SocialismToday           Socialist Party magazine

Issue 72, February 2003

Crisis and Class struggle in Germany

Two months after the re-election of the Red-Green coalition government, Chancellor Gerhard Schröder threatened to resign. ‘Anyone who thinks they can do a better job should go ahead and do it’, he told the executive committee of the Sozialdemokratische Partei Deutschlands (SPD) on 10 December. The coalition faced another test in elections on 2 February, one of them in Schröder’s home state of Lower Saxony. ARON AMM, from Sozialistische Alternative (SAV – the CWI’s Germany section), reports from Berlin.

ECONOMIC CRISIS, a wave of bankruptcies and redundancies, record debt and financial collapse, industrial action in the public sector, and demonstrations against war preparations have engulfed the country. The government and ruling capitalist class are in open conflict over what to do. Militancy among workers, the unemployed and young people is gaining pace.

Germany is the third largest economy in the world and number one in the European Union, contributing 20% of EU gross domestic product (GDP). But what was once an economic giant is now wobbling. This year it is likely to find itself bottom of the EU table for GDP growth, the fourth year in a row. The collapse of the stock market also overshadows that witnessed in any of the other leading economies. Between January and October 2002, the Deutsche Aktienindex (Dax – the share index of the 30 largest companies on the Frankfurt stock exchange) dropped by 48%. The Dax has recovered slightly since then, but has been unable to reverse these losses so far.

This economic crisis poses a serious threat to the future of the European Monetary Union. The level of public debt in 2002 was 3.7% of GDP, significantly above the 3% limit allowed by the EU ‘growth and stability pact’. This year the target will be met only if the German economy grows by 1.5%, a level that all economic research institutes regard as illusory. Germany is the fourth EU country – after Greece, Italy and Belgium – to amass a national debt in excess of the permitted 60% of GDP (62% in 2002). The national debt – massively increased by the cost of reuniting West and East Germany after 1989 – more than doubled during the 1990s, reaching €1.2 trillion (£800bn). A landslide from this mountain of debt is already cascading towards taxpayers – €170 million (£113m) every day, just to pay the interest.

Investment in Germany has been decreasing since 2000 and consumer spending has collapsed. Only the export market, which accounts for one third of the German economy, has averted a deep recession (in the car industry, which employs 750,000 people, the figure rises to 70%, underlining Germany’s dependence on the US market). Industrial production declined by 2.1% in October 2002, having already decreased in September. ‘Negative growth’ of industry is expected for the fourth quarter of last year. Whereas 37,000 companies went bust in 2002 – including large firms such as Kirch Media, Babcock, Fairchild Dornier and Herlitz – the projection for this year is 42,000. This wave of bankruptcies has cost 650,000 jobs. Official unemployment stands at 4.2 million.

‘The money isn’t gone – it’s ‘just’ somewhere else’, read a homemade placard during the first warning strike on 11 December in the capital, Berlin, at the beginning of public-sector pay negotiations. Under the Red-Green government, corporation tax has been transformed from a tax on business to a subsidy. In 2000, it raised €25 billion (£17bn), but in 2001, €400 million (£270m) was paid out to large companies. A nurse or a refuse collector has to cough up more taxes than DaimlerChrysler or BMW! BMW is the largest industrial company in Munich, making a net profit of €1.1 billion (£730m), yet Munich, the third largest city in Germany, is bankrupt. Local councils such as Offenbach in the state of Hesse are planning to privatise 88 schools, ‘after the British example’, to reduce public spending.

Dismantling social security

"THE TWO MEN who lead the country, Gerhard Schröder and Joschka Fischer, can’t decide how [to deal with the crisis]. Highly contradictory messages are sent to the people. One says: the situation is serious, we have to do some difficult things, but we will protect you from fundamental changes. Germany can, in principle, stay like it was. Doing without certain things is a temporary phenomenon. That is the signal from the Social Democrats and the trade unions.

"The other says: the situation is serious, we have to do some difficult things, but the really fundamental reforms have yet to come. Germany will never be the same again. The – limited – sacrifices will be permanent". (Tagesspiegel, Berlin, 11 December 2002)

Although the government and big business are publicly arguing over what measures to take, Schröder’s cabinet is bowing to the interests of the ruling class: "The miracle is not a normal category in politics. But what is happening among the German Social Democrats is a break with all previous experience of Berlin political life. Suddenly, the SPD accepts everything that for years was denounced as capitalist demonism". (Handelsblatt, 13 December 2002)

What this mouthpiece of medium-sized business describes as a ‘miracle’ is really a confirmation of the analysis Marxists made during the 1990s: that the SPD – just like the Labour Party in Britain – has changed from a workers’ party with a capitalist leadership into a bourgeois party through and through. The SPD and Die Grünen (the Greens) are attempting to load the burden of this crisis onto the backs of the working class. It’s not about ‘limited sacrifices’, it’s about unlimited cutbacks. The ‘welfare state’ is to be dismantled. If the plans become reality, Germany will indeed ‘never be the same again’. All the social rights that were fought for and won by the labour movement during the era of Otto von Bismarck in the last third of the 19th century are under attack.

The government aims to implement the Hartz Commission recommendations on employment rights: means-testing unemployment benefit, increasing temporary work with pay cuts of 20-30%, and removing protection against unlawful dismissal. The government has set up the Rürup Commission, made up of representatives from the government, business and trade unions (as was Hartz) to draw up cuts to social security, introduce a two-tier health service, and increase the retirement age. Shop workers’ pay and conditions are to be undermined by extending shop opening time on Saturdays from 4pm to 8pm. National collective wage agreements are being replaced with local deals.

The capital is the trailblazer. The Berlin city government of the SPD and the Partei des Demokratischen Sozialismus (PDS – successor of the former Stalinist state party in East Germany) has left the national association of local authority employers and has cancelled collective wage agreements. It has increased civil servants’ and teachers’ working hours by two hours a week and is cutting back on 950 crèche staff in education.

Never before has a German government suffered such a dramatic collapse in support during its first 100 days in office. An opinion poll from the Forsa Institute on 4 December, found that the SPD would only get 27% of the vote in an election (on 22 September it got 38%). "I’m glad to be back in Berlin under the glass dome [of the Bundestag], in the constituency all I get is abuse", said Wolfgang Grotthaus, SPD representative from Oberhausen, in the weekly political magazine Der Spiegel (9 December 2002). If there were an election today, 40% of those who voted SPD in September would stay at home.

The Schröder/Fischer government has also hit a crisis in foreign policy. The government granted the US use of military bases in Germany and the right to over-fly German airspace, and has co-operated with war preparations. However, the Red-Green government is publicly split. The rightwing of the SPD, organised around the Seeheim Group, is already considering the possibility of a Grand Coalition with the conservative opposition Christlich Demokratische Union (CDU), with the SPD economy minister, Wolfgang Clement, replacing Schröder as leader. Ministers publicly stab each other in the back. The Greens shot down their party leaders at their conference in December.

The Unified Service Sector Union, ver.di (Vereinigte Dienstleistungsgewerkschaft, made up of public-sector, transport, finance, media, telecom, print and shop workers), organised a demonstration in Bremen on 5 December, during the public-sector wage round. Speakers were repeatedly interrupted by shouts of ‘Eichel must go’. These slogans, aimed at the SPD finance minister Hans Eichel, are reminiscent of the ‘Kohl must go’ shouts on demonstrations in the mid-1990s which, in 1996, culminated in 500,000 workers marching in Bonn – then Germany’s seat of government – spontaneous strikes involving 100,000 metalworkers defending their right to sick pay and, in 1997, road blockades by miners in the Rhine and Ruhr. Then, the trade union bureaucracy managed to smother the protests by raising the possibility of a change of government in the general election of 1998. Today, it lacks that room to manoeuvre.

The class struggle

DECEMBER’S WARNING STRIKES mobilised 250,000 workers. Union leaders were forced to adopt a more radical tone. For example, the head of ver.di, Frank Bsirske, said in numerous speeches: "What we don’t need is savings for Gloria [von Thurn und Taxis] and the Holtzbrinck family with an estimated family fortune of five to six billion euros". In Hesse state parliament, the CDU minister-president, Roland Koch, compared the union campaign for the reintroduction of a wealth tax, which would raise €15 billion (£10bn), to the persecution of Jews under the Nazis: "Stop misleading people that it would only affect a few rich people. The way Mr Bsirske did it on television yesterday, naming the names of individuals, was like putting some kind of new star on their chest saying: ‘they are the rich, the ones who should pay’."

The Frankfurter Allgemeine Zeitung, the leading German capitalist newspaper, distanced itself from "an improper comparison, because the persecution of Jews under Hitler bares no comparison. Koch’s later apology was compelling". But it went on to defend making ‘parallels to other times’ to ‘instruct today’s politics’: "If Koch had in his speech recalled the beginnings of the class struggle, no one would have been entitled to get angry, certainly not in those parties whose intentions in this regard are not entirely distant from this. That struggle also started with accusations against the rich". (13 December 2002) These reactions at the beginning of the dispute display the first beads of sweat on the foreheads of some ruling class representatives.

Working-class action had begun before the pay round. Throughout 2002, one sector after another took part in warning strikes (retail, printing, banking, in the postal service and at Telekom) and more militant action (in the metal and building industries). This was remarkable given that it occurred during an economic downturn and directly before a general election. The stoppages in the building sector were particularly noteworthy, as this sector has been gripped by crisis since the middle of the 1990s.

The disputes are nowhere near the same level as in Spain, Italy, Portugal or Greece. Nonetheless, the German working class is the most powerful on the continent due to the dominance of industrial production in the economy. The ruling class has not attempted a head-on clash comparable to that in Britain under Margaret Thatcher, with her onslaught against the miners and the British labour movement during the 1980s. Even though the attacks have accelerated, conditions in Germany are far better than in most other leading capitalist countries. The metalworkers’ union, with 2.5 million members, is the second-largest trade union on the planet, after ver.di. The trade union umbrella organisation, the Deutscher Gewerkshaftsbund (DGB), has eight million members.

The increased militancy, however, is on a collision course with the acquiescence and sell-out of the trade union bureaucracy. The limited nature of the struggles so far is not down to a lack of anger or determination, but the fear within the union leadership that it may not be able to control more widespread disputes.

Nonetheless, the cauldron is boiling so much that it is increasingly difficult to stop fighting measures being taken. Due to the extent of the economic crisis, attacks on workers’ living standards, disillusionment with the government and the role of the trade union leadership, the consciousness of the working class will develop in leaps and bounds. Other international disputes, which union leaders avoid mentioning, are a source of encouragement. In Bremen, fire-fighters carried a banner with the message: ‘An English labour struggle is possible here too! We’re ready! And that’s a promise!’ A warning strike by kitchen staff in a Stuttgart hospital was marked by the strikers singing the Italian revolutionary song, Avanti Popolo. Furthermore, opposition is mounting to military expenditure, which has multiplied tenfold under Red-Green governments.

The compromise deal

A LARGE-SCALE strike movement was avoided when the public-sector pay round ended in a compromise well below the union claim for ‘more than 3%’. The union leadership conceded ground on pay for workers in the East, on ‘opening clauses’ which allow for the renegotiation of previous agreements, and on breaking national collective bargaining.

The extent of the developing radicalisation was shown by the willingness of civil servants to take action. The majority of teachers, police officers and fire-fighters are considered as ‘state servants’ (BeamtInnen) with no right to strike. The German civil service association, which is not affiliated to the DGB, organised a 40,000-strong demonstration in Berlin on 14 December. And at the earlier demonstration in Bremen, union members distributed mock certificates with the inscription: ‘We hereby award the civil servant …… the right to strike from now on and for the rest of their life’.

The public-sector employers’ room for manoeuvre was limited due to the record debt in a growing number of local authorities. At the same time, the trade union leadership was under increasing pressure from below for action. Ver.di has also been losing members – 80,000 last year alone.

Bsirske has attempted to distance himself from previous trade union leaders. "‘That man is not to be envied’, or ‘I wouldn’t want to be in his shoes’ - that’s what other union leaders are saying about him. In ver.di’s predecessor union, ÖTV, it was anger from the membership at the results of pay rounds that, at least indirectly, cost union leaders Wulf-Mathies and Herbert Mai their positions". (Handelsblatt, 10 December 2002) Wulf-Mathies ignored the majority vote of the membership to reject a compromise and continue a two-week strike in 1992. Mai was forced out during the bureaucratic merger of several unions to form ver.di in 2000.

Der Spiegel recalled an even earlier public-sector wage dispute: "The legendary wage round of 1974 has not been forgotten, when the heavyweight trade union leader Heinz Kluncker forced through a wage increase of 11% for public sector workers - and in doing so spelled the beginning of [SPD Chancellor] Willy Brandt’s political demise". (9 December 2002)

The warning strikes proved that the workers are prepared to confront the bosses. And despite the settlement new conflicts are developing. In Berlin, strikes in the public sector are a strong possibility. In the current city-wide pay negotiations, SPD and PDS politicians are demanding pay freezes or cuts, and reduced holiday entitlements and Christmas bonuses. But not for all. Bus drivers and the city’s cleaning staff are to get the national deal. The intention is to split the working class and even to provoke weaker sections into taking action with the aim of breaking union resistance. Protests could take place by public-sector workers against pay cuts, by civil servants and teachers against longer working hours, and by child-care workers against the crèche staff cuts.

This could have important repercussions for the workers’ movement nationally. A success for the SPD/PDS government in Berlin would encourage politicians and employers in other parts of the country to step up their attacks. On the other hand, a determined fightback in the capital would give the workers valuable experience, raise class consciousness and confidence, and could motivate militancy in other sectors.

The bad compromise accepted by the national leadership of ver.di and its derailment of the strike will deepen the polarisation within the union, which has been fuelled by ten years of internal conflict. The ‘network for a fighting and democratic ver.di’, a national opposition group in the union in which members of SAV play an important role, will have a pivotal part to play.

SAV holds the view that the attacks by the government and the ruling class, alongside the looming war against Iraq, require a mass mobilisation. SAV calls for a national trade union demonstration and the preparation of a one-day general strike. SAV supports the call for the massive involvement of the trade unions in the national anti-war demonstration on 15 February and raises a socialist alternative to the capitalist crisis, linked to the slogan of building a new workers’ party.

There will also be increased interest in class struggle oriented and anti-capitalist ideas among larger sections of workers and young people. This radicalisation will express itself chiefly in the form of trade union and social protest, and the developing anti-war movement. And out of the upcoming struggles, we could see the first signs of the development towards a new workers’ party.

Translation: Sean McGinley


Home About Us | Back Issues | Reviews | Links | Contact Us | Subscribe | Search | Top of page