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Fighting Recession

German Politician Wants Compulsory Bond for Rich People

A Social Democrat fighting an uphill campaign in the state of Hesse has an idea to raise €50 billion to help fight the looming recession. Rich people, he says, should be forced to invest two percent of their wealth in government bonds paying a maximum interest of 2.5 percent. Response has been muted.

Thomas Schäfer-Gümbel, a little-known Social Democrat candidate fighting to be governor of the western German state of Hesse in an election on January 18, has come up with an unconventional idea that is attracting the -- presumably desired -- attention of the media.

He says wealthy people with cash and real estate assets exceeding €750,000 ($1.04 million) should be forced to lend the state two percent of their assets for a period of 15 years, and at an interest rate no higher than 2.5 percent.

"A compulsory state bond would be a rapidly effective instrument to mobilize additional funds to overcome the economic crisis," Schäfer-Gümbel, 39, told Bild newspaper on Monday. "That would be very fair because only the very wealthy would be drawn on."

The projected proceeds of €50 billion would fund energy-saving buses and trains for public transport, new research projects and energy savings technologies, he added.

Schäfer-Gümbel was plucked from obscurity to fight the Hesse election next month. He was chosen after previous SPD candidate Andrea Ypsilanti stepped aside following her repeated failure to form an alliance with the Left Party to remove conservative Hesse governor Roland Koch from power in the wake of an inconclusive state election last January.

He is trailing Koch by 20 points, according to an opinion poll published last week.

A German government spokesman dismissed the idea on Monday. "Not every noise made in the Hesse campaign brings results in Berlin," said Thomas Steg on Monday.

cro -- with wire reports