A Talk With Helmut Kohl's Heir Apparent

German Chancellor Helmut Kohl, who faces parliamentary elections next Sept. 27, is trailing Socialist opponent Gerhard Schroder badly in the polls. One taken in mid-March by Der Speigel magazine shows Schroder's Social Democratic Party (SPD) leading Kohl's Christian Democrats 41% to 35%. If Schroder formed a coalition with the Green Party, as expected, their combined 48% of the vote would give them a majority in Parliament.

Kohl, however, has made a career of losing in the polls but winning in the elections. To find out the latest campaign thinking, Frankfurt Bureau Chief Thane Peterson talked with Wolfgang Schauble, the Christian Democrats' No.2 and Kohl's heir apparent, in his Bonn office on Mar. 31.

Q: There has been speculation that Kohl will step down and you will take over as leader. Is that likely?

A: No. I support Mr. Kohl and we work very well together. The SPD would like us to raise a debate on that, but we won't do it.

Q: It's also said that the Socialists and Christian Demo-crats may form a "Grand Coalition" government.

A: A Grand Coalition isn't very likely.... It's a theoretical possibility. But we don't want it and the Socialists don't want it.

Q: You have been confined to a wheelchair since an attempt on your life in 1990. Would that affect your chances of becoming Chancellor?

A: I'm not running for Chancellor. If I were to run, it would be an issue. That's quite natural.

Q: Do you feel physically fit to serve as Chancellor?

A: I feel very fit to serve in my current job as chairman of the Christian Democratic faction in Parliament.

Q: What will your main policy initiatives be if the Christian Democrats remain in office?

A: Tax reform. We have a double system of income tax and corporate income tax. Some 80% of German companies have to pay income tax, not corporate tax. So both need to be changed.

Q: And you believe there will be a real chance of doing that with the SPD still controlling the Senate?

A: Yes, because we will focus our election campaign on that question. And if the voters pick us in the election, they will be indirectly expressing that they want the tax reform. The Bundesrat [Senate] will have to agree to it.

Q: What other initiatives will you take?

A: We will continue to put pressure on industry and trade unions for moderate wage increases. We will take another step in pension reform--the increase in pension payments will be slowed down. [Overall] we will reduce the public share of GDP to 48% this year, 3% lower than three years ago. We started in 1982 with 51% and achieved 45.7% in 1989. But after reunification it went up to 51%. We will lower it to 46% by 2,000.

Q: What would it mean for business if the SPD came to government?

A: Mr. Schroder says that they will modernize Germany. But the Social Democrats...say they will take back all the reforms we have made, like pension reform and higher [private contributions] to health insurance. They also want to reinstall the property tax, which we cancelled. So we say the Social-Democrats want to go backward.

Q: Who do you think will set policy if the SPD wins, Schroder or left-leaning party chief Oskar Lafontaine?

A: Lafontaine has more substance. Schroder just wants to win the election. After the election, Lafontaine will decide about the substance of policy. It will be to the left.

Q: Would it affect European Monetary Union if Schroder were elected?

A: No. The SPD approves of EMU, too. But the position of Germany within the union would be less strong because the SPD would have a less successful economic policy than we would. Most people think Mr. Kohl would be a better leader for EMU.

Q: Will EMU lead to more political unity in Europe?

A: Today the French are French, the Germans are German, and the British are very British. But having a common currency will give people much more of a feeling of being European. That creates the basis for more political unity.

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