(Photo: An imam leads prayers at a mosque in Dortmund on German Unity Day, October 3, 2010./Ina Fassbender)
German President Christian Wulff said Sunday that Islam had a place in Germany, during a speech celebrating two decades of the country’s reunification.
The president, who holds a largely ceremonial position but is considered a moral authority for the nation, used the televised ceremony to wade into a debate over immigrant integration that has captivated public attention for weeks.
As the German election approaches and with it a chance he may not hold onto his job, Finance Minister Peer Steinbrueck took a long shot this week to try and boost his legacy as the man who took on the tax dodgers and won. While some of the new rules he proposed in a now trademark campaign against tax fraud failed to pass, the 62-year-old Social Democrat can only have boosted his popularity with voters and upped his chances of holding onto the Finance portfolio after the September 27 vote.The idea was to give the Finance Ministry a “free hand” in drawing up its own list of countries and jurisdictions it deems uncooperative in efforts to crack down on tax evasion. Finance would thus have a bigger stick to wield as it signs new bi-lateral tax agreements next year, since the threat of sanctions on operations in Germany would have been immediate and easier to execute without the hurdle of consensus in Berlin. Or so the thinking went.The proposal managed to stand its ground for a day. After supporting the plan on Monday, the Finance Ministry was forced to retreat under a hail of criticism from business lobbies, and when cabinet outlined its new procedures on Wednesday, it was clear that any future sanctions decisions will also have to be agreed by the Foreign and Economy ministries.Steinbrueck has led Germany’s drive to stamp out international tax evasion with a swagger that’s made many a headline. So whatever happens come election day, the public will likely remember him for the provocative image he cultivated. Who can forget last year’s call for a “carrot and stick” approach to Switzerland over the tax issue, and to his comparison of Germany’s southern neighbour to “Indians” running scared from the cavalry – presumably Steinbrueck himself. Or captain-of-industry Klaus Zumwinkel, once chief executive of Deutsche Post, who had his house raided as part of a tax-dodging probe. Liechtenstein, the tiny Alpine nation where he had hidden money in a trust, signed a tax information deal with Germany in July.Had Steinbrueck’s plan been approved, it would have effectively given the Finance Ministry a fast track to impose sanctions that would have extended to future occupiers of the office. In that sense it was a bold gamble, although one probably doomed to failure from the start. While the threat of sanctions is essential to push rampant offenders in line with OECD tax transparency standards, it’s hard to imagine a central government granting one of its cabinet positions – potentially occupied by an anti-tax evasion crusader – carte blanche to fight independent battles.Steinbrueck took on the finance job with plans to balance Germany’s budget by 2011. At one point, before the financial crisis sent that idea to the shredder, it had even looked possible for 2008. What’s left for legacy is the battle against tax fraud. With the OECD guidelines he championed now seen internationally as close to sacrosanct, Steinbrueck’s reputation looks secure. But the cavalry will not have free reign.
It may not be legislation, but a recently passed “pension guarantee” has re-kindled debate over a pillar of Germany’s welfare state – the notion of “inter-generational justice”.The agreement, which basically calls for nationally funded retirement benefits to be locked in at current levels for all eternity, has not gone down as smoothly as its sponsors would have liked, since many nowadays see the country’s sagging birth rate as a sign coming generations will struggle to support their predecessors in old age. Two years ago when elections were far off, the government headed in a different direction, deciding to gradually expand the retirement age to 67 from 65 in order to offset both the birth rate and rising life expectancy.While the agreement had already been supported by both parties in the awkward left/right governing coalition, some policymakers cried hypocrisy last week when it passed a final hurdle in parliament.Outspoken Finance Minister Peer Steinbrueck kicked off the generational sparring when he called the agreement “absurd” and pointed out that the current generation of pensioners is doing better than any other in the past. Increases in retirement benefits outpaced salaries in July in one of their fastest jumps since reunification almost two decades ago, he noted. The statements could hardly have pleased his fellow SPD party member Frank-Walter Steinmeier, the Social Democrat candidate for Chancellor who had supported the idea.Economy Minister Karl-Theodor zu Guttenberg, a rising star from the conservative CSU/CDU bloc also took his own pot shots at the agreement, calling it nothing but a “pure declaration”.Underlying these comments and others that followed in a succession of headlines lies Germany’s demographic time-bomb. With one of the world’s oldest populations and a birth rate among Europe’s lowest, the theory goes, benefits will have to be cut as the number of contributors to the pension system falls and the number of recipients rises.There is a possible alternative – but it would involve substantial tax hikes at a time when the opposite is in vogue. With companies are all too eager to move to countries with low taxes, cheaper labour, and fewer questions asked about social responsibility, a tax hike of this order looks like a no-starter for politicians trying to keep the economy competitive.Thus arises the question of fairness between generations, or Generationengerechtigkeit. Why should this generation of workers pay for relatively lavish packages next to which their own retirement will probably pale in comparison? How fair can such a system be? Steinbrueck himself has said: “The ones being pinched are the 25- to 35-year-olds who want to have children.”“People will always be making babies,” goes the famous quote from an architect of the current system, Chancellor Konrad Adenauer. But even back then in 1957 when the idea was fresh and German demographics were in a fruitful postwar upswing, some had voiced warnings. Now, with the economy floundering in its deepest recession since the war, the greatest test for “dynamic pensions”, as they were called back then, could lie in the years ahead.Agreement aside, pension rules are already locked in for the coming years. And with the September election just around the corner, politicians may try to sweep this one under the carpet. But with some 20 million German retirees getting ready to vote, it’d be interesting to keep an eye on the polls to see which party is seen as a stronger defender of pensioners.