Looking For An Iron Lady

Chancellor Helmut Schmidt called her "a rhinoceros." His conservative successor Helmut Kohl scarcely concealed his dislike, virtually hissing her name when forced to discuss the ruthless, unbridled capitalism she epitomized--and that he was determined Germany should never emulate.

Left, right or center, Margaret Thatcher has long been the politician Germans loved to hate. But how times have changed. In recent months, dozens of articles have popped up in German newspapers and magazines lauding Thatcher's success in reviving modern Britain. Likening the "British disease" of the 1970s to today's "German malaise"--a coupling of recession and rising joblessness with a seeming incapacity for change--they pose a once unthinkable question: is Germany ripe for a Teutonic incarnation of the Iron Lady? The answer is a resounding "Yes," according to a new book entitled "Maggie Thatcher's Drastic Cure: A Recipe for Germany?" Apart from winning glowing reviews, it may have caught the attention of the country's leaders. When opposition chief Angela Merkel earlier this month outlined her party's program for radical social and economic reform, many Germans began openly asking if "Maggie Merkel" wasn't the one to lead the nation out of its mess.

Germany isn't about to adopt radical Thatcherism and, overnight, dismantle its cherished welfare state. Last Friday, however, the Bundestag passed a wide-ranging reform bill that will begin to shake up much of what has been sacred to Germans over the past 50 years. Cushy unemployment benefits will be cut back to 12 months from up to 36. The rules forcing the jobless to look for work will be radically toughened. Welfare entitlements will be cut; those on the dole will no longer be able to reject a job offer as "unsuitable" and retain their full unemployment benefits.

On the same day the upper chamber of Parliament, the Bundesrat, passed cutbacks in out-of-control public-health spending. And the two chambers appointed a multiparty Federalism Commission to draw up plans for changes in the Constitution that would devolve power and streamline decisions--easing future reforms. "The whole country is in reform fever," enthused the news magazine Stern. Die Zeit proclaimed the dawn of "a different republic."

The fact that you can now mention Thatcher's name at a Berlin cocktail party is a clear sign that old taboos are breaking down. Frustrated by years of economic stagnation, fed up with governments offering no solutions, Germans of every stripe increasingly favor radical change. In the media and on the street, in the political parties and the corridors of power, a consensus has grown--that there is no alternative to a deep and lasting overhaul of virtually all the policies and institutions that have traditionally defined the German state. Nothing, it seems, can stay the same.

Of course, one day of reform does not make a different Germany. The new laws are only small first steps toward fixing the country's problems, economists say, even as they credit Gerhardt Schroder with finally steering the German juggernaut in the right direction. As usual, the laws were watered down at the last minute to appease left-wing holdouts in his own party. Nor do they represent genuine structural change. A problem, too, is that Schroder seems to have no vision of where he'll ultimately take Germany. "We have no alternative to these reforms," he told a meeting of booing and whistling unionists last week, but he was at a loss to sketch out a grander vision. Beyond free-market radicalism, Thatcherism--at least to its fans--also meant leadership by conviction instead of muddling through, and embracing honest conflict instead of back-room consensus. It also meant a preference for systemic change over minor fixes. That isn't what Schroder offers, but it is what growing numbers of Germans seem to prefer. According to Renate Kocher of the Allensbach polling institute, there is now a majority among Germans for deep and far-reaching reforms.

Which politician best reflects the new mood? Probably the Christian Democrats' Merkel, who has suddenly emerged as a leading voice for change. For years, German politics were notorious for the lack of any real difference between socialists and conservatives, both deeply steeped in the old welfare-state consensus. Merkel, too, rarely risked an opinion of her own. But in a landmark speech marking the 12th anniversary of German reunification on Oct. 3, Merkel laid out a radical new vision. With surprising moral clarity, she called on Germans to celebrate individual ambition and responsibility, to work harder and embrace change. She called for an end to the unions' monopoly over setting wages and called on her country to support America in the fight against terror. "Freedom must move from the bottom of our value scale back to the top," she said, outlining a package of free-market reforms that reaches far beyond Schroder's.

To be fair, Merkel's political shift takes her closer to New Labor than to the radical furor of Margaret Thatcher. But she went further in the direction of conservative revolution than any postwar German leader has gone before. Like Thatcher in her day, notes Dominik Geppert, author of the Thatcher book, Merkel was able to break with party orthodoxy "because she is an outsider--a Protestant woman from east Germany in a party dominated by western Catholic men." Growing up under communism, a close Merkel ally tells NEWSWEEK, has also given her a healthy respect for freedom and distrust of established government structures, from which she draws a moral certitude that others in her party lack.

It is not at all clear whether the contentious and divided Christian Democrats will follow Merkel's lead. But they're not the only party confused by the fast-changing times. Schroder is pushing his reluctant Social Democrats to pass laws that run deeply against their tradition and conscience. More oddly, the once radical-reformist, pro-business Free Democrats now find themselves to the left of the chancellor, pleading to save the cozy, job-killing cartels protecting craftsmen and pharmacists that Schroder's new policies now threaten. Perhaps the strangest metamorphosis is that of Edmund Stoiber, failed candidate for chancellor and head of Bavaria's ostensibly conservative Christian Social Union. Railing against the welfare cuts and vowing to defend "the little man," he found himself in an absurd alliance last week with communists, radical Greens and disaffected Social Democrats. Germany's shifting political sands have confused the old divisions of left and right.

All this would have been unthinkable as little as a year ago. For Europe, it means the chances that its biggest economy will stop being a drag on the continent's growth are the best they've been in ages. Where Germany leads, France is likely to follow. That would mean that Europe's two biggest economies may, in five or eight years, begin to grow again at a healthy clip.

Let's also not forget that Thatcher's conservative revolution wasn't a big bang but a long and exhausting process that took 11 and a half years to complete. Her fight to break the unions alone lasted seven. Neither Schroder nor Merkel--and certainly not Stoiber--seems to have the stamina right now to steer Germany on such an arduous course. Schroder's reforms can only be a start. If he stops, or changes course yet again, Germany may indeed look for a real Maggie Thatcher. That Germans can today contemplate the thought is, in itself, perhaps the most heartening force for change.

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