German Chancellor Gerhard Schroeder, the prodigal son of center-left politics, is returning home.
Recent opinion polls suggest Schroeder may fail in his bid to win a second term in elections next September. That's why I see Wednesday's tirade against the American economic system as a thinly veiled attempt to whip up political support.
Schroeder was preaching to the choir, telling a conference organized by his Social Democrat Party that Germany rejects the American "hire-and-fire" economic model. Schroeder said his country balances industry's need for flexibility with employees' need for security.
PHOTO: AFP
Anyway, if there is one thing we know about labor economics it is that nobody gets hired in the first place if an employer knows the prospective employee can't be fired subsequently. That logic seems wasted on the Social Democrats.
Is this the same Schroeder who surprised and delighted conservatives a few years ago by embracing pro-business policies? In case we didn't already know it, Wednesday's comments show that he can be all over the map, politically speaking, when it suits him.
We now find Schroeder claiming the high moral ground as the friend of the worker, the leader of the center-left coalition.
Schroeder is heading straight for trouble by running again on a jobs-come-first platform when there are 4.3 million Germans out of work. They must be asking: What were you doing while we were losing our jobs? One thing Schroeder has failed to do is balance the books.
His budget predicament has the EU peeved, and quite rightly. It was Germany -- under the previous administration -- that promoted the creation of the Stability Pact, which commits all euro-zone nations to fiscal responsibility.
Schroeder's predecessors insisted on the accord to allay German fears about entering into a monetary union with the Mediterranean countries. Now it turns out that Germany is the scofflaw.
Germany had targeted a 2001 budget deficit of 1 percent of gross domestic product. The decline in economic conditions resulted in a 2.6 percent shortfall. The ratio is forecast to be even larger this year.
Put all this together and you get a snapshot of the difficulties facing Schroeder. He was elected on a promise to create jobs, and employment instead dropped. Because his budget is in the red, there is little he can do in the way of fiscal stimulus.
And monetary policy is totally out of his hands. That is the bailiwick of the European Central Bank, an institution gratingly focused on preventing inflation, not on creating jobs.
That leaves Schroeder trapped between his own campaign rhetoric and a disappointing economy. As things now stand, we can get ready for the return of the Christian Democrats.
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