Germany. In January, the government presented a second stimulus package of EUR 49 billion to cope with the most difficult recession in the country in decades. A first package had been adopted a few months earlier. Chancellor Angela Merkel, who has long been dismissive of further action, admitted that the situation was extreme. The package included investments in schools, roads and hospitals, tax and fee reductions, increased social benefits and a scrapping premium for older cars. The premium led to two million cars being replaced and new car sales getting an unexpectedly big push. In the spring, a law was also passed that allowed the state to take over bankrupt banks. It was used in October when the state took over the crisis-hit property bank Hypo Real Estate, despite protests from small shareholders.
What was called a super election year began with the new election in Hesse in January. The Social Democratic SPD, which in vain tried to form government for a year, suffered a stinging defeat. According to countryaah, Christian Democratic CDU formed a coalition with the liberal FDP, which has progressed very strongly. Federal President Horst Köhler was re-elected in May for a second, five-year term. Köhler was a bourgeois candidate and with a small margin got his own majority in the first round. The closest challengers were the SPD’s and the Green’s candidate Gesine Schwan. The president, who primarily has representative duties, is elected indirectly by an electoral college. Three elections in August resulted in three CDU-led state governments: in coalition with the FDP in Saxony, with the FDP and the Greens in Saarland and with the SDP in Thuringia.
The focus of the Bundestag election on September 27 was the financial crisis, wallet issues and the German troops presence in Afghanistan. The electoral movement was somewhat rejected – the CDU and the SPD who sat together in the outgoing “big coalition” had a hard time vigorously attacking each other. But the SPD hopelessly lagged in opinion polls and the election prepared the way for a new, completely bourgeois government. Although the Christian Democrats in the CDU and the sister party CSU backed slightly to just under 34 percent, the liberal FDP made its best choice so far and received nearly 15 percent of the vote. This gave the bourgeois a comfortable majority with 332 of 622 seats in the Bundestag. For the SPD, the election meant a historic loss. With 23 percent of the vote, the party recorded its worst result during the post-war period. As a result, Franz Müntefering left the party leader post; he was replaced by Sigmar Gabriel. The SPD’s chancellor candidate Frank-Walter Steinmeier became the party’s group leader on the Bundestag. The party’s crusade was explained, among other things, by the strict savings program that was launched in the early 2000s and which got the jumpers to join the new left party Die Linke. Die Linke received 12 percent of the vote, and the Greens around 10 percent. In Brandenburg, where the state elections were held at the same time, the SPD government formed together with Die Linke – something that was highlighted as unthinkable on the national level. In the recent election held in Schleswig-Holstein, the CDU won. The party’s crusade was explained, among other things, by the strict savings program that was launched in the early 2000s and which got the jumpers to join the new left party Die Linke. Die Linke received 12 percent of the vote, and the Greens around 10 percent. In Brandenburg, where the state elections were held at the same time, the SPD government formed together with Die Linke – something that was highlighted as unthinkable on the national level. In the recent election held in Schleswig-Holstein, the CDU won. The party’s crusade was explained, among other things, by the strict savings program that was launched in the early 2000s and which got the jumpers to join the new left party Die Linke. Die Linke received 12 percent of the vote, and the Greens around 10 percent. In Brandenburg, where the state elections were held at the same time, the SPD government formed together with Die Linke – something that was highlighted as unthinkable on the national level. In the recent election held in Schleswig-Holstein, the CDU won.
Just a month after the election, Merkel formed a new bourgeois government with FDP leader Guido Westerwelle as foreign minister. The new government took an offensive approach to give continued momentum to the growth that has just turned upwards after a year-long downturn, and promised tax relief of € 24 billion. It was not clear how they would be financed; Germany was estimated to have a budget deficit of about 4 percent and had a record high government debt of approximately 1.6 trillion euros to manage.
Requirements for stricter gun laws have been heard again since a 17-year-old in Winnenden in March hired carnage with a gun he had stolen from his father. The boy shot nine students and three teachers at his former school and three people outside the school before taking his life.
In November, the 20th anniversary was celebrated by the fall of the Berlin Wall, which prepared the way for Germany’s reunification. Hundreds of thousands of people were present and speeches were held by both contemporary and then political elevators from a number of countries.
An air raid carried out on German orders in Afghanistan in September grew towards the end of the year to an increasingly hot domestic political issue. Accusations of attempts to darken that there were civilian casualties among over 140 dead in the attack on two tankers led to the resignation of Germany’s commander-in-chief, the secretary of state of the Ministry of Defense and the then Minister of Defense. In December, an investigation was launched into the airstrike, and the new Defense Minister Karl-Theodor zu Guttenberg also seemed to be sitting loose.
Political and social unrest
The incorporation of East Germany into the West German social system became a far more difficult and burdensome task than many had anticipated, not only financially, but also socially and humanly. In the aftermath of the gathering, many East Germans got the feeling of being second-class citizens and their brothers in the West inferior. The enthusiasm for the reunification was quickly dampened, and the flow of economic refugees from East Germany and from abroad put serious problems on both the economy and social stability.
Unemployment and social distress and uncertainty in the East led to a strong boom of neo-Nazi and right-wing extremist groups. East Germany had a large influx of immigrants from former communist countries in Asia and Africa, and the xenophobia primarily targeted them. There were also several racially motivated assassinations aimed at Turks. There have also been attacks on Jewish properties and violations of Jewish cemeteries and memorials. In an effort to curb emerging neo-Nazism, the authorities have increased the penalties for racially motivated crimes and banned several neo-Nazi parties. A memorial to the victims of the Jewish extermination was opened in Berlin in 2005.
Following the reunification, tightening was also made in Germany’s liberal asylum policy. In 1992, the number of asylum seekers was 438,000, of which 122,000 came from the former Yugoslavia. After the tightening, the number dropped by as much as 60% from 1994.
The large group of Kurdish refugees has created problems through a series of violent attacks against Turkish properties in Germany. More than two million ethnic Germans from the Soviet Union and other Eastern European countries have returned to Germany after the reunification. These were initially welcomed and received solid help from the German state to establish themselves, but the increasing financial problems following the reunification led to tightening of the aid program.
East Germany, which had been portrayed as the economic wonder of Eastern Europe, turned out to have an industry with worn-out machinery and poor organizational structure. There were hardly any environmental requirements for industry, energy production and communications, and several appalling pollution scandals were revealed. Large parts of the East German industry collapsed as the market economy was introduced, and unemployment rose dramatically. This was especially true when core businesses closed down in some of East Germany’s one-sided industrial cities.
The (West) German authorities had obviously underestimated the cost of the reunion. Kohl promised during the first joint election campaign that taxes for the people of the west should not be increased, but the heavy financial burdens brought by the reunification nevertheless forced tax increases. In 1993, the Chancellor succeeded in establishing a so-called solidarity pact between the government, the opposition, the state governments and the social partners. A “solidarity tax” of 7.5% of income was implemented from 1995.
Several sectors of business struggled hard in the late 1990s, and the new government under Gerhard Schröder (from 1998) advocated for increased state savings to save Germany from a difficult economic situation. The goal of the reforms was to create new growth and more jobs.
At the beginning of the new century, unemployment reached 12%, while the economy was nearing zero. An increasing birth deficit also raised concerns. Four years in a row, the state budget was made up with deficits that exceeded the 3% limit in the EU’s so-called Growth and Stability Pact; only a softening of the rule meant that one avoided financial penalties. According to a government report, a significant part of the cause was in the error of reunification; NOK 10,000 billion was transferred to the former GDR in the years 1989–2004. To reverse the stagnation, several reform and restructuring plans were presented, with the Schröder Government’s Agenda 2010as the center of gravity. The measures included both social security benefits, an increase in deductibles and retirement age, a softening of the regulations in working life, a relief for companies and extended working hours without pay compensation. In sum, it is about adapting a generous welfare system to a situation where German industry faces increased competition from low-cost countries. The “packages” met in part strong opposition from the trade union movement and triggered mass demonstrations, and in several cases had to be moderated in order to be adopted.