German Press Review: Berlin's Money Woes

It’s hard to find a paper which has anything good to say about the situation or the way the government and its finance minister, Hans Eichel, is coping with it.

"Mr. Eichel is likely to break the record for new government debt of over €40 billion set by the conservative Finance Minister Theo Waigel in the '90s," the business paper Handelsblatt wrote. And the situation "seems to drive him into political resignation." That’s the only way you can understand his statement that Germany can’t take any more tough financial measures. The trouble is, the paper pointed out, he seems to be right; the voters run away as soon as the slightest savings at their expense are mentioned.

The Neue Ruhr/Neue Rhein Zeitung is more forgiving of the finance minister, pointing out that it’s partly the fault of his boss, Chancellor Gerhard Schröder, and of the opposition. The chancellor doesn’t back the finance minister, and the opposition doesn’t cooperate with him in cutting back out-of-date subsidies. But, taken all together, the paper sees a desperate situation, with Eichel not having any idea how to get out of the mess. "Through its short-term, increasingly rudderless financial policy the state is making itself unable to act," the paper thundered. Pensions and interest payments eat up half the government’s budget, it pointed out gloomily, before a single cent has gone into all-day schooling, education and research.

The Financial Times Deutschland concentrated on the role of Hans Eichel. "For a man who has had to confess for the seventh year running that he’s taken in less than he expected, who’s broken the European limit for new debt for the fourth year running, who’s approaching a record new debt figure, and who is being made a fool of by his boss and his party—well there’s only one thing for him to do: turn out the light and leave." But, actually, the paper said he’s doing the right thing. There’s a hope right now that a spark will finally spread from the country’s booming export growth to domestic demand, which has been stagnant for years, and there’s no sense in cutting back drastically on expenditure or raising taxes. Wait a bit, is the paper’s recommendation, see if the economy takes off, and borrow to cover unexpected tax shortages. The trouble is, said the paper, the government seems incapable of expressing this simple thought clearly.

Well, how about that for an original idea? The Neue Zeitung of Wetzlar suggested raising taxes. "The people," it wrote, "have got more money in their pockets as a result of tax reductions, but they’re not boosting domestic demand by spending the money. So let the state take the money back and spend it instead." The paper doesn’t want to see the money spent on prestige projects, just on roads, police and schools—the sort of things whose effectiveness is being threatened by the fact that not enough money is being spent on them.

But it won’t happen, at least not if the Berliner Zeitung is right and the government has lost all its ambition. Chancellor Schröder, it wrote, seems unwilling to commit himself to anything. Cabinet members who had convictions have been sidelined. It happened to the finance minister, it’s happening to the economics minister, Wolfgang Clement, who’s only allowed to make reforms which won’t hurt anyone. Naturally the government want’s to pause for breath, but, said the Berliner Zeitung, the country can’t afford to stand still so long.