This decision stems from the inability of Germany’s rulers to drive forward fast enough in making substantial cuts in social programs such as unemployment insurance and welfare, which the capitalist class needs to shore up declining profit rates and compete more effectively with U.S. and other capitalist rivals. This crisis has its roots in the German rulers’ inability to swallow the former German Democratic Republic in the East. Since the 1990 reunification, Berlin has been saddled with huge annual outlays to pay for social programs in the East in order to avoid a social explosion.

Schröder‘s governing Social Democratic Party (SPD) has pushed through initial “reforms,” that is, cuts in the social wage, which do not come close to what German capitalists need. While surveys indicate the declining popularity of the SPD, the party’s leadership is hoping that early elections will give them the best chance to return to power on the federal level and use an electoral victory as a mandate to accelerate the attacks on the working class.

Schröder’s announcement followed a major defeat for the Social Democratic Party in the regional vote held in the country’s biggest state, North Rhine-Westphalia. The SPD had held power in this heavily industrialized region for the past 39 years. As on the national level, the government there has been run by an SPD-Green coalition. The Christian Democrats won nearly 45 percent of the vote, the Social Democrats 37 percent, and the Greens and rightist Free Democratic Party each received about 6 percent.

Schröder’s electoral maneuver involves setting a vote of confidence in parliament, which is expected July 1. If the government loses the vote as planned, parliament will then be dissolved and new federal elections will be set.

“With this bitter election result for my party in North Rhine-Westphalia, the political support for our reforms to continue has been called into question,” Schröder said in announcing the plan for early elections.

Schröder’s Agenda 2010 “reform” program, which he announced after winning reelection in 2002 by a narrow margin, targeted cuts in unemployment and social welfare benefits. This year he has also promised to cut the corporate tax rate.

A new law that took effect in January limits the payment of jobless benefits to 12 months, after which those still unemployed receive a greatly reduced amount in welfare payments. Before implementation of this law, unemployed workers were paid 60 percent of previous earnings for the first 32 months they were out of work, and 55 percent thereafter. The long-term jobless are now also forced to take workfare-type jobs paying one or two euros per hour or lose welfare benefits altogether.

The official unemployment rate in Germany is now at a post-World War II high of 12 percent, with more than 5 million people officially listed as being without jobs. In the eastern part of the country 20 percent of the workforce is unemployed.

Since 1990 the German rulers have been compelled to pour more than $1.5 trillion into the eastern section of the country in an effort to spend their way out of a showdown with workers and farmers there. Three-quarters of these funds have gone to cover the cost of pensions, unemployment benefits, make-work projects, and other social programs. Berlin has had to borrow massive sums to finance these outlays.

Rather than ushering in a period of greater power for the German bourgeoisie, the reunification of the country has resulted in its relative weakening in relation to its rivals, with flat economic growth, skyrocketing government debt, and persistent high levels of unemployment.

The Green Party, which has been in government coalitions with the SPD since 1998, is “in a mess,” noted a May 25 International Herald Tribune article. “The Social Democrats are divided over running any election campaign on a red-green ticket. But so are the Greens. Each feels damaged by each other’s policies.”

Fueling this conflict are disagreements over how fast to move on the so-called reforms. The Greens “want social and economic changes to go much farther while the left-wing of the Social Democrats want to slow down the reforms because of rising unemployment,” the Tribune article reported. “Indeed younger and more leftist Social Democratic parliamentarians…have often blamed the Greens for the growing unpopularity of [their] party because the Greens want further reforms.”  
 
 
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