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INSIGHT

Upcoming Germany Elections

Aired September 14, 2005 - 23:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEO CLIP)
COLLEEN MCEDWARDS, CNN HOST: An uncertain outcome in an important election. Germans head to the polls this Sunday, many undecided about who should lead their country, the Social Democrat Party of Chancellor Gerhard Schroeder --

GERHARD SCHROEDER, GERMAN CHANCELLOR (through translator): We have to tackle the question of unemployment.

MCEDWARDS: -- or the Christian Democratic Union, led by Angela Merkel.

ANGELA MERKEL, GERMAN CANDIDATE (through translator): The SPD promised 1.5 million jobs within three years, but did this happen?

(END VIDEO CLIP)

MCEDWARDS: Hello and welcome to INSIGHT. I'm Colleen McEdwards.

Just a few months ago, Angela Merkel seemed a sure bet to become Germany's first female chancellor. Her Center Right Party held a commanding lead in the polls, but Chancellor Schroeder's Social Democrats have been chipping away at that lead. Germany's economy is still a central issue in this election. Lots of Germans are out of work and they don't want to lose any more social or unemployment benefits.

But both the main parties say that tough economic reform is necessary. On our program today, Germany's economic election.

CNN's Robin Oakley begins our coverage.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: (UNINTELLIGIBLE) all the horrible news about New Orleans and horrible climate and what it means.

ROBIN OAKLEY, CNN EUROPEAN POLITICAL EDITOR (voice-over): Holger Blech (ph) makes up rhymes in German or English to sell the next day's newspaper to customers in fashionable Berlin restaurants. With an election on, business is brisk.

UNIDENTIFIED MALE: -- for only 75-cents, you have to buy one.

OAKLEY: The papers are loaded with news of the upcoming election and diners aren't short of opinions on the issues.

UNIDENTIFIED MALE: There are not really good numbers of unemployment.

OAKLEY (on camera): Is there an unfair preoccupation in Angela Merkel's case, perhaps because she is a woman, with things like her hairstyle and her clothes?

UNIDENTIFIED MALE: No, I wouldn't -- on the contrary. I mean, it's an advantage of her being a woman, because I think for some people this would already be a reason to vote for her.

OAKLEY (voice-over): After seven years and with around $5 million jobless, there is no shortage of criticism for Chancellor Schroeder.

UNIDENTIFIED MALE: It's not really clear what he wants. I hope when new people come, the new lady comes or whatever, it gets better.

OAKLEY: But still, nearly 1/3 of voters say they remain undecided. Michael Gruce, an engineer working at Berlin's Technical University, fears for his job and for the future of his three children, like daughter Siria (ph). He's received his voting documents and he's determined to use his vote, but for whom and why?

MICHAEL GRUSE, UNDECIDED VOTER: I guess it will be probably how it will affect my family and my taxes, how much money I will have left over after I get my pay.

OAKLEY: Last time he voted for the SPD, Chancellor Gerhard Schroeder's Social Democrats, but he's not keen to do so again.

GRUCE: They have changed a lot in the last decades I guess.

OAKLEY: So how about Angela Merkel and the Christian Democrats.

GRUCE: Their standpoint towards family, that is appealing. But on the other hand, they already plan to increase the taxes.

OAKLEY: Does the new Left Alliance appeal, then?

GRUCE: I don't really know what they're all about.

OAKLEY: He has some regard for the Greens, but has any party said anything so far that has struck a chord with him?

GRUCE: Not so far that I can remember.

OAKLEY: There is no shortage of posters in the streets. Plenty of animated discussion at caf‚ tables. And Mrs. Merkel's Christian Democrats remain the favorites to wrest power from the Red Green coalition of the Social Democrats and Greens. They want to govern with their own traditional partners, the Free Democrats of the FDP.

But the intervention this time of a new Left Party Alliance of former Communists and Social Democrat rebels led by former Finance Minister Oscar Lafontaine, has added to the uncertainty.

If the Left Party get enough votes, then the two big traditional rivals, the Social Democrats and the Christian Democrats, each short of a majority, might be forced to govern together in a so-called grand coalition, frustrating almost everybody's choice.

(on camera): For the past two years, the Red Green coalition, dominated by Gerhard Schroeder's Social Democrats, have been behind in the polls. Angela Merkel's Christian Democrats have enjoyed a clear lead. But Mr. Schroeder insists this is an election that will be determined in the final week of the campaign, and with many German voters yet to make up their minds, there is still everything to play for.

Robin Oakley, CNN, Berlin.

(END VIDEOTAPE)

MCEDWARDS: And one thing to keep in mind about the election is the Dresden Factor, as it is being called. The voters in one district in the Eastern German city will head to the polls two weeks late because of the death of a parliamentary candidate and there are concerns that the 219,000 voters in Dresden will be influenced by Sunday's election results, particularly if they end up being close.

Several people asked Germany's highest court to order a delay in releasing the vote tally because of this, but on Wednesday the court ruled otherwise and a provisional result will be announced on Sunday as planned.

We're going to take a break now, and when we come back a painful political challenge for any Germany leader. Keeping voters happy while trying to fix Germany's economy.

Stay with us.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): I've been unemployed for five years now. Before, I used to make good money. Now I am on the (UNINTELLIGIBLE) program and I have no money to go out, for instance, or to save some in order to buy something I would like. The wish of the unemployed is, of course, to find a job again, that the market recovers. I trust that the SPD will make that happen.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCEDWARDS (voice-over): High unemployment, low growth, ballooning debt and global competition. Can anyone solve Germany's economic problems?

PROF. MANFRED GOERTEMAKER, POTSDAM UNIV.: This election is, of course, mainly driven by the economic issues, obviously. Unemployment is very high in Germany. About 5 million people are unemployed. There is practically economic stagnation and has been for years now.

MCEDWARDS: Welcome back.

Chancellor Gerhard Schroeder made a now infamous campaign promise when he was first elected back in 1998. He said if he couldn't cut unemployment significantly, then he wasn't worth reelecting. Well, the unemployment rate when he made that comment was 10.7 percent and now it is above 11.5 percent.

Schroeder has tried to push through economic reforms, but anger over those measures forced him to call this early election. The Christian Democrats have even harsher economic proposals on the table, and many voters are concerned about that.

Joining us to talk about the issues in this campaign, we have Karen Donfried, the senior director for policy programs at the German Marshall Fund in Washington.

Karen, thank you so much for being here.

Let's start with Gerhard Schroeder. I mean, why haven't his policies been more effective on the economic front?

KAREN DONFRIED, GERMAN MARSHALL FUND: Germany is a classic social welfare state, and there is a very broad consensus about what a social welfare state should guarantee its citizens. Schroeder represents the Social Democratic Party. It was hard for him to build a consensus within his own party about what reforms were acceptable and then it was very difficult for him to put those reforms in place.

So you pointed out, he's now at a point of having near record unemployment of almost 5 million people without jobs.

MCEDWARDS: Why are people then so distrustful of what Angela Merkel is putting forward?

DONFRIED: Well, she understood that it's the economy in this election, and tried to compile a very impressive group of advisors. One of them, Mr. Kirhope (ph), has turned out to be quite controversial, because one of the things he is know for is being an advocate of the flat tax. That has allowed Schroeder and his Social Democrats to argue that if Angela Merkel were elected, that she would tax nurses and millionaires at the same level. So there is a bit of a scare tactic going on on both sides I would say.

MCEDWARDS: Well, you know, he has seized on it fairly effectively, hasn't he?

DONFRIED: Absolutely. It's a great line. Angela Merkel, she'll come in, you know those Christian Democrats. They don't care as much about the social guarantees, and look, here is the evidence. She has a man advocating the flat tax.

MCEDWARDS: Given what you have already decided, some of the unique nature of the Germany economy, and it is an important European economy, is there a policy out there that can really fix it?

DONFRIED: Well, it's a good question, and one could ask whether the reforms that Angela Merkel is proposing are fundamental enough. There are so many aspects of the economic problem in Germany, one of the key ones is the need to liberalize the economy more.

In Germany, once you have hired someone, it is very hard to fire them. There are many social benefits that go along with that. Schroeder has tried to change that, tweak that system, but the argument is that you need someone to fundamentally reform the system.

Merkel's problem right now is that we've seen the numbers for the parties, the main political parties, change over this last week, and it now looks like her party, the Center Right CDU, would not be able to form a majority with its preferred coalition partner, the Free Democrats. So if she doesn't have the coalition of her choosing and has to form a grand coalition with the Social Democrats, it will be even more difficult for her to get through reforms.

MCEDWARDS: Yes, I mean, who knows at that point. With West Germany having poured so much money into the former East and with that economy really still suffering, unemployment there much higher, some say up even 20, 25 percent. What has been the problem there, because other former Communist countries have moved into a market economy much more successfully and without the kind of help and economic input that East Germany has had.

DONFRIED: It is striking how much money is still being transferred from the western part to the eastern part of the country 15 years after unification. And just as an aside, let's remember one thing that is so striking about this election is that if Angela Merkel becomes the chancellor of Germany, it will be Germany's first woman chancellor and Germany's first chancellor from the eastern part of the country. So that is quite interesting.

But there are many arguments about why it's been so hard to integrate the two parts of Germany economically. Some people say that part of the problem was right at the start, 15 years ago, when the East German currency was traded in for the West German currency at a rate of one to one, that that didn't fairly represent the value of that currency and in fact made it harder for Eastern Germans who actually weren't as competitive in the workforce, to get jobs.

There are a lot of reasons that go into it, but in a sense it is a problem that whoever is the next chancellor of Germany will have to grapple with.

MCEDWARDS: Dr. Donfried, have business leaders come out one way or the other in this campaign? I mean, is the business community taking a strong stand here in terms of the parties or the candidates?

DONFRIED: Well, the business community of course is always cautions. I mean, there is one former business leader who is part of Angela Merkel's campaign, has been advising her, but I think as we would see in the United States, business leaders are playing both sides of the aisle on this, because they want to have influence with whoever is sitting in that chancellor's office.

MCEDWARDS: And Labor then?

DONFRIED: Labor is a traditional strong point for the Social Democrats. What is so interesting, if you look at the left part of the political spectrum, is how it is fractured over time. There is this new Left Party, and Oscar Lafontaine (ph), who is one of the leaders of it, was in Schroeder's first cabinet as finance minister. He's on the left of the SPD, was a real favorite of the trade unions. And I think it's going to be very interesting to see how union members vote I this election.

Will they stick with the SPD under Schroeder or will we see them going to follow Oscar Lafontaine (ph) in this new party of the left?

MCEDWARDS: Well, only a few more days to wait and see.

Dr. Karen Donfried, we have to leave it there. Thank you so much, appreciate it.

DONFRIED: My pleasure. Thank you.

MCEDWARDS: All right.

Well, just ahead, will Angela Merkel's gender make a difference in this election?

Stay with us, that's ahead.

(BEGIN VIDEO CLIP)

JACQUELINE BOYSEN, MERKEL BIOGRAPHER: She has always been attacked because of her hairdressing, because of her somehow different behavior, and she could hide behind this very strong critique, and she had never been demoralized. That shows, I think, how strong she is as a woman. If you open the newspaper and for many years you read that you are not accepted because of coming from the East, because of your hairdressing, because of your dresses, whatsoever, and you're able to ignore it, that is, I think, very strong.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

AXE (through translator): After the fall of the wall in '89, my life has changed considerably. I have been given a lot of opportunities in the last 15 years and I am conscious not everyone in the East has been given the same.

MCEDWARDS (voice-over): Before politics, her passion was physics. She was raised in East Germany, but her political career is firmly anchored in the West. She bristled at the attention paid to her hair and clothe, but later in the campaign she spruced up her look.

UNIDENTIFIED MALE: The most important thing she change during the last month is she is starting to smile.

MCEDWARDS: Angela Merkel, the perfect antidote to male-dominated Germany politics or an aloof, analytical scientist who lacks the passion to lead?

(END VIDEO CLIP)

Welcome back.

Well, she is not really know for making great speeches or being charismatic beyond belief, but if she wins the election, she will make history. Angela Merkel, at 51 years old, could become Germany's first female chancellor. But what would that be like?

To explore that and other questions about Merkel, we are joined now by Dr. Kristine Kern, a visiting professor at the University of Minnesota.

Dr. Kern, thank you so much for being here.

Angela Merkel has seen her lead in the polls essentially evaporate. I'm wondering what your thoughts are on this. Is this just the frontrunner syndrome, when you're that far ahead you have nowhere to go, really, but down? Or do you think there is something else at work here?

KRISTINE KERN, UNIV. OF MINNESOTA: I think that always when it is a very close race and it's the last days, that things are changing very much and maybe Chancellor Schroeder is better on TV, for example, in the very last round.

There was also in the last elections -- it was a similar situation, when he improved the percentage of the SPD in the very last weeks.

MCEDWARDS: Yes, he is known for coming from behind, as we know.

I wonder if you think the fact that Angela Merkel is a woman has anything to do with it. Is Germany ready to have a woman as chancellor?

KERN: I think it would be a very new idea to have a woman as a chancellor, and what is surprising is that it happens in (UNINTELLIGIBLE) and not in another party. I mean, other parties are more famous -- for example, the Green Party. We will never have a Green chancellor in Germany, but you would expect it more from the SPD but it never happened. So it happens in the (UNINTELLIGIBLE). You have to ask why this happened, and I think she was for a lot of time underestimate.

MCEDWARDS: If she were to be elected, what kind of a political structure is she going to face in Germany? I mean, how friendly is the political structure to women?

KERN: Not very friendly, I would say. But she made it already, so she made it for the last 15 years and she was very successful. I don't think Germany will change by that. There might be some spillover, some motivation for young women, but in general, actually, I think you would have even less female ministers, for example, because the Conservative Party is very male dominated. So she might be one out of three women in the government.

MCEDWARDS: You know, some people are already talking about comparisons with former British Prime Minister Margaret Thatcher, that kind of thing. Is that even applicable here, do you think?

KERN: There are some parallels. She is a natural scientist by training, so that makes a difference, and she is conservative. She has some very liberal views, also some views on family structure. So there are some parallels, but I think Germany today is not the United Kingdom when Ms. Thatcher was elected.

MCEDWARDS: We've already talked a little bit about the problems that she has had with her financial advisor, her financial critic, who has been a close advisor to her, and some of his unpopular ideas. But I'm wondering, for Angela Merkel herself, does she have the credibility in the business community, the labor community and among voters? Does she have the credibility on economic issues, because you know there is a lot of political study out there that says when people don't want to vote for a woman leader, they often won't say, "I won't vote for her because she's a woman," but what they'll say is, "Well, you know, she doesn't -- she can't handle the tough economic issues."

KERN: I think she is very analytical and I wouldn't think that voters would deny that. She has a lot of experience in different fields, so she was not just a family minister. She was also an environmental minister, she was secretary-general. So she had a lot of positions and she is more of an analytical character. So I wouldn't think so.

MCEDWARDS: All right, Dr. Kristine Kern, thank you very much for joining us, I appreciate it.

KERN: OK. Thank you.

MCEDWARDS: Well, the real votes won't be counted until Sunday, of course, but in politics there are all sorts of ways to predict a winner, and in Germany it is appropriate perhaps that one of the measures of a candidates success has to do with beer.

Chris Burns explains.

(BEGIN VIDEOTAPE)

FRANK ISMAYER, BEER GARDEN CO-MANAGER: You can choose from the beer tap. You can either choose a conservative Merkel beer or a progressive Social Democratic Schroeder beer.

CHRIS BURNS, CNN CORRESPONDENT: How are they voting there at the tap?

ISMAYER: Our vote is almost 2/3 of the beer goes to Schroeder.

BURNS: Can we ask you which candidate did you chose in beer?

UNIDENTIFIED MALE: Ms. Merkel.

BURNS: Why? Does it taste better?

UNIDENTIFIED MALE: A little bit fresher.

BURNS: All right. Not seven years old, like the other government.

UNIDENTIFIED MALE: Not seven years old, yes.

UNIDENTIFIED FEMALE: I just mix it with Sprite. We call it a (UNINTELLIGIBLE). Yes.

BURNS: Maybe people would accept Schroeder more easily if they did kind of mix. Maybe a gray coalition. Maybe that's what is important.

UNIDENTIFIED FEMALE: I think that would be exciting.

BURNS: And can I ask who you will vote for?

UNIDENTIFIED FEMALE: I'm not sure. I think it will be the animal protection or the Gray Panthers (ph). Do you know them?

BURNS: The Gray Panthers (ph)? But you're not gray.

UNIDENTIFIED FEMALE: No, I'm not, but I will be.

UNIDENTIFIED MALE: Maybe Schroeder.

BURNS: And why Schroeder?

UNIDENTIFIED FEMALE: Yes, why Schroeder?

UNIDENTIFIED MALE: Why Schroeder? It's difficult. We have to discuss.

BURNS: I see a domestic situation developing here.

UNIDENTIFIED MALE: My roommate is an SPD member, Democrat, and he tells me all the time vote Schroeder of I will kick you, so I have no choice.

BURNS: Well, yes, you don't want to be smothered in your sleep or something, you know, you have to be very careful about that.

UNIDENTIFIED FEMALE: I'm not sure.

BURNS: There are millions of people like you, who haven't decided yet.

(voice-over): But while some come to drown their indecision, others come to drown their sorrow.

ISMAYER: Sometimes, because I know then, they are coming from the chancellery, from the (UNINTELLIGIBLE), and they are taking (UNINTELLIGIBLE) beer for Schroeder and sometimes quite late in the evening someone is saying another (UNINTELLIGIBLE) for Gerhard.

BURNS: If it ain't four more years, at least you can have four more beers.

Chris Burns, CNN, Berlin.

(END VIDEOTAPE)

MCEDWARDS: All right, well, to see how the real vote plays out, you can catch special coverage right here on CNN. We will have complete coverage of the German election on Sunday, so be sure to tune in.

And that is this edition of INSIGHT. I'm Colleen McEdwards. The news continues, right here on CNN.

END

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