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Capital Markets

Germany's gradual revolution

Selling off Germany's autobahns and lamp posts are two of the more bizarre proposals of a government desperate to raise cash to bail out an ailing economy. The irony is that while there is broad agreement that changes are needed, the country's consensus system of politics is impeding progress. Ben Aris reports.

Schröder: Germany's most unpopular
post-war chancellor, he is caught
between political necessity and
practical politics

German's post-war Wirtschaftwunder (economic miracle) has turned into a nightmare for chancellor Gerhard Schröder. Europe's largest economy is in desperate need of reform, but German's consensus-style politics make it almost impossible to force through badly needed changes to the over-generous system. Schröder rammed the first package in a proposed string of reforms through the Bundestag in December. Economists say it will do little to improve the country's health. But it was a start – revolutions in German politics come in incremental steps.

Once the powerhouse of Europe, Germany's economy has been mired in recession for several years. The ruling Social Democratic Party launched a reform drive – Agenda 2010 – amid great fanfare last April and attempted to pass the first package of 15 bills designed to ease labour restrictions and cut taxes by the end of the year.

It went right down to the wire. Schröder had to threaten to quit twice in an effort to instil some discipline in the ranks of coalition partners who threatened to rebel.

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