Germany: Class struggles ahead draw parties closer together

Set up in the aftermath of the Second Imperialist War with the approval of the Western Allies, the German Constitution of 1949 is in many ways the ‘model democracy’, specifically designed to facilitate consensual, centrist politics, extinguishing any meaningful opposition between the classical left and right wings. Only once in the history of the German Federal Republic (BRD) has a single party governed – the 1957 administration of Konrad Adenauer, who fought that year’s election under the slogan, ‘No experiments’, in other words, an explicit rejection of anything that could be regarded as ‘radical’ even within the narrow confines of bourgeois democracy. With this exception, administration of the BRD has been based on a coalition either between one of the two large parties and a minor mainstream party (usually the liberal FDP) or else a ‘Grand Coalition’ of the centre-right CDU-CSU and the centre-left SPD.

Campaigning for the parliamentary elections of September 2013 was nevertheless a particularly vacuous affair, even by German standards. Neither of the candidate chancellors, Angela Merkel and Per Steinbrück, could find anything of substance to disagree about. In order to stir some modicum of interest in this farce of an election, Angela Merkel paid a grotesquely cynical visit to the former concentration camp at Dachau, to draw attention to an alleged far-right threat to democracy (in fact votes for the far-right NPD barely registered, at 1.3%).

The outcome will be another Grand Coalition, the final details of which are being thrashed out between the main parties at the time of writing, subject to a vote of the SPD membership in mid-December.

The main loser in the election was Angela Merkel’s former partner in government the liberal FDP, a party whose programme of tax cuts for the rich did not sit well with the need to sell austerity to the working class. For the first time in history, the FDP failed to gain the 5% share of the vote needed to secure parliamentary representation. In fact, the main beneficiary of the FDP’s worst electoral result since 1948 was Angela Merkel, who won 2.1m of the 3.8m votes lost by the liberals. A new force in German politics, the Alternativ für Deutschland, a party of swivel-eyed economics professors who, despite (or perhaps because of?) their lifelong study of economics seriously believe that the answer to capitalism’s crisis is to break up the Eurozone, picked up a further 430,000 of the FDP’s votes.

The other mainstream parties, the Left (Die Linke) and the Greens, also suffered setbacks. The Left – a merger of the former ruling party of East Germany and some leftist social democrats, fought the election behind the slogan, ‘Revolution? Nein!‘ with the aim of distancing itself as far as humanly possible from the glories of Red October. Its leadership wants to present the party as salonfähig – i.e. acceptable to polite bourgeois society. The Left has also gone out of its way to make clear that it will not present any obstacles to future German involvement in imperialist wars. A recent book by the leftist Welt Trends think-tank called for a more ‘sensible’ approach to foreign policy, including support for NATO.

Alas, all to no avail: the Left lost 12 of its seats in the Bundestag. Moreover, while the overall balance of seats made a broad-left coalition of SPD, Greens and the Left a mathematical possibility, the SPD has ruled this out, preferring to be the junior partner in a Grand Coalition rather than the senior partner in a leftist administration.

The Green party also took a hit in the elections, down from the highs it achieved on the back of fears stoked by the Fukushima nuclear disaster. Its policies are in any case out of sync with the current economic climate. Big business is balking at the additional burden of ‘green energy’, the cost of which is mainly being borne by the public in the form of higher fuel bills and prices. It too is now discarding some of its cherished principles and left-leaning leaders; the Green Party energy minister for the state of Schleswig Holstein commented that the Greens lost the election because they are widely dismissed as a ‘schoolmarm party’ seeking to ‘morally enlighten humanity’. Its openly pro-business wing is now in the ascendant.

The economic background

There are clear economic drivers behind the formation of a centrist Grand Coalition: the need for further sacrifices at the altar of capitalist profit – a hard sell to an already stressed and exploited workforce.

Viewed from countries with double-digit unemployment, Germany’s economy may appear to be in good shape. In fact however, many of its leading industrial concerns are suffering a fall in profits and have warned of the need for further cost-cutting measures.

Lanxess, the speciality chemicals maker, reported a 95 per cent drop in second-quarter net profit and abandoned its 2014 profit guidance. Salzgitter, the German steel producer, said that it would make a €400m full-year pre-tax loss ‘in view of the persisting structural crisis in the European steel industry’.

In July, Siemens, Germany’s biggest engineering company by sales, cancelled its operating margin guidance for 2014. And BASF, the world’s biggest chemicals maker by sales, likewise cautioned that its full-year earnings target had become ‘significantly more challenging’.

Volkswagen, one of the world’s three largest auto manufacturers (it owns the Audi, SEAT, Porsche and Skoda brands and truck makers MAN and Scania as well as VW) reported third-quarter sales roughly in line with expectations but analysts doubt whether it will achieve its profit forecasts.

Major companies in service sectors such as banking and software have also been feeling the pinch while the television manufacturer Loewe recently filed for bankruptcy and dismissed a third of its workforce.

While all of these companies put the blame on the world economic slowdown, this is largely belied by the fact that overall German factory orders are relatively healthy (up by 3.8% month-on-month in June 2013).

German companies are in fact investing massively in new technologies and manufacturing techniques in order to stay ahead of international competition by reducing costs. For example, Volkswagen has invested billions in a new MQB (Modularer Querbaukasten) production architecture which, it is claimed, will reduce the labour time required to build a car by 30%. However, only living labour can produce the surplus value that is the basis for capitalist profit, so while these drives to reduce production costs may help German companies to sustain sales, it will put further strain on profit margins. Such is the fundamental contradiction of the capitalist system!

German big business needs the backing of a strong political establishment and the cooperation of the unions to confront these structural challenges. The working class will feel the pain in a number of ways.

First, the leading industrials will try to squeeze the hugely important German Mittelstand. This is not merely the classical petty bourgeoisie but rather medium-sized companies with a turnover of up to €50 million and up to 500 employees, which service the large industrials, for example with capital goods, outsourced services and with second, third and fourth-tier production for big-name brands such as VW, BMW and Mercedes Benz. According to some studies, Mittelstand companies employ 70% of Germany’s workforce. However, they contribute only 50% of its gross domestic product.

Regardless of who actually votes for them, the FDP has historically been the main party representing the Mittelstand with its focus on lower taxes, less ‘red tape’ and ‘more flexible’ (i.e. cheaper) labour.

Naturally it will be workers in these companies who will be asked to absorb the squeeze from the big corporates, through pay freezes, reduced working hours on less pay and layoffs, all of which effectively mean an increase in the rate of exploitation.

In order to deal more effectively with the more organised workers in the larger industrial concerns and the public sector, the German bourgeoisie will require austerity measures such as the imposition of pay norms below the rate of inflation and a reduction in the social wage.

A goal of the Grand Coalition is to reduce government debt (currently around 80% GDP) but the CDU-CSU has rejected in advance any talk of the Grand Coalition increasing taxes on the rich and corporations. It is therefore inevitable that the SPD will have to jettison its modest election promises such as increased old age pensions and gender equality in the workplace. It will, however, hold fast to its promise to increase the minimum wage – a totemic gesture to reassure its left wing, because in fact the minimum wage will only serve to establish a benchmark enabling employers to drive down wages. The SPD will count on support from the trade union bureaucracy. No problem: before the election the main German trade union confederation, the DGB, already signalled that it will be a willing partner to a Grand Coalition government by agreeing to a deal weakening the position of Germany’s 900,000 temporary contract workers, reneging on its earlier commitment to equal pay for equal work.

It is little wonder that German workers are already more stressed than ever as the pressure to deliver productivity gains mounts. A survey conducted by the Techniker Krankenkasse(a state-underwritten health insurance company) revealed that nearly 60% of Germans feel under stress, with work issues given as the main cause. Stress levels are highest among people in the middle of their working life, i.e. between 36 and 45.

The Grand Coalition, the talk of ‘realism’ and the convergence of all of the German political parties around virtually indistinguishable programmes to restore capitalism to profitability will make it increasingly clear, and not just to class conscious workers, that they offer no real choices.

The only real choice facing the German working class is a stark one: capitalism or communism!