Policy Statement by Chancellor Gerhard Schröder, November 10, 1998
Esteemed ladies and gentlemen,
For the first time in the history of the Federal Republic, the absolute vote of the electorate has brought about a change in government.* Voters have called on the Social Democrats and Alliance 90/The Greens to lead Germany into the next millennium. This change is an expression of both democratic normalcy and a mature democratic consciousness. We can be proud that the people of Germany have dealt a clear rejection to right-wing extremism and xenophobic tendencies.
At this point, I would once again like to thank my predecessor, Dr. Helmut Kohl, for all his work and for his graciousness in handing over the office.
Tremendous tasks lie ahead of us. The people expect better policies for Germany. We know that everything starts with economic strength. And we need to:
– modernize the government and the economy
– restore and ensure social justice
– strengthen the “European House” economically, socially, and politically in such a way that the common currency will be able to succeed
– promote Germany’s internal unity
and most importantly, in all of this [we need to]:
– make sure that unemployment is reduced, that existing jobs are maintained and new jobs are created. For this, we need new enterprises, new products, new markets. We need faster innovation, better training, and tax and excise duty policies that relieve the burden on labor.
This federal government will shoulder the problems. And it will mobilize the creative forces in our country. Our starting conditions are anything but favorable. The previous administration by no means left us a “well-ordered house.”
The results of our preliminary financial check-up reveal the gravity of the situation. The federal debt has been driven up to more than a trillion Deutschmarks (DM). The current federal budget is burdened with interest obligations in excess of 80 million DM. This means that one in four Deutschmarks collected by the federal government in taxes must be spent on interest payments. Budgetary risks in the billions were ignored.
Revenues were overestimated and expenditures underestimated. For years, the budget was balanced only through one-time effects whose impact vanished quickly. But the major budgetary burdens, the significant structural problems of the federal budget, were simply put off for the future.
* The need to form coalitions between (at least) two parties to gain a majority in the Bundestag has encouraged the splitting of votes and has given party leaders some leeway in negotiating coalition partners. In 1998, the defeat of the incumbent parties CDU/CSU and FDP was so decisive that the only feasible government coalition was between Alliance 90/The Greens and SPD. In addition, for the first time, the coalition was an altogether new one; no previous coalition party (in this case CDU/CSU and FDP) entered the new coalition. Therefore, this time the voters and not the maneuvering of party leaders determined the future coalition government – eds.