Where Kohl Is Faltering
Alas, poor Helmut Kohl. He has been successful in foreign policy, but not at home. Reunification and the integration of Central Europe back into the West under Germany's wing--the Chancellor's twin achievements--are providing a bonanza for top-tier German multinationals. But Kohl's inability to push his domestic economic reforms is leaving smaller companies and most workers unable to benefit from Germany's big new backyard.
The pity is that his program to restart growth at home is a good one. His proposals to cut taxes and trim a lush welfare system are sound. But anarchy within his administration and opposition in Parliament are undermining the chance of Kohl's plan passing. Finance Minister Theodor Waigel, for example, is calling for a VAT increase of two percentage points to cut the budget deficit at a time when Kohl is calling for top corporate and personal tax rates to drop to 40%, from 53%.
He gets more sympathy when it comes to his original idea of sweeping away the thousands of tax breaks in favor of a simpler system. Special interests are balking--from individuals who want to retain their deductions for commuting to labor unions who want to keep their deductions for dues.
Under pressure, Kohl is now backsliding. It appears easier for him to negotiate the entry of Central European countries into NATO and the European Union than to push forward domestic economic reform. For Germany's sake, this must stop. The country desperately needs a leader who will tell the people the untarnished truth--Germany is living beyond its means and must reform itself.