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Europe

German Press Review: Berlin’s Financial ‘Hole’

Germany's spiraling deficit spending continued to dominate the editorial pages of regional and local newspapers on Thursday. German Foreign Minister Joschka Fischer’s Washington trip also featured prominently.

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Will the German government bust the piggybank to push through its tax cuts?

Though the editors of many German newspapers have greeted the government’s plan to pull forward a planned tax cut to spur consumer spending in 2004, many have been critical of the government’s plan to finance it. In order to cover the revenue shortfall the cut will entail, the government says it will borrow between €4 and €5 billion, privatize state-run businesses and cut subsidies to farmers, builders and others.

The editors of Munich’s Süddeutsche Zeitung warned that government plans to reduce vacation time in an effort to spur the economy aren't a long-term solution to the nation's problems. Instead, the paper is calling for an overhaul of the government's own employment practices. "The public coffers are threatened by an overwhelming wave of impending retirees and their generous pension plans," the paper wrote. "Compared to this, vacation pay and Christmas bonuses are little more than crumbs. Up to 40 percent of state budgets go towards personnel costs. The answer is clear: fewer bureaucrats who are given jobs essentially for life but a few well-paid and professional public employees. That's also good for motivation," the Süddeutsche concluded.

The Berlin-based Die Welt expressed disappointment at the government's failure to come up with long-term solutions before the summer break. "If you'd had the impression at the beginning of the tax discussion that the government and the opposition at least recognized the seriousness of the situation,” the paper wrote, “ you'd now be contemplating the sobering image of men freshly back from vacation delivering something to the public that has been hastily slapped together." It continued: "And even the euphoria that the opposition will have once it gets the governing ball back has its limits." The paper’s editorialists also noted that even if the current woes lead to a change in government, the financial hole in which Germany lies won't make the next government's job an easy one.

In Frankfurt, the Frankfurter Allgemeine Zeitung accused German Chancellor Gerhard Schröder of tossing out a quick-fix at a time when hard measures are needed. "Schröder's growth injection comes at a time in which the economic cycle stands almighty on the horizon," the paper wrote. "Relaxing the tax burden and social costs would be highly welcome -- but not at the price of immense deficits, the financing of which bring in new uncertainties and undermine the trust necessary to properly serve the economy. What we need is a relaxation of burdens that also awakens trust -- through workable savings measures and the implementation of planned reforms in the legal structure of the labor market and tin the social security system." The paper goes on to accuse Schröder of dodging these responsibilities with what it calls his "tax coup before the summer break."

In Essen, the Neue Ruhr/Neue Rhein Zeitung opined that German Foreign Minister Joschka Fischer needs to reach out to U.S. President George W. Bush, but not to grovel before him. "Iraq cannot be built by the Pentagon," the paper wrote, "that's why the international community has to work towards the stabilization of Iraq and the construction of a new form of government. For Bush, who has to start his reelection campaign, this could prove to be either a liberation or a loss of face. It is up to Fischer to get across the idea that this is no time for gloating or discussing the war's validity. With the necessary self-confidence he can set the wounded relationship between Germany and the United States on the right foot."

In the eastern German city of Cottbus, the Lausitzer Rundschau commented that Fischer needs to recognize that, like it or not, Germany will have to take a more active role in Middle East politics. "Washington will have to ask for support of the United Nations and the Security Council and at the same time clean up after its mistakes. Whether or not that is a mandate for NATO is, in the end, a second-tier question. Berlin finds itself in the unenviable position of disagreeing with the mandate and nevertheless being compelled to take part. For geographical reasons alone, Europe cannot accept instability in the Middle East."