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Kohl: We Are Far From One Germany


International Business

KOHL: WE ARE FAR FROM ONE GERMANY

Only a mile from German Chancellor Helmut Kohl's office, striking workers are blockading the Bonn subway as public-sector employees stage their first national walkout in 18 years. As if that isn't enough, Kohl's center-right coalition is reeling from the surprise resignation several days before of veteran Foreign Minister Hans-Dietrich Genscher. Yet, sitting amid the dozens of model elephants bedecking his teak-and-leather-furnished office overlooking Bonn's Chancellery gardens, Kohl, 62, remains the picture of self-assurance. His response to speculation he might quit after a decade as Germany's leader? "Garbage."

On Apr. 29, the 6-foot-4-inch Chancellor took time out from his labor troubles and other matters for a two-hour conversation with BUSINESS WEEK Assistant Managing Editor Robert J. Dowling, Bonn Bureau Manager John Templeman and Correspondent Gail E. Schares, and European Economics Correspondent Bill Javetski. Seated beneath a portrait of former Chancellor Konrad Adenauer, Kohl spelled out his prescriptions for Germany, Europe, and the North Atlantic alliance.

Q Is the strike weakening your government?

A This strike is no threat to the ability of my government to govern, nor to the economic stability of our country. But it is absurd. Many people in western Germany have not yet fully understood that German unity is not some passing event, but has consequences. We have to do something about our competitiveness. We have to ask ourselves--and unification intensified this--whether we are living beyond our means. We have to concentrate our financial resources, sustain monetary stability and the climate for investment, and bear the financial burdens we took on for eastern Germany, central, eastern, and southeastern Europe, and the former Soviet Union.

Q What is your economic plan?

A We are steering a strict budget course, limiting the rise in government spending to 2.5% a year. We have to get inflation down below 4% this year. Our finances have not spun out of control, and I am determined to keep it that way. You can't win elections in Germany without reasonable economic policy.

Q Are German interest rates too high?

A There are a lot of unfair complaints about the Bundesbank. Long-term interest rates are about the same as in the U.S. My economic policy is directed toward a sound fiscal policy, strict budget cuts, and a reasonable wage policy, so that we can cut interest rates.

Q Did you underestimate the burden of unification?

A Socialism's legacy is very much more devastating in both material and nonmaterial ways than could be foreseen. Everybody, including myself, underestimated the extent to which the economic and, above all, ecological substance of eastern Germany had been destroyed. The state of the railroads and highways is simply unbelievable. However, the main problem of unification is not material, but human. Over 40 years, we drifted much further apart than we realized. Dictatorship and the Stasi secret police marked the east Germans much deeper than we in the west assumed.

Q How do you view Foreign Minister Genscher's resignation?

A It isn't sensational at all. He has been a member of the federal government for 23 years, 18 as foreign secretary. Hans-Dietrich Genscher is now 65, and he's had health problems. There aren't any secrets. If he stays in office, he'll be drawn into the next election campaign at the age of 67. Despite occasional political differences, we've been friends for decades.

Q Wasn't Mr. Genscher most closely identified with East-West relations?

A If you look back over the past 10 years, it is completely clear who was deciding policy on everything important. It was Helmut Kohl who decisively supported implementation of the NATO double-track agreement. Chancellor Kohl has been the driving force for European integration. And it was quite certainly Chancellor Kohl who strengthened the foundations of German foreign policy: the German-American and German-French partnerships.

Q Will Germany have to take a leading role in Europe-U.S. relations?

A Our demographic and economic position has changed enormously through unification and the collapse of world communism. Our basic political values and vital interests have not. United Germany is part of the West. With 80 million people, we are the most populous country in western Europe. We are the strongest economic power in Europe. We no longer have any excuse for not accepting international responsibility. Take the gulf war. We can't be in the United Nations and then when it comes to obligations say it doesn't suit us. Now, we have to clarify our constitution so we can participate in the U.N. with full rights and duties, and I underline duties.

Q What is America's role in Europe?

A There is a lot of stupid drivel about the U.S. and its alleged weaknesses. The U.S. is the strongest country in the world and will remain so. As such, Americans have to play a decisive role in the world. As German Chancellor, it is part of my job to support you. That doesn't mean that we won't have differences over specific issues. But German-American friendship is a basic condition for the political future of my country. I want to deepen that, starting with security. We need NATO for many more years. I want American soldiers to stay in Germany and Europe. I'd like to see greatly intensified German-American economic relations. We talk about transatlantic bridges. They have to stay, but they need more lanes.

Q Can Germany mediate between Europe and the U.S. to extend the General Agreement on Tariffs & Trade?

A My role is not as an intermediary, but as a German in the European Community, which negotiates through its Commission. We need success in the GATT negotiations because we need free world trade as much as we need air to breathe. Any thought of an economic Fortress Europe is unacceptable.

Q What should Japan's role be?

A If we have the same trade conditions in Japan as the Japanese have here, I won't have any worries. We have as many gray cells as they do. Japan has to take on more responsibility. They had relatively little to do, compared with the Europeans and Americans, during the whole cold war period. We are facing challenges from the Third World, from the global environment, for example, destruction of the rain forests, holes in the ozone layer. I cordially invite the Japanese to join their partners in meeting these challenges.

Q What about the fight in the EC between protectionists and free-traders?

A There are no more protectionists in Bonn than there are in Washington, and there are at least as many protectionists among the Washington industrial lobbies as there are in Germany. As far as subsidies are concerned, German industry is like U.S. industry. With us, it is coal. Others have the Strategic Defense Initiative and give big research contracts, the results of which are available for private use later.

Q Why does Europe need common political and defense policies alongside economic union?

A Economic union cannot work in the long run without a political union. History shows that you can't have a common currency and be completely at odds over fundamental political questions. If the EC, the future European Union, has a common currency in 1997 or 1999, it will need basic agreement on fiscal, economic, and budget policies. You need a European central bank. Those are also political decisions.

Q European election results show voters are very concerned about immigration. How are you addressing this?

A Neither Europe nor Germany can solve the problems of the whole world on their soil. Unfortunately, many people who oppose immigration also maintain we should refuse financial aid to these countries. That's stupid. But we made serious errors in Germany because we did not modify our asylum laws fast enough. If people are persecuted on political, racial, or religious grounds, they can still come here any time. This constitutional guarantee will not be changed. But when our constitution was drafted in 1948-49, nobody imagined that 25,000 people would come to us in January, 25,000 in February, and 30,000 in March, for overwhelmingly economic reasons.

Q Are you tired?

A I'm not tired at all. I don't know what sort of impression I convey after 30 years of 15- to 16-hour days. Sometimes my sons say: "Isn't it crazy what you do?" But I'm not complaining. That's the way I wanted it.


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