The World Cup parties could not hide the growing unpopularity of the German government or popular fears of what the future holds.

A decisive moment for the left in Germany

Symbolically Chancellor Merkel used the day on which Germany won its third game to announce that for "many or several years" pensioners will not see their pensions increase, in other words their real value will drop.

From its outset last November the "grand coalition" of the Christian Democrats (CDU and CSU) and Social Democrats (SPD) was really a coalition of losers. Both the Christian parties and the SPD received fewer votes in last year’s general elections than they did in the previous one in 2002. The parties of the so-called "winner" of the election, the Christian democrat Angela Merkel, lost over 1,850,000 votes, while SPD of the then Chancellor Schröder had over 2,300,000 fewer votes than in 2002. This is one reason for the regular tensions that appear within the government.

These parties’ loss of support was not surprising given the savagery of the social attacks which the Schröder government launched in 2003 and the fact that Merkel and the Christian Democrats were offering basically the same medicine of cutting living standards and creating a "low wage" sector. Initially, however, the new government received some good opinion poll results. Among limited sections of the population there were hopes that perhaps things would improve – but this mood did not last long. Amongst many others, especially the over four and a half million unemployed and their families, there was a continuation of bitterness and fear about the future.

But as the "grand coalition" has implemented its policies of tax increases for the majority and continued social cuts, this support has started to melt away. The June "Deutschlandtrend" poll for publicly owned TV channel ARD showed 68% dissatisfied with the government’s work, as the percentage satisfied fell from 40% in May to 31%. But the bosses have urged the government to ignore these figures and continue attacking living standards and lowering taxes for companies and the rich. Speaking in mid-June at the BDI (Federation of German Industry) employers’ conference its president asked Merkel "why are you waiting?" Pointing out that there is no strong parliamentary opposition and next year only one election, in Bremen, the smallest federal state, he urged the coalition to go much further. Merkel herself told the BDI conference that Germany remained a "rehabilitation case" with "desolate" public finances.

The previous week the biggest ever tax increase in the history of the Federal Republic, a rise in VAT from 16% to 19%, was finally approved. This massive increase in anti-social indirect taxation was accompanied by cuts in tax allowances for many workers and middle class people while, at the same time, the government repeated its intention to cut company taxation by a quarter from 2008.

Social Democrat ministers have been in the forefront of many of these attacks. While one proposed these tax increases, another Social Democratic minister carried through yet another tightening of the already extremely harsh regulations governing unemployment pay. One of the latest "corrections" is to force unemployed people sharing accommodation with others to prove that they are not in a relationship with any other person in the house. How they are mean to actually do this has not been made clear. Perhaps the ministers want to make every house a "Big Brother" house with cameras in every room?

Economic growth for whom?

Currently the German economy is enjoying a period of growth, mainly powered by exports. Germany is now the world’s biggest exporter of goods, ahead of China and the US, although the present fragility of the world economy means that it is not certain for how long international trade will keep growing. But the success of German exports has not significantly reduced unemployment or stopped the onslaught being waged by the ruling class against the living standards of workers, the unemployed, youth and many sections of the middle class.

Although productivity per hour grew by over 30% between 1991 and 2005, actual real wages were 3.6% lower in 2005 than 15 years earlier. Between 2000 and 2005 the share of wages in the German national income has fallen from 72.2% to 67%, the result has been a huge surge in profits. In 2003 the 8 largest engineering companies on the DAX stock exchange made 7,052 million euros in profits and paid out an average of 44,500 euro per worker in wages. Last year the average wage was lower at 44,200 euros but these companies’ profits had soared to 11,375 million euros. In global cash terms for the economy as a whole, this meant that last year, while profits and earnings from property rose by 32 billion euros, total wage earnings in Germany fell by 6 billion euros.

In the workplaces the bosses’ offensive is continuing. Almost every day there are announcements of job losses. Volkswagen has announced it wants to cut 20,000 jobs and increase its working week from 28.8 to 35 hours without any increase in pay. In 1994, VW workers accepted the 28.8 hour working week in order to prevent redundancies. Mid-June saw Siemens, Allianz insurance and Dresdner Bank each announce thousands of job losses. The latest figures show that in the year to February manufacturing production grew in value, by 7.6%, while employment in this sector fell by 1.3%. The public sector lost 97,500 jobs, 2.5%, between 2004 and 2005 alone.

At the same time eastern Germany has not recovered from the huge job losses brought about by capitalist unification. In 2005 there were 4,980,000 employed in the east compared with 8,718,000 in 1989. This is why eastern Germany has an average unemployment rate of over 17% despite a nearly two million drop in the area’s population. Recently a newspaper article described Chemnitz as an east German "Boomtown", but this is very relative as it has 16.6% unemployment.

Outside the workplaces the over four and a half million unemployed have suffered attacks not seen since the 1930s. The so-called "Hartz" laws (named after the then Volkswagen director who devised them) that have cut unemployment benefits and limited social security, have driven millions into poverty. This policy is designed both to cut state spending and to force the unemployed to accept jobs with poverty wages. One bitter result is that there are now a record 1.7 million children living in poverty in Germany.

While there have been a number of significant trade union struggles recently these have generally ended in rotten deals. This year saw the longest ever public sector battle but this ended with the union leader accepting for many workers, a 30 minute lengthening of the working week with no extra pay. In the engineering industry, after a wave of enthusiastically supported "warning strikes", the union leaders made a highly significant concession when they agreed to accept plant bargaining based upon companies’ profitability, something that breaks solidarity between workers in different companies and that could open the door to employers demanding wage cuts etc. when firms are in difficulty. However a long struggle by university hospital doctors won significant gains and now, after local councils refused to implement the same deal, doctors have voted by 97% to start strikes at 700 municipal hospitals.

In May the DGB trade union federation held its congress. During that congress the chair of the DGB, Sommer, told the London Financial Times that Chancellor Merkel was "certainly better" than her predecessor Schröder because she was "open-minded, pragmatic and fair". Although the DGB leadership said that they would campaign against some of the government’s policies they have no intention of mounting a serious opposition to the continuing offensive against living standards.

Indeed their unofficial policy of offering support to the grand coalition was confirmed in a contested vote for the deputy DGB chair that saw a mildly critical SPD member replaced by a CDU member. This led to newspapers commenting there was now a "grand coalition" at the top of the DGB as well as in the Federal government.

The development of the Left

Die Linke (The Left, the name of the WASG and L.PDS parliamentary group) was the real victor of last year’s general elections. However, since then it has hardly advanced despite this background of continuing attacks, growing government unpopularity and struggles both by workers and, more recently, by students who often held occupations and road blockades against tuition fees. A number of the opinion polls have shown the Left making a marginal advance from the 8.7% it won last September to around 10%, although some polls put it a bit lower.

In the actual elections that have taken place, the Left’s results have been disappointing. In two regional elections held at the end of March the Left was not able to build on the vote it achieved last September. Although it previously won 279,000 votes (5.6%) in Rheinland-Pfalz, this time it polled only 44,700 votes (2.5%). In Baden Württemberg, the WASG’s vote fell from 219,100 (3.8%) last September to 121,800 (3.1%). Although the Left did score some good votes in the local council elections held at the same time in Hessen, these were overshadowed by the poor regional results.

However last September’s result for the Left, although good, was actually below expectations and what had been possible. A few weeks before that election the Left was scoring 12% in opinion polls and the actual result of 8.7% showed that only a part of this potential was mobilised.

A key reason for this was the character of the Left’s campaign. Last September’s general election had been called a year early after the then ruling SPD’s devastating defeat in the North Rhine Westphalia (NRW) regional elections held the previous May.

In the weeks before the NRW election Oskar Lafontaine, a previous SPD leader and briefly Finance Minister before he resigned in 1999 in protest at the Schröder government’s shift towards neoliberalism, had declared his sympathy for the WASG. However he never called on people to vote for the WASG in the NRW elections. But after the NRW election Lafontaine declared his willingness to join the WASG and stand in the early general election, provided the WASG and PDS (Party of Democratic Socialism, the former ruling party in the GDR) formed an electoral alliance. This is what then happened, although many left critics warned that an alliance on the basis of PDS policies would mean a move to the right, including acceptance of the "need" to make some cuts.

The two parties’ leaderships decided, for what they said were legal reasons, that they were only able to stand in September on the election lists of the Left Party.PDS (L.PDS, Linkspartei.PDS, the renamed PDS), and this party dominated the electoral bloc. This resulted in a watering down of some of the WASG’s policies, such as on the level of a minimum wage, and in some areas, like NRW, a lowering of activity by WASG members and supporters.

This was a reflection of the fact of the WASG’s formation in 2004 was, in and of itself, partly a commentary on and reaction against, the L.PDS’s policies. Those who formed the WASG did not want to join the PDS, sometimes this was for "anti-communist" reasons, but mainly it was a rejection of the PDS’s policies and methods.

Role of the L.PDS

The PDS, the former governing party in the Stalinist GDR had, after German reunification, transformed itself into a ‘normal’ reformist party. It was socialist in words, but increasingly stressed that it wanted to work within the confines of capitalism. It only had a strong electoral base in the east. In the west it could never develop real roots within the working class and youth. This was because of its failure to fully distance itself from its Stalinist past. This was also a reason for the very sharply conflicting attitudes towards it amongst workers and youth in eastern Germany. Most importantly, it was incapable of leading determined battles or struggles, its "campaigns" usually consisted of expensively produced material with often vague or very moderate slogans.

Towards the end of the 1990s the PDS started to form coalition governments with the SPD at state and local level which carried out social cuts and privatisation. This development ended any idea that the PDS could develop into a mass national left alternative seriously fighting neoliberalism. The PDS’s move to the right accelerated and at its 2003 congress in Chemnitz, the PDS adopted a programme that accepted the capitalist, market economy. This stated that "entrepreneurial behaviour and the profit interest are important prerequisites for innovation and productivity".

Especially in Berlin, which has been governed by a SPD/PDS coalition since 2001, many left-wing PDS members joined the WASG. Just after the WASG was founded its National Chair, the trade union official Klaus Ernst said "I reject co-operation with the PDS or a joint list with them in the next Bundestag election. The PDS is taking part in two regional state governments that carry out a policy of the social cuts." (Frankfurter Allgemeine Sonntagszeitung, 1 August 2004). This reflected a widespread opinion on the PDS that then existed within the WASG. However, less than a year later, Ernst changed his opinion on this, and a number of other issues, after Lafontaine proposed unifying the WASG and PDS.

Previously in the 2002 general election the then PDS won 1.9 million votes, down from over 2.5 million in 1998. Last year’s 2.2 million jump in votes for the L.PDS list to over 4.1 million reflected both the disillusionment with Gerhard Schröder’s government and, in particular, the huge appeal of the newly-formed WASG and Lafontaine, its most prominent figure.

However this reality is totally ignored by majority of the WASG national leadership in their drive for a merger with the L.PDS. At the last WASG congress the leading group around Lafontaine presented a picture that the WASG had no future on its own and that the only way forward was an unconditional merger with the L.PDS.

The test of Berlin

Many of these issues were aired in the widely publicised open controversies in the WASG during spring this year. This debate, which peaked in April and May, dealt with the WASG’s policies and the basis upon which it should unify with the L.PDS.

In many ways the issues became focused on the question of next September’s Berlin regional elections. Since 2001 the Berlin city government has been run by a SPD and L.PDS coalition that has been, in many ways, a national pace setter in carrying out cuts in public sector jobs and wages, education, social services as well as privatisation. One result has been a collapse in support for the L.PDS in Berlin. In 2001 they won 21.6% of the vote, in April 2003 they were at 9% in the opinion polls; now the L.PDS hovers around 15% and their target is 17% in the elections.

The WASG national leadership wanted the Berlin WASG to stand candidates on the L.PDS’s election lists. But, after much discussion and forlorn attempts to get the Berlin L.PDS to change its policies, the Berlin WASG rejected this as it would have meant standing jointly with the L.PDS leaders responsible for neoliberal attacks. Instead it decided to stand independently.

The Berlin decision provoked an open battle within the WASG which came to a head at the WASG national congress held at the end of April. Against a background of public threats by party leaders to split if they did not get their way, the congress voted to oppose the Berlin WASG’s decision and allow the national leadership to take measures against it. The congress was sharply polarised on this issue. A resolution moved by the most left wing members of the WASG national executive calling for a "fundamental change of course in party building" and opposing any "administrative measures" was only defeated by 156 votes to 143, even after the WASG leader Oscar Lafontaine specially intervened in the discussion to say that this was the most "important decision" facing the congress.

That decision marked a big retreat from one of the WASG’s founding principles: namely that it would not participate in governments "carrying out social cuts, privatisation and job cuts". This is the exact opposite of the policy of the L.PDS in Berlin. If the WASG national leadership had been serious about their own party’s principles then they would have declared that it was impossible to stand jointly with the current Berlin L.PDS leadership and supported the Berlin WASG standing separately as part of building a determined movement against neo-liberalism. But not only were their eyes fixed on unification with the L.PDS, clearly the leadership wanted to weaken the WASG’s position on when to participate in government.

Rapidly after the congress the WASG national leadership moved to remove the Berlin WASG’s leadership and stop it standing separately in September. But a combination of determined resistance and legal action defeated this and now the Berlin WASG is back in office and the Berlin WASG is standing in the September elections. This also helped clear the way for the WASG in the eastern state of Mecklenburg-Vorpommern to also stand independently against another SPD – L.PDS coalition in the regional elections being held their on the same day.

The SAV’s role

Socialist Alternative (SAV, the CWI in Germany) has played an important role in the WASG’s development. Last year the SAV were amongst those who argued against the national leadership that the party should stand in the NRW regional elections. At the same time an attack by some WASG leaders on the SAV for being socialist was defeated. This was before the WASG national leadership agreed with Lafontaine to merge with the L.PDS.

The important role that the SAV has played in Berlin has meant that it has won significant support amongst the best activists in the WASG and increasingly in the wider workers’ movement, as demonstrated by the massive publicity for Lucy Redler. She is one of the SAV’s leading national spokespersons who has been elected as the Berlin WASG’s top candidate for the September elections.

These fighting elements increasingly see the SAV as containing some of the most consistent and determined campaigners against the attacks on living standards and to build a new alternative, a new workers’ party that can fight capitalism.

Lucy Redler’s many media appearances have started to popularise the idea that "Trotskyism" symbolises opposing social cuts and fighting for a socialist alternative. One result is the increased numbers contacting the SAV to discuss both socialist ideas and how to campaign for them.

The SAV’s policy has been consistently opposed by Linksruck, the German sister organisation of the British SWP. They have argued that the most important next step in Germany is the merger between the WASG and L.PDS and that then the policies of the Berlin L.PDS can be challenged inside the new party. But given the numerical superiority of the L.PDS in Berlin, a joint electoral list would mean supporting leaders who have carried out neoliberal policies.

From the point of view of anti-cuts campaigners, let alone socialists, it is barely credible that Linksruck are arguing that workers should vote for leaders who have consistently over four years, attacked living standards in the name of "budget consolidation".

This position led the Linksruck leaders to work closely with Lafontaine and the WASG right wing in the attempt to block the Berlin WASG’s candidature, a policy which has seen a number of them rewarded with jobs with members of parliament or in L.PDS controlled organisations.

From the WASG’s foundation, Linksruck argued that it was "sectarian" to even mention socialism within the party. In contrast the SAV argues that it is both necessary and possibly to link together the immediate issues working people and youth face with striving to win support for socialist ideas. For a long time the SAV has said that a new workers’ party is needed, but never put forward the acceptance of socialist ideas as a precondition for participating in its formation. It welcomed the WASG as a step in that direction while at the same time explaining that a new party needs to adopt socialist policies if it is not going to end up as a "SPD mark II".

This policy was rejected by Linksruck as sectarian and limiting the appeal of the WASG. They argue that day to day campaigning and propaganda should be restricted to dealing with the immediate issues. This is despite the many opinion polls in which a majority of the population express sympathy with and openness to socialist ideas. In that respect, the WASG and L.PDS national leaders are, in words, more to the left than Linksruck is as their draft for the new party’s founding manifesto refers positively to "democratic socialism".

Because the debate on Berlin has been so much in the public eye Linksruck’s effectively 100% support for Lafontaine on this issue is well known and undermined its credentials as serious fighters against neoliberalism.

Berlin’s September election

There is a tremendous significance in the Berlin WASG’s successes in being able to stand up to and defeat suspensions. This whole debate and struggle has pushed into the forefront the issues of how exactly to fight the cuts and on what basis can a new left party be built.

As these questions were publicly debated in the media it made it harder for the WASG leadership to silently move the party away from its founding, anti-neoliberal positions. A range of activists throughout the country followed this debate and are now looking at the outcome of the elections.

The September 17 elections are of key importance and will have an important impact on the immediate future of both the WASG and L.PDS. However elections are often one of the most difficult terrains to campaign on.

The Berlin WASG will be especially looking towards public sector workers, the unemployed and young people. Public sector workers have been hit by thousands of redundancies, privatisation and real wage cuts. For example, Berlin’s transport workers have seen a 10% cut in wages. The unemployed have been hit by the cuts in benefit and forced labour schemes that the Berlin coalition agreed to implement, but they can sometimes be a hard layer to motivate to vote. Young people have also suffered and, according to one recent opinion poll, around 9% of under 29s in Berlin were looking to vote for the WASG.

This same opinion poll indicated that the WASG was on 5%, a key figure as that is the threshold to get elected into the city parliament. But this was just one poll over three months before the actual vote. The campaign will be very sharp. Lafontaine and the national WASG leaders will actively intervene to support the L.PDS, emphasising "left unity" against the federal government and promising that the Berlin L.PDS will be different in future. Unfortunately the reality is that while the Berlin L.PDS leaders have made some cosmetic changes they are still sticking to their plans to reduce the city council’s workforce by 18,000 by 2012.

Depending on turnout between 60,000 to 75,000 votes are needed to reach the 5% bar, but even 30,000 votes for a clear anti-neoliberal stand would be a significant step. A serious campaign by the Berlin WASG could not only achieve an important vote but, more crucially, build the forces that will continue to fight neoliberal cuts after the election.

Die Linke – the likely new party

A success for the Berlin WASG would be a national signal against the L.PDS’s politics of compromising on cuts and raise again the question of what policies a new party should follow.

However the Berlin WASG getting elected is unlikely to stop launch of a new party, probably called Die Linke (The Left) next year. The L.PDS is overwhelmingly in favour and since its last national congress, Lafontaine’s grouping has a strengthened grip on the WASG. The fact that Lafontaine’s grouping was at the national congress prepared to use threats and disciplinary measures in order to get its way means that one way or another, it is likely to force through unity. This could change if there was a very good election result for the Berlin WASG and a very bad one for the L.PDS, but this is not the most probable scenario.

But it is unlikely that the new party will be one with a vibrant, active membership. It is quite possible that those who supported the Berlin WASG’s candidature will be excluded from a new party. Already there has been in most areas stagnation in membership growth of the WASG since last year’s decision in favour of a merger and also a dropping off in activity. The L.PDS, despite some recent recruitment, is fundamentally an old party. It has not been able to build itself. According to the L.PDS’s own figures it was around 61,000 members, nearly 60% of who are over 65 years old. It is estimated that around 5,000 of the 6,000 L.PDS members who attend meetings also hold elected positions ranging from local to national level. With large financial resources the L.PDS employs directly or indirectly around 1,000 people.

While the launch of a new party could see people, outside Berlin, joining the combination of the L.PDS’s massive apparatus and the increasing grip of the grouping around Lafontaine will act as a disincentive to be really active. Certainly Lafontaine’s willingness to quit the WASG if he did not get his way will be seen by some members as a warning not to go too far in their criticisms.

However Lafontaine is playing a dual role. In his drive for unity with the L.PDS he helped water down the WASG’s founding, anti-neoliberal principles. But at the same time Lafontaine repeatedly voices a verbal radicalism against neoliberalism and capitalism, in favour of general strikes "as in France", and repeatedly speaks of "democratic socialism". He regularly gets a rousing reception as he travels the country speaking to trade unionists and workers involved in struggle. But even when arguing for "democratic socialism" he puts forward as his examples the Scandinavian countries, in other words accepting that capitalism will continue.

This means that Lafontaine on the one hand can help attract support, especially votes for the new party, but at the same time threatens its future by rejecting a policy that challenges capitalism. This is a concrete issue as the WASG was born in a completely different period from the first four decades of the German Federal Republic.

Today globalised capitalism, marked by over-capacity and increasing international competition, does not leave much space for reforms. Even in "boom" times, let alone periods of stagnation or recession, the achievement or defence of reforms needs mass action. Such struggles can achieve results, but in today’s conditions they will inevitably be only temporary victories as the capitalist class will return to the attack when they can. This puts every new party to the test very quickly and is the reason why, within two years of its foundation, the WASG has been gripped by the debate over Berlin.

The time of stable reformist parties with a mass membership, as we knew them in many countries after 1945, has gone. The crisis facing the old parties means that there will be new attempts to build workers’ parties. The danger is that some will not last for long because reformist forces will drag them into participation in governments where they will implement social cuts and they will therefore become lasting poles of attraction. But in these processes and class struggles, there will develop a new generation of fighters who will start the fight for a real new workers’ party and who will be open to Marxist ideas.

The WASG, despite not having a socialist programme, was a first such step in Germany and SAV members worked to both build the WASG and to help develop this embryonic formation into a mass workers’ party with a socialist programme. Now with the probable formation of Die Linke the immediate future is more uncertain.

The SAV will continue to strive to build a new party of the left; it stands for such a party to be built from activists in the workplaces, social and youth movements, the WASG and L.PDS. But it warns that a new left force will only be successfully built if it is principled, rejecting all neoliberal measures, and democratic. At the same time such a party will only achieve a lasting solution to the many problems humanity faces if it adopts socialist policies. To achieve this socialist alternative the SAV strives to build a movement in Germany that applies today the best traditions of Marx, Engels, Bebel, Luxemburg, Liebknecht, Lenin and Trotsky.

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