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  Letter From Berlin: Parties Plan to Bash CEOs in Election Campaign

Letter From Berlin Parties Plan to Bash CEOs in Election Campaign

By SPIEGEL Staff

Part 2: CSU Sees Managers as Welcome Scapegoats

With sentiments like these, Keitel could practically be a political speechwriter these days. Their newfound self-confidence is leading politicians to attack business leaders in their hunt for votes.

Some of the ideas being aired by the advisers of Bavarian Governor Horst Seehofer, the leader of the CSU, are particularly radical. They want him to keep stressing that bank managers are to blame for the crisis. In a time of crisis, of suffering and loss, people need an outlet for their rage, the advisers say. And politicians figure that by giving the people such an outlet, they can prevent them from raising doubts about the political world or even democracy as a whole.

The only problem with this approach is that Economy Minister Karl-Theodor zu Guttenberg, who also happens to be a member of the CSU, refuses to allow executives to bear the brunt of the blame.

Guttenberg says: "We have said, clearly and unmistakably, that many in the financial world irresponsibly ignored countless risks, solely for the purpose of raking in unreal profits in the long term. The financial sector will be confronted with this loss of image for a long time to come. On the other hand, many banking executives have done a good job in the crisis, and those are the ones we need now to rejuvenate the flow of money and credit, the lifeblood of our economy."

The SPD, for its part, is more willing to paint things in black and white. It wants to establish clear fronts and to divide the world into good and bad.

Of course, the Social Democrats count themselves on the good side of things. They see themselves as the guarantors of capitalism with a human face and as the protectors of employees. They want to bring discipline to the economy with strict rules and force its leaders to pay less attention to their own profits and take more responsibility for the common good.

But the SPD scenario also counts the conservatives and the opposition liberal Free Democrats among the bad, arguing that they are in league with corporate executives. The Social Democrats plan to accuse members of these parties of not wanting to change the current conditions at all, painting them as naysayers and opponents of a more public-minded spirit and stricter rules for capitalism.

'Hooligans, Pyromaniacs and Gangsters'

Meanwhile, hardly a day goes by without the senior SPD politicians sharply criticizing top business leaders. SPD Chairman Franz Müntefering says that banks had "hooligans, pyromaniacs and gangsters" on their payrolls. He also likes to call them "modern robber barons."

These sentiments are reflected in the SPD's campaign platform, parts of which read like a declaration of war on the business community. If they win the election on Sept. 27, the Social Democrats plan to introduce a national minimum wage, stricter rules governing executive salaries and an increase in the wealth tax from 45 percent to 47 percent. The corporate lobby is also unlikely to be pleased over the idea of a tax on stock market gains or a tightening of liability rules for executives who have led their companies into bankruptcy.

For the CDU, the popular rage against corporate and bank executives is politically hazardous. It sees itself as a party of economic competence, but the SPD is now twisting that perception to mean that the conservatives are the party of executive interest -- a charge the CDU/CSU wants to ward off.

"We cannot allow the misconception to arise that we are the party of corporate abuses," says Norbert Röttgen, a senior member of the CDU. For conservative politicians, this means that it's time to strike back. Christian Wulff, governor of the northern state of Lower Saxony, accuses corporate executives of "incompetence paired with dilettantism."

Merkel's CDU Changing Its Tune

With the general election looming, the conservatives are suddenly willing to support things they were vehemently opposed to not long ago. For instance, the conservatives' parliamentary group now wants managers to be financially liable to a certain extent for the mistakes they make in future.

It also wants to impose a three-year waiting period on anyone seeking to move from a company's management board to its supervisory board. Peter Müller, the CDU governor of the southwestern state of Saarland, takes things a step further. He wants to limit the corporate tax deductibility of managers' pay so that firms can only claim salaries up to €1 million as a business expense.

Despite all risks, the crisis has a silver lining for the CDU: Its politicians can now attack corporate executives, and the executives aren't returning the criticism. The party leadership has noticed that the business community has stopped accusing it of being incapable of reforming the economy -- probably because no company is entirely certain whether it will eventually need the government to bail it out. For business, it makes sense to handle the politicians charged with making these decisions with kid gloves.

The new hierarchy that will be on display at Wednesday's Chancellery meeting also includes the broad chest of Frank Bsirske, chairman of services industry union Verdi, Germany's second biggest union after IG Metall. When he attends the meeting on Wednesday, he will advocate for an additional economic stimulus package, worth €100 billion ($132 billion), for public investment in education, the environment and infrastructure. Although his proposal will not be approved, Bsirske's reputation has changed. Nowadays, no one will think: Oh, that's just an outdated old leftist talking.

In the midst of a historic downturn, the unions are on an unexpected roll. For years, large sections of the business and political elite saw them as dinosaurs that had forgotten to die -- creatures too big and cumbersome for the age of turbo-capitalism. But, in this crisis, politicians are taking the unions seriously as negotiating partners once again.

Unemployment will likely continue to rise between now and the parliamentary election. A spat with the unions is the last thing Merkel and Steinmeier can afford in the election campaign because it would lessen their chances of winning. The politicians want the unions to help contain the public's anger when the big waves of layoffs start hitting the German economy this summer.

Until now, all union leaders, from German Trade Union Federation (DGB) Chairman Michael Sommer to metalworkers' union IG Metall Chairman Berthold Huber, have stressed that they are talking to all political parties and will not yet give any endorsements. But after years of estrangement in the wake of former Chancellor Gerhard Schröder's welfare cuts, the SPD and the unions have patched up their differences. IG Metall Chairman Huber and his counterpart Hubertus Schmoldt of the Mining, Chemical Industry and Energy Trade Union are trying to use their connections with Steinmeier and Labor Minister Olaf Scholz to advance their agenda. They could even look like allies on Wednesday, which would have been unthinkable in Schröder's day.

The world will seem like a very different place at the Chancellery on Wednesday. With regard to the relationship between politics and business, the chancellor has prepared herself by studying the writings of Wilhelm Röpke, a theoretician of Ordoliberalism. Röpke advocated a clear division of labor, with managers running the companies and politicians defining the parameters of the business world. Perhaps Merkel will make it clear to her visitors on Wednesday that it would be a good idea to return to Röpke's ideas after the crisis ends.

Reported by MARKUS DETTMER, DIRK KURBJUWEIT, ROLAND NELLES, ALEXANDER NEUBACHER and RALF NEUKIRCH

Translated from the German by Christopher Sultan