Anti-capitalist rhetoric and Cold War relic

The one redeeming factor in the pope’s persona, at least for the present, was the continuation of his predecessor’s anti-war stance, with respect to Iraq.

While TV screens and media reports continued their unremitting analysis over what the new Pope would mean for the fate of the world, the German public were more riveted by the impending political events whose outcome may impact their suspenseful lives far more than a distant German pope perhaps ever would. Crucial elections are due in North-Rhine Westphalia this month and the voters’ ears are pricked for signals that may decide their preference for who they would like to see as their elected representatives. The election outcome has deep significance for national politics. But some of the signals emanating from the political leaders are turning hostile to business, which is all too easy in a continent where the culture of enterprise has never been as popular as in the US or elsewhere.

In what could be the worst outbreak of anti-capitalist rhetoric in Germany, chancellor Gerhard Schroeder, who once prided himself on his business-friendly governance, has now openly complained of unfriendly German companies’ “endless talk” of shifting jobs abroad. And add to the economy’s woes. To make matters worse, the SPD party leader Franz Muentefering has carried his attack further by disparaging as “swarms of locusts” the very business entities that Germany had tried hard to attract, and bemoaning the lack of “the right company ethics” that saw thousands of employees being laid off while the companies crowed about ‘high profits’. A parallel rise in corporate profits and unemployment seemed a paradox.

The anti-capitalist debate gripping the Social Democrats has sent ripples of shock and dismay among the corporate leaders, prompting the threat of resignation from a business leader heading ‘Invest in Germany’, an organisation expressly created to attract foreign investments in Germany. The chancellor would dearly like to see increased spending on German production facilities as a precursor to boost demand. But several German engineering companies — all world leaders expanding rapidly in their fields — responded by saying that they were doing just the opposite of Schroeder’s injunction in the interests of survival. Indeed, one CEO stated that his company, one of the world’s leading makers of power transmissions, had to avoid investing in Germany due to excess capacity and build more in China where the demand was soaring. Many consider the retention of their existing employees as “doing a good job”.

The offshoot of it all has been that many new investments were indeed going elsewhere, lured by the emerging markets, most notably in China and India. And it did not change the hard reality on the ground that businesses and industry have a primary and more binding responsibility towards their stakeholders than to the passing whims or circumstances of the government of the day. It seems to escape the government’s understanding that industry will move to where the environment is more conducive to growing profitability. Commerce and industry are not captive constituencies of any government. It can only facilitate to bring out their inherent potential and thus enhance their contribution to the economy.

Schroeder has got an unexpected shot in the arm, however, for another important item in his political agenda. China sent word that it would support Germany playing a bigger role in the United Nations and that it would back Germany for a new permanent seat on an expanded UN Security Council. An elated chancellor has lost no time in immediately returning the favour by calling in the Bundestag for the lifting of the European Union’s arms embargo on China. Describing it as a ‘symbolic relic’, the chancellor said he was convinced that the embargo was expendable and that the core question was how the EU and Germany could pursue their interests toward China in the medium and long term. The speech drew both applause and catcalls. The irony was not forgotten that China has viewed Japan as not ready for a place at the top table of diplomacy. Both Germany and Japan have been working closely together for years to win permanent membership in a reformed Security Council.

We’re all familiar with the espionage drill during the Cold War. Soviet agents caught on the wrong side of the Berlin Wall would be interrogated, imprisoned, and occasionally, handed back to their KGB masters in a tense exchange of spies at Checkpoint Charlie.

Times have really changed. In a case that would make James Bond wince, a Russian spy who was caught red-handed buying German military secrets escaped prosecution after a deal was struck to prevent the breakdown of burgeoning relations between Berlin and Moscow. One of the most blatant acts of Russian espionage in Germany since the Cold War came to light only after Chancellor Gerhard Schroeder and Russian president Vladimir Putin, signed a historic multi-billion dollar trade deal recently.

The story is that German counter-espionage agents established that a Russian consul stationed in Hamburg — in reality a member of Kremlin’s 1,200-strong GRU military intelligence branch — travelled frequently to bars around Heidelberg to meet a German army official who offered to sell military information in exchange for cash. After a few meetings, however, his informant duly informed German intelligence. According to reports, from then on, most of the information passed on by the mole was anodyne material designed to mislead the Russian’s paymaster. He was finally arrested last November after the German authorities gave him a long enough rope. German intelligence also failed to persuade him to work as a double agent.

With Schroeder and Putin clinking glasses, the episode has been quietly ‘buried’, thanks to the direct intervention of the chancellor, who is on first-name terms with Putin, himself a KGB agent in Germany during the Cold War. But there’s more reason to put this incident behind both governments. World leaders convene on May 9 in Moscow to commemorate the 60th anniversary of victory over Nazi Germany and the end of the bloodiest conflict in history. Chancellor Schroeder will also be there.