Magazine article Newsweek

Dropping the Pilot : Now Schroder Has Only Himself to Blame

Magazine article Newsweek

Dropping the Pilot : Now Schroder Has Only Himself to Blame

Article excerpt

A British tabloid crowned him "the most dangerous man in Europe." Other critics called him "Oskar the Red." An unabashedly leftwing Finance minister in a new German government that was trying, without much success, to establish its pro-business credentials, Oskar Lafontaine often seemed to overpower his boss, Chancellor Gerhard Schroder. So there was rejoicing in boardrooms and stock exchanges across Europe last week when Lafontaine suddenly quit.

He did a thorough job of it. In three terse letters, Lafontaine, 55, gave up his cabinet post, his leadership of the ruling Social Democratic Party (SPD) and his seat in Parliament. The day before Lafontaine's resignation, Schroder reportedly complained at a cabinet meeting that "anti-business" policies were being foisted on him by his team and hinted that he might resign himself. When Lafontaine quit instead, Schroder denied that he had forced him out; Lafontaine refused to say anything at all; Schroder also denied that he planned to make any radical changes in the course that his left-wing pilot had helped to chart. "There is no crisis," he said.

Spoken like the disappointingly bland chancellor Schroder has become. He entered office last fall promising a politics of a "New Middle" that would energize the German economy. But from the start, he allowed Lafontaine to undercut business-friendly economic reforms. Lafontaine endorsed tax reforms that would close lucrative industry loopholes. He wanted to impose controls on currency markets, and he pushed so hard for the European Central Bank to cut interest rates that he antagonized even those who agreed with him. …

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