German business has fallen out of love with chancellor Schröder's government and is hoping for a change of regime in September.
It's a dramatic reversal of fortunes from 1998 when, months after taking office, the German media renamed the left-wing "Comrade" Schröder the Genosse der Bosse, the comrade of the bosses.
The first Social Democratic (SPD) chancellor in 16 years began to drift away from the powerful unions almost immediately after they helped get him elected. Soon Schröder preferred to be photographed puffing fat cigars and hanging out with managers of Germany's blue-chip companies.
After seven years in power, the centre-left SPD-Green coalition government has made Europe's largest economy more business-friendly than ever.
The government's 2002 proposals to overhaul the welfare state even bear the name of Schröder's friend Peter Hartz, the chairman of Volkswagen, who chaired the reform commission.
The ideological revolution began with the government's tax reform five years ago, abolishing the 50 per cent tax on the proceeds of the sale of German companies' cross-holdings in each other. It was a bold move to dismantle the complex cross-holdings of Germany's leading companies that scared off foreign investors and sent shares in Deutsche Bank, DaimlerChrysler and Allianz rocketing on the Frankfurt stock exchange.
Irritated SPD left-wingers called it an unnecessary tax gift to Germany's millionaires. The government argued that the move could guarantee more tax income than before, freeing up dormant cross-holdings that were lying unused. In hindsight, the decision proved to be a costly move, arguably robbing the government of billions in tax income.
The tax reform saw the top tax rate drop from 53 to 42 per cent, a huge break for Germany's top earners.
Left-wing newspaper the Tageszeitung pointed out that someone like Porsche boss Wendelin Wiedeking, a friend of Schröder's with an income of 15 million, has seen his tax bill drop from 8 million under chancellor Kohl to €6.3 million now.
"According to the government's calculations, the super-rich shouldn't just hold onto this tax gift, but create new jobs," wrote the newspaper this week. With unemployment at a post-war high of five million - over 10 per cent - that calculation has gone wrong, the newspaper argued.
Earlier this month, the cabinet in Berlin approved plans to cut German corporate taxes, the highest in the world after the US and Japan, from 25 per cent to 19 per cent. Another proposal would allow owners of small and medium-sized businesses - the so-called Mittelstand that is the backbone of Germany's economy - to pass down the company to heirs without paying taxes. The new tax proposals would bring the total tax burden for companies down to about 32 per cent, closer to the EU average, and would have cost around €6 billion.
The proposals have been criticised by SPD left-wingers and the Green party as too pro-business. They have demanded that the tax cuts be linked to laws closing off tax loopholes.
The corporate tax-cut plan looks likely to implemented regardless, by this government or the next. Even calling an early election has been a boon to business, sending into limbo plans for a minimum wage and new anti-discrimination proposals.
But this government's pro-business record could make things awkward in an election campaign that will be dominated by SPD leader Franz Münterfering's recent attack on big business managers as "locusts" who descend on German companies, devour the fruits of workers' efforts and move on.
Economic issues and record unemployment will decide the German general election in September. Schröder has put away his fat cigars and is making a rapid retreat from his friends in big business.
