see things from the perspective of the United States.”

Despite her more pro-American stand, she has made clear that German troops will not be sent to Iraq. She will continue the little-publicized German army training of Iraqi officers in the Gulf States.

Schroeder is partly pinning his hopes for re-election on his popular stand against the Iraq war and his claim to have made Germany “a respected force for peace.”

Merkel’s vocal skepticism of Schroeder’s support for the lifting of the European arms embargo against China (search)—a proposal that Bush came out strongly against—is also likely to endear her to Washington.

Merkel is expected to present a less Eurocentric foreign policy that is more independent of France and Russia. Both nations are frequent critics of American foreign policy, and Schroeder often shares their views.

German conservatives yearn for a special relationship with the United States, similar to the one enjoyed by Great Britain.

"We had that for most of the post-war period and it enhanced Germany’s influence in Europe," said Jens Paulus, an expert on America at the Konrad Adenauer Foundation (search) in Berlin. "We don’t have that anymore because of Schroeder’s strong ties with the French and Russians and their regular sniping at the Americans.”

Of course, should pro-American Merkel be elected chancellor, she will still govern a nation deeply critical of the war in Iraq and of President Bush—and German criticism of the United States will not change because a pro-American chancellor is elected. Only 13 percent of Germans polled this year think that German-American relations will improve while Bush is president, according to Manfred Gullner, Director of Forsa, an opinion polling center in Berlin.

However, Gullner also said that most Germans don’t think Schroeder’s Social Democrats have any remedies for the nation’s worsening economic situation. In spite of his incumbency and popular anti-war position, Schroeder’s party is the underdog in the upcoming election because it has failed to lower unemployment, has rammed through unpopular economic reforms that cut workers’ benefits and has failed to make a dent in the nation’s growing debt.

Germany is weighed down by the huge costs of reunification and burdened with an expensive welfare system that is badly in the red. Consumer confidence has struck rock bottom and is holding back domestic demand. This has become the biggest obstacle to growth. Germans see their generous benefits threatened and the economy getting worse.

During a nationally televised debate on Sept. 4, Merkel repeatedly attacked Schroeder for not cutting the ranks of the jobless. The next morning Volkswagen (search) announced that it would make deep job cuts in Germany as this giant automaker continues to lose money. Autoworkers in Germany earn $41.37 an hour, which includes the generous benefits mandated by law and negotiated with powerful unions.

Consequently, companies like Volkswagen, Siemens and BMW are investing in countries such as Slovakia and Hungary where skilled labor is cheaper. That is why there is little incentive for German industry to create jobs at home.

“Germany can only be a strong, reliable partner in the world if we are economically strong and that is what we are lacking,” Merkel observed during the debate. She pledged to support the modernization of the economy in order to make it more competitive in a rapidly globalizing world.

Jurgen Maurus, a political analyst for German radio, lamented the loss of German jobs to other countries. “We have to wake up and face the globalization challenge and stop being ostriches. German industry must create jobs in Germany,” he said.

However, Schroeder used the hour and a half long debate to hammer Merkel's tax policy, charging that her party would raise taxes. A poll conducted after the debate by Intratest- Dimap, a national polling center, found Schroeder to be the clear winner of the debate by a 54 to 35 margin.

Schroeder appears to be convincing some German voters that they will be poorer if they vote for Merkel’s Christian Democratic Party. Schroeder points to the advocacy of a 25 percent flat tax on all Germans proposed by Merkel’s chief tax advisor, Paul Kirschhof. The flat tax (search) proposal has been a source of embarrassment to Merkel, and she is backing away from the man she recently called” a visionary.”

According to the Sept. 12 issue of Der Spiegel, with the election nearing, Merkel’s once commanding lead over Schroeder has narrowed.

Should she become Chancellor, Merkel’s first priority will be to fix Germany’s staggering economy. Merkel described her challenge this way in an interview with Britain’s Financial Times: “What do I do in an economy where 1,000 skilled jobs disappear every day and where, at the same time, my entire social security system, pension ,unemployment and health insurance are financed by this shrinking pool of full-time jobs.”

Merkel’s remedies for the economy include:

—a value added tax to lower unemployment insurance

—tougher labor reforms to make it easier to hire and fire workers

—simplifying Germany’s 8,000 page tax code, larger that all of its European counterparts combined

However, an Intratest- Dimap poll last week showed that Merkel’s Christian Democratic Party would not win the majority necessary to govern alone. It would have to form a coalition government with the small pro-business Free Democratic Party (search). A less appealing alternative for the Christain Democrats would be to form a grand coalition with the ruling Social Democrats.

Traditionally, that would mean major compromises on how to reform the German economy and the award of the important Foreign Minister’s job to the Social Democratic Party, which has frequently criticized American foreign policy. This would make it harder for Merkel to fully revive strong relations with Washington.

Given Washington's strained relations with some of its European allies, the White House will likely be keeping a close eye on the German electorate on Sept. 18.

Don Snyder was a news producer at NBC for 27 years, overseeing domestic and foreign news for the Today show. He was a foreign correspondent stationed in Germany for the Toronto Star, and worked for the Berlin-based Mutual Broadcasting System. As a recipient of the Advanced International Reporting Fellowship, he studied at the Russian Institute at Columbia University.