The Wreck of the Deutschland

...And the free market dogmatists are being proved right in spades...

...Germany cannot even afford to honor its economic commitments to a common European military...

...Stoiber is actually a member of the CDU's Bavarian sister party and permanent ally, the Christian Social Union...

...Schröder has until September to find about a million jobs...

...Schulte's constituent unions have taken his message to heart...

...But with Germany receiving over half of Europe's asylum-seekers, such positions will win votes no matter how modestly or gently they're enunciated...

...Schröder's Social Democrats won the region solidly in 1998, but polls show that, were the election held today, they would fall to third, behind the Christian Democrats and the ex-Communist party of Democratic Socialism...

...No one questions that the East is where the swing voters are...

...It's true that the basic package of salary and benefits is now approaching $50 an hour for senior industrial workers, but, given the superb quality of German workmanship, Schulte opines, only a "foolish businessman" would consider that any reason to hire a Polish immigrant, or to engage in deregulation—such as keeping stores open a mere eight hours a day...

...In early February, IG Metall—one of the four unions whose wage settlements create a domino effect of upward cost-of-living adjustments for all unionized workers in the country—entered salary negotiations demanding a 6.5 percent pay hike...

...Across the façade of the CDU party headquarters on the western edge of Berlin's Tiergarten, they have draped a gigantic banner reading, "How many more unemployed, Mr...

...asks one not-with-the-program American journalist...

...In the Hamburg legislative elections the week after the World Trade Center attacks, Judge Ronald Schill (a hitherto little-known crank nicknamed "Judge Merciless") saw his new party (which no one had even bothered to name) enter the city-state's government with 20 percent of the vote...

...Moreover, as the most prominent national politician from the Neue Länder (East Germany), she was touted as the party's best chance of bringing vast new coalitions into its fold...

...Over the course of an hour, only one table gets taken—by a party of two...

...And at a time when Germany's connection to Mohamed Atta and other perpetrators of the September 11 attacks is giving citizens the jitters, tough-on-crime messages are bound to fall on sympathetic ears...

...That Stoiber's nomination will provide aid and comfort to Germany's small but worrisome hard right appears unlikely...

...Stoiber will also be helped by a record of skepticism towards open immigration...

...Free market dogmatists would say that something's got to give—that the first economy is strangling the second...

...Last week saw the release of January's unemployment figures...

...The post-Kosovo plan to jointly fund and order 73 Airbus military transport planes was the brainchild of German defense minister Rudolf Scharping...

...There is economic contraction in several regions, particularly in rural eastern Germany...

...Germany's growth rate has been at zero in recent months, dead last among the European Union's 15 countries...

...More important, Bavaria's unemployment rates are not just relatively low by German standards, but low in absolute terms—roughly 5 percent across the state, and under half that in the vicinity of Munich...

...during an interview in a Munich restaurant two years ago, he spent more time bragging about the aggressiveness with which Bavaria prosecuted racially motivated hate crimes than he did on his favorite theme of bogus asylum applications...

...The country's half-dozen leading economic think tanks, of all political ideologies, are revising their economic forecasts downward...

...The first is the Germany of the soziale Marktwirtschaft, the elaborate network of rules contrived by politicians, plutocrats, and unions to maximize wages and (thereby) quell unrest...

...At an afternoon conference for a delegation of visiting journalists in the Foreign Office in Berlin, Schulte devotes most of two hours to explaining why making the labor market more flexible would be folly for his country...

...This news came just as Schröder's Federal Labor Office was revealed to have been falsifying statistics to show vastly more new hiring than is actually going on...

...The two patrons between them order a Turkish meat pie, a cheeseburger, an iced tea, a bottle of German beer so large it practically has to be rolled to the table on a handtruck, two double espressos, and dessert...

...For Schröder is at low ebb, in a situation not dissimilar to the one Bill Clinton faced in 1994...

...They had been much dreaded, and they turned out to be far worse than anticipated...

...Now it's Germany, the economic basket case of Europe, that is closest to busting those budget caps, with deficits of 2.6 percent—so stimulus packages are out of the question...

...There were 326,400 new jobless, bringing the total to 4.29 million, and the unemployment rate to 10.4 percent...

...It was Germany that insisted in the mid-1990s on tough budget-balancing requirements for European Union member states, limiting budget deficits to 3 percent...

...What's more, in Bavaria's Minister-President Edmund Stoiber, the Christian Democrats have a candidate who plays to the moment...

...Poor Schröder: When he ended Helmut Kohl's 16 years of Christian Democratic Union rule four years ago, it was largely on the strength of a read-my-lips challenge that anyone who cannot bring Germany's jobless tally below 3.5 million deserves to get booted...

...This is the economy of the Pergamon late-night restaurant on Berlin's Friedrichstrasse a block north of Unter den Linden, the Times Square of Central Europe...

...Stoiber won the nomination in a hard-fought backroom battle against the CDU's most popular politician, party chief Angela Merkel...

...Merkel is respected inside and outside the ranks for her cleanup of various Kohl-era financial scandals...

...If Schröder can either create or (more likely) credibly promise such jobs, he will be reelected...

...Somehow, that's supposed to pay the rent, buy the food, and compensate the four Turkish-looking immigrants who toil there...

...How about customer convenience...

...In a recession economy where daily wages approach the average annual income of Malaysians, that will be quite a task...

...On the contrary, he provides enough of an alternative to Schröder to slow the movement to splinter parties, which tend to drum up recruits around ad hoc grievances in the months before elections...

...If he wants to, a customer Christopher Caldwell is a senior editor at THE WEEKLY STANDARD...

...Now the Christian Democrats are singing that same tune...

...Perhaps the system's typical product is people like the complacent and visibly well-fed Dieter Schulte, president of the Deutscher Gewerkschaftsbund—Germany's equivalent of the AFL-CIO...

...There are, in fact, two Germanies even today, but the frontier that runs between them is economic rather than geographical...

...He's in deep trouble because his country isn't as reunited as it looks...

...Like Clinton, he is a deft enough politician that no one should count him out...

...Europe complicates the Social Democrats' problems...

...alongside a tally updated daily...

...But under the circumstances, the party reckoned the Neue Länder would take care of themselves...

...Unemployment is at 20 percent in parts of the old East—quite a feat, considering that the region's cities on average have lost a third of their population in the last decade...

...can generally get to the stores during regular working hours," Schulte replies...

...The contract is on hold...

...But given the dire state into which he has driven the economy, deftness may not count for much...

...Under Stoiber's stewardship, Bavaria has maintained booming automotive and agricultural sectors, and has led Germany's economy into new sectors such as biotechnology...

...The bill comes to seven Euros, five dollars and change...

...The second Germany is that of the less formal sector—the one that escapes elaborate regulation...

...Cut off from the memories of church and union hall that create multigener-ational party loyalties among western voters, they tend to embrace a fairly simple throw-the-bums-out ethic...

...He is not the xenophobe that he's often cast as in the foreign press...

...But now that Germany's seven partner states have approved the deal, Germany is $3 billion short, and finds it politically impossible to vote the remaining money...

...But after Helmut Kohl's nation-sweeping landslide in 1990, the year of unification, eastern voters have become predictably unpredictable...

...If he can't, the international center-left—whose ascendancy over Western democracies began to crumble with the election of Bush, and continued with Silvio Berlusconi's rise to power in Italy— will take another casualty...

...BY CHRISTOPHER CALDWELL Berlin GERMANY'S Social Democratic chancellor Gerhard Schröder, the first leader to enter office since the country was reunited in 1990, faces reelection in September, and he's in deep trouble...

...Schröder and Stoiber have both done their splashiest early campaigning there...