In an exclusive interview with DW-TV, Peter Mueller, the conservative premier of the state of Saarland, talks about why his party is best prepared to handle the current economic crisis.
Mueller says it's important to support those who work hard to make it
Peter Mueller is a member of Chancellor Angela Merkel's Christian Democratic Union and has been premier of Saarland since 1999. State elections will take place on Aug. 30, 2009, less than a month ahead of the German general election, which is likely to take place on Sept. 27, 2009. Mueller, who has made himself a name as an economic expert, talked to DW-TV's Alexander Kudascheff about his party's strategy to deal with the current economic crisis.
DW-TV: We're facing an international financial crisis of unknown extent and the threat of a wider economic crisis. Is it the job of the chancellor to deal with that?
Mueller says his party needs to focus on its core strengths
Peter Mueller: In times of crisis, the government has to take on responsibility because action is called for: something the government does better than the opposition. I believe the German government's management, and the measures we've agreed to deal with the financial and economic crises, are the right way forward. But we will have to wait and see how things develop. No one can predict that.
There has been criticism of the chancellor's stance and her approach, from France, for example. They say she's too hands off, too reluctant to spend money, for example, on a fiscal stimulus package. Do you share that view?
We have put together a 500-billion-euro ($644-billion) financial safety package, for the banks and fiscal stimulus program worth 50 billion euros, which is on its way through parliament. And there are a whole host of other measures regarding bank guarantees and inter-bank lending. You have to be careful in a situation like this not to harm the economy by inflating borrowing for example, because that's something future generations will have to pay for, and nobody wants that.
But wouldn't lowering taxes be a possibility? Maybe drop the extra tax that pays for reunification -- to try to kick-start the economy?
We do need to find ways of reviving the domestic economy and we have introduced some -- for example, exemptions from vehicle tax for those who buy a new car within the next six months. But a general reform of the tax system or the abolition of that extra tax aren't necessary yet.
The last three years have seen the chancellor's popularity at an incredibly high level -- almost as high as the German president's. But her party, the CDU has never really managed to get much above the 35-or-so percent it received in the last elections. Is that a gap that will be impossible to close?
This government is a grand coalition. Typically, that helps to strengthen smaller parties. That's what we're seeing now, but the closer we come to the elections, the more the chancellor's positive image will benefit our party.
Could this be good for the two main parties? Will people see them as anchors of stability?
How attractive is the CDU
I do think this crisis represents an opportunity for the main parties. It's a chance for them, especially for my party, the CDU, to show it stands for the right economic and social policies. Our social market economy model is both economic and social in nature; it has stood the test of time, and it is now being tested again. I think that will attract voters to our party. No one knows what will happen in the future, but I think this is an opportunity for the main parties, especially the Christian Democrats.
The SPD's new leader, Franz Muentefering, says now is the time for Social Democratic solutions, meaning state-level solutions. What answers do your Christian Democrats have in the run-up to the party congress?
I don't agree with him. Past lessons have taught us two things; firstly, socialism makes people poor and robs them of their personal liberties -- freedom of opinion and freedom of political association. In recent weeks and months, we've seen that capitalism and an unbridled market can lead to an economic crisis; that's why we need a third way. Socialism is not the answer, although many in the SPD still support it, nor is pure capitalism. The answer is the social market economy, the middle way. That's the CDU's line, and that's why I believe our time is now.
Your draft election program, due to be approved at the party conference in Stuttgart, includes a call for a return to the principles of the honest merchant. Is that the CDU's answer?
It's one answer, one among many, but it is a good one. Greed took over on the financial markets; highly complicated products were created to bring in as much profit as possible at the cost of others. That's not the way honest merchants trade -- and now we know what it leads to. Another CDU answer must be the principle of reward for achievement over wealth redistribution. Fair reward is more important than fair distribution. Our policies focus on achievers, people who get up for work every morning. We need to take care of them and address their needs.
Has this crisis revived the role of the state and, perhaps surprisingly, restored people's belief and trust in the ability of politicians to change things?
A global economy requires global approaches
To an extent, this is the restoration of politics. We're seeing the death throes of the idea that the market can regulate itself fairly. It was never an idea I believed in, and nor did the CDU. But many in our society did believe it. People recognize that's not the case, so there's a revival of trust in the political system. But now, we have to see politics globally. The world just got smaller, we're facing a truly global recession for the first time and so the solutions need to be global, too.
You recently said the chancellor was holding back because she's waiting to see what happens in Germany. Other countries are busy intervening in their markets. Is this a lack of co-ordination?
The chancellor is holding back, that's correct. When it comes to economic packages to stimulate demand and how much money is needed for that, others have announced their plans. They are just announcements, but it may be that they go farther than us. In plenty of other areas, the chancellor certainly does not hold back, like more transparency and stricter controls on the financial markets. Angela Merkel was always a determined and tireless champion of these causes, even before the crisis hit.
Ten months to go till the parliamentary election: The grand coalition has been negative for your party and for the SPD. How can you make sure that won't continue after the poll in 2009?
Merkel (right) with her favorite coalition partner, FDP leader Guido Westerwelle
We are aiming for a center-right coalition after the elections. I think it is for the best when there is a clear shift in one political direction. We could achieve more in a coalition with the (free-market liberal) Free Democrats (FDP) -- on tax reforms, for example. Things that aren't possible with the SPD. But I also think a healthy democracy needs a healthy opposition to survive. A grand coalition must always be an exception, and ending the grand coalition is one of our election aims.
In your state, Saarland, Oskar Lafontaine, your Social Democratic predecessor and the current Left Party leader, says he'll run against you. Does he stand a chance? Oskar Lafontaine is on record as saying he wants to become state premier so he can run Saarland as he did when he was last in office. Back then, unemployment was above-average, groowth was below average, and spending on education was slashed, with teachers cut as student numbers were growing. I'm absolutely certain people do not want that again, and that's why I'm looking forward to the election next year.