SPIEGEL: Mr. Westerwelle, Chancellor Angela Merkel's ruling Christian Democratic Union (CDU) party is open to many things. It could enter into another grand coalition with the center-left Social Democratic Party (SPD), or it could also rule with the Greens. But you have pledged a coalition with the CDU and its Bavarian sister party, the Christian Social Union (CSU). Isn't that a bit risky?
Westerwelle: People are angry about how noncommittal the CDU is being. Chancellor Merkel and CSU leader Horst Seehofer should once and for all close the back door they're holding open to a grand coalition or ruling with the Greens. Germany must prevent another grand coalition and mustn't allow a government led by left-wing parties. This is why we are fighting for a conservative government. It's not risky; it's responsible.
SPIEGEL: How are your voters going to be sure that, once all the voting is finished, you won't enter into a coalition with the SPD and the Greens? If you do the math, that is still possible.
Westerwelle: I consider a coalition of the FDP, the SPD and the Greens out of the question. The policies of the SPD and the Greens are aimed at putting ever greater burdens on citizens. We won't have any part in that.
SPIEGEL: What will you do if, after the election, the SPD and the Greens try to find some common ground with you?
Westerwelle: When a cow grows wings and can fly, then it's a bird.
SPIEGEL: Are you saying the SPD might grow wings after the election?
Westerwelle: Let's try not to get on each other's nerves here.
SPIEGEL: Come on. Why don't you just say: "I will not sign a coalition agreement with the SPD and the Greens"?
Westerwelle: During the 2005 election, the FDP already showed that we won't enter government at all costs -- and particularly not at the cost of our credibility. If I had wanted to be vice-chancellor in a coalition of Greens, FDP and SPD, I could have held that post since 2005.
SPIEGEL: Do you think that Frank-Walter Steinmeier, the SPD candidate for chancellor, has any chance of leading the government?
Westerwelle: The SPD will end up in the opposition. The party is exhausted, divided and -- in its current state -- incapable of ruling. It needs to renew itself while in opposition in the same way that the FDP had to renew itself in 1998, after 30 years of being in government. That's just part of the nature of democracy.
SPIEGEL: The FDP is promising to cut taxes by up to 35 billion ($49 billion). Given the country's enormous debt burden, where is that money going to come from?
Westerwelle: I will not sign any coalition agreement that doesn't include a new and fair system of taxation. In terms of financing, among other things, we've proposed roughly 400 spending cuts in the budget -- although these calculations, of course, don't include all the nonsense with the cash-for-clunkers program or the billions in tax money wasted on the crazy health care fund. If we succeed in getting a fair system of taxation, we could bring 10-20 percent of unreported labor back into the legal economy and, in doing so, make our national finances healthy again.
SPIEGEL: Your savings measures include unrealistic cuts such as cuts in defense spending. And you also want to slash the government's climate protection program. How is that going to be possible in a coalition with the CDU?
Westerwelle: Of course, it's fairly easy to criticize our proposals. But the fact is that our competitors haven't made any serious proposals at all. Take the environment, for example. The energy industry won't be able to escape the nuclear phase-out program without paying a price. Companies will have to pay several billion euros to prolong the life-span of the nuclear power stations. We are going to put that money into a foundation for energy research and thereby help the environment much more than the SPD, CDU and Greens have done.
SPIEGEL: When should citizens expect to see some tax cuts?
Westerwelle: It will take us the full term to implement a true relaunch of the tax system, but we will commit ourselves to the necessary steps in a coalition agreement if we get the mandate from voters. We'll begin by starting to remove cold progression (editor's note: the process by which taxpayers are bumped into higher tax brackets even if their real, inflation-adjusted incomes haven't grown; also known as "bracket creep"). In the future, the tax thresholds need to be reviewed every two years and adjusted to keep pace with the monetary development. If possible, by January 1, 2010, the basic tax-free threshold will be raised to 8,004 per person. And if you factor in other allowances, a four-person family would only start paying taxes once its earnings exceed 40,000. Also, before then end of the year, we will rid the inheritance tax of all the nonsense attached to it so that it can become a matter for the states.
SPIEGEL: What will you do to prevent another financial crisis?
Westerwelle: It is scandalous that, even a year after the crisis broke out, the government still hasn't come up with a sensible reform of financial and banking supervision. We will immediately rearrange the fragmented system of banking supervision and place it solely under the Bundesbank's remit (editor's note: banking regulation in Germany is currently handled by both the Bundesbank, the country's central bank, and the Federal Financial Supervisory Authority, or BaFin). We would also like to replace the current system of ratings agencies with an independent foundation which would evaluate companies and banks according to the Stiftung Warentest model (editor's note: the latter is Germany 's leading consumer watchdog and advice group). We can't let it happen again that millions of small investors lose all their savings.
SPIEGEL: Are we hearing new tones from the leader of the FDP, the party that once called itself the party of high earners?
Westerwelle: You're really talking about ancient history now. We represent the middle ground which is shrinking at an ominous pace. If things go on like this the foundation of our society will become too weak. A country that knows only rich and poor is not the kind of country I want to live in.
SPIEGEL: But don't you remember that you were the one in 2004 who accused those worrying about social schisms of being "social romantics"?
Westerwelle: The FDP was not indifferent about social schisms; we just wanted to resolve it in a different way. Still, I have to admit to having drastically underappreciated the drama of the development and that certain encounters have made me a bit more sensitive to the issue.
SPIEGEL: So you've learned something new?
Westerwelle: Over the last few years, I've met some people who, despite having worked hard for a low or medium wage and having diligently saved for their retirement, have still ended up being dependent on Hartz IV benefits in their mid-50s through no fault of their own (editor's note: under Germany's controversial Hartz IV welfare system, individuals are classified as long-term unemployed and receive 351 a month in government assistance as well as additional amounts for dependents and the cost of renting "suitable" housing). When this happens, they lose almost everything they've built up and set aside for themselves.
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