• A class debate has erupted in Germany (Photo: European Commission)

Germany in throes of class debate

03.05.05 @ 17:42

  1. By Honor Mahony
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BRUSSELS - The EU's largest member state is finding itself in the throes of a raucous debate about the merits of capitalism, sparked by the chairman of the ruling Social Democrat Party, Franz Müntefering.

Germany's debate started last month when Mr Müntefering condemned the "anonymous faces" of capitalism.

He accused international investors of being "capitalist locusts" chewing up and then spitting out companies.

"I am criticising all those who think they can pick whatever they need out of any company ... and they do it without thinking about the employees and all the people who are affected by their decision".

Chancellor Gerhard Schröder also entered the fray by speaking out against an "unrestrained neo-liberal system".

Both politicians were playing on widespread anger in Germany following an announcement by Deutsche Bank in February that it would lay off around 2,000 employees, despite having record profits the previous year.

The statements have hit a nerve with German citizens with a recent poll showing that 73 per cent share the sentiment behind these ideas - they also come as figures show that Germany has the lowest growth rate in Europe while the number of unemployed continues to hover around the five million mark.

According to Albrecht Koschützke from the left-leaning Friedrich-Ebert-Stiftung, Mr Müntefering has, almost without meaning to, tapped into a "growing discomfort" that Germans feel with globalisation.

His few "choice phrases" have sparked off a wide-ranging discussion, said Mr Koschützke adding that Germans are used to 50 years of a social market economy and are finding it hard to adjust to the "neo-liberal ideas of the last 10-15 years".

Anger

But Germany's companies have reacted angrily to the statements, arguing that they are only doing what is necessary to remain competitive as Germany fights rivals from new member states and from countries like China.

The bad feeling came to a head with a leaked list of 12 "locust companies" which Mr Müntefering feels represent the worst capitalist traits.

Leaked to German media, the companies include Deutsche Bank and Goldman Sachs.

Dieter Hundt, president of the employers' association has reacted strongly to the "locust debate" as it has been dubbed by German media.

Mr Hundt particularly criticised the way all international investors have been put under "blanket suspicion" by the Social Democrats' comments.

Saying it would damage Germany as a business location, he added "we have to get more foreign investment to invest in our country".

This is a viewpoint shared by Stephanie Wahl of the Institute for Economy and Society in Bonn.

She says it is a "useful" to have such a debate but the SPD has let it become too polarised and one-sided. If it continues over a long period like this, companies may eventually decide to locate in Austria instead, says Ms Wahl.

A case of electioneering?

However, many Germans are sceptical about the motives for starting this class debate.

The Social Democrats are facing a crucial election later this month in North Rhine Westphalia, the traditional SPD heartland that they have ruled for the last 39 years, but which polls show as currently favouring the opposition Christian Democrats.

But despite appealing to many of the rank and file with their statements, Chancellor Schröder has pledged not to abandon tough social reforms, which have been unpopular within the socialist party.

He has also said he will stick with his plan to lower corporate tax rates in Germany, something announced last month in direct response to corportate threats that they would move eastward where conditions are more beneficial.

Some feel this debate will also be a part of the general eletions in 2006.

"Germans are very thorough", says Ms Wahl referring to the level of debate they lead. She believes it will also form part of a general SPD campaign next year.