The Social Democrats are using their control of the Bundesrat (upper house) to stymie Chancellor Helmut Kohl's economic initiatives. On Nov. 30, the SDP, taking a populist stance, torpedoed Kohl's pro-business tax reforms as well as a plan to streamline the Bundesbank. The political gridlock is shaking business confidence and diverting Kohl's attention from European issues. Bonn is starting to look like Washington on the Rhine.

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