Schroder popularity slumps in public fury over taxes

GERMANY: Chancellor Gerhard Schröder's popularity has slumped by a record level since beginning his second term of office last…

GERMANY: Chancellor Gerhard Schröder's popularity has slumped by a record level since beginning his second term of office last month after an about-face on taxes.

Tax rises and austerity measures proposed to halt an economic meltdown have left voters seething. Some 84 per cent of Germans don't believe Mr Schröder's claim that the scale of the economic crisis only became obvious after his government was re-elected in September.

"The government has never before made such a stumbled start," said Mr Klaus-Peter Schöppner, managing director of the Emnid polling agency. "Most voters feel they're being hit by more rules, more taxes for companies and less cash for consumers."

Support for Mr Schröder's Social Democrats (SPD) has dropped more than three points in a month to just 35 per cent. Meanwhile support for the conservatives has risen by nearly 5 points to 45 per cent, its highest level of support in years.

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"It's the steepest plunge in support for a new government since the war," said Prof Dietmar Herz, political science professor at Erfurt University.

Voters were disappointed but understanding in August when the government decided to postpone planned tax cuts by 12 months to pay for the damage left by the summer floods in eastern Germany. But new levies on everything from flowers to energy has been a bitter pill for voters to swallow, especially those who voted SPD.

Yesterday's decision to raise pension contributions by nearly half a percentage point to 19.5 per cent could be the final straw.

The mood of discontent was summed up last week when the popular newspaper Bild published a list of new taxes and planned cuts alongside a photograph depicting the Finance Minister, Mr Hans Eichel, as Count Dracula.

Days after the election he announced that Germany's public deficit would rise to around 3.7 per cent of gross domestic product (GDP) this year, a breach of the 3 per cent ceiling set down in the stability and growth pact designed to stabilise the euro.

Since then there has been a daily diet of gloomy economic news. He said yesterday that the public deficit would drop below 3 per cent in 2003, meaning he is likely to receive only a moderate dressing-down from other eurozone finance ministers next week.

The breach of the stability pact, itself a mainly German creation, will be embarrassing for Berlin.

Nevertheless Mr Schröder, is determined to press ahead with swingeing cuts and has shown little sign of heeding opinion polls.

"We can't settle for the status quo now because it will lead to more problems down the road and ultimately to the collapse of our social welfare system," he warned.

But population experts have already predicted a meltdown of the pensions system in coming decades. "The ageing of society is not an option that lets itself be arranged by societal and political dealing; it will run down like clockwork," said Mr Herwig Birg, director of the Institute for Population Studies and Social Politics (IBS).

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin