Ex-minister Clement regrets sparking SPD row

Former German Economy Minister Wolfgang Clement said on Thursday that he regrets the hurt feelings of his fellow Social Democrats (SPD), which sparked a row that led to his expulsion the party last week.

Published: 7 August 2008 14:28 CEST

Ex-minister Clement regrets sparking SPD row

Clemens apologizes for the hurt. Photo: DPA

Clements said he did not mean to insult the SPD in the German state of Hesse when he attacked the party’s leading candidate, Andrea Ypsilanti, during a close-fought state election in January. But he refused to retract his criticism of Ypsilanti’s energy policy.

“I am sorry if these kinds of emotions were roused,” Clement said at a press conference in Bonn. “I am and will remain a Social Democrat.”

Clement, who arrived at the Thursday press conference by bicycle, was the long-time premier of the German state of North Rhine-Westphalia and for years one of the SPD’s leading politicians.

An arbitration committee from North Rhine-Westphalia decided to boot him out of the party after his Ypsilanti comments, which came under considerable fire from the party’s left-wing.

In a guest column for a conservative newspaper, Clemens had argued that Ypsilanti would hobble the regional economy due to her vocal opposition of coal-fuelled power plans and nuclear energy.

On Thursday, Clemens said it is not true that his op-ed advised voters to steer clear of Ypsilanti. He also refused to back down from his position on coal and atomic energy, referring to them reliable energy sources in a time of increasing uncertainty in the worldwide energy supply.

“An abandonment of these two sources of energy or of others is not defensible,” Clemens said, adding that a switch to renewable energy within 10 years would endanger Germany’s industrial base and imperil tens of thousands of jobs.

Long an SPD centrist, Clement, 68, served as North Rhine-Westphalia state premier from 1998 to 2002 then as the “super-minister” for economy and labour under Schröder until 2005. During that period he incensed the left-wing of the party as one of the architects of former chancellor Gerhard Schröder’s disputed Agenda 2010 economic programme.

Since leaving office, Clement frequently has criticized the SPD’s moves to roll back the economic reforms he helped conceive under Schröder. Calls for his ouster multiplied and after disciplining him in April, the party finally opted to expel him on July 31. He has vowed to appeal the decision.

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Output is expected to expand 0.3 percent this year, the economy ministry said, up from a prediction of 0.2 percent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a “turning point”.

“Signs of an economic upturn have increased significantly, especially in recent weeks,” Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 percent, from a previous prediction of 2.8 percent, and sees the figure falling below two percent next year.

“The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money,” said Habeck.

“So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery.”

Energy prices — which surged after Russia’s 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above one percent, but these were dialled back at the start of the year as the economy continued to languish.

‘Germany has fallen behind’

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers’ index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

German Economics Minister Robert Habeck

Economics Minister Robert Habeck (Greens) presents the latest economic forecasts at a press conference in Berlin on Wednesday, April 24th. Photo: picture alliance/dpa | Michael Kappeler

Despite the economy’s improving prospects, growth of 0.3 percent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

“Germany has fallen behind other countries in terms of competitiveness,” he said. “We still have a lot to do — we have to roll up our sleeves.”

Already facing turbulence from pandemic-related supply chain woes, the German economy’s problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country’s crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, “tight monetary policy has not yet been lifted.”

In addition, disagreements in Chancellor Olaf Scholz’s three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP party, a coalition partner, faced an angry backlash from Scholz’s SPD when it presented a 12-point plan for an “economic turnaround”, including deep cuts to state benefits.

Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of “stabilisation” in the economic forecasts but stressed that projected medium-term growth was “too low to sustainably finance our state”.

“There are no arguments for postponing the economic turnaround,” he added.