A Vote for the Upswing

For weeks party leaders in West Germany's ruling coalition had campaigned in the North Rhine-Westphalia state elections as if their claim to national power depended on it. Chancellor Helmut Schmidt's Social Democrats had slipped badly in seven previous state elections during the past year, and there were fears that the Tendenzwende (change in the trend) could snowball into a crushing defeat in next year's national elections.

Last week the Social Democrats and their coalition partner, Foreign Minister Hans-Dietrich Genscher's Free Democrats, turned the Tendenzwende around. In North Rhine-Westphalia, West Germany's largest state (pop. 17 million) and industrial heartland, the Social Democrats and Free Democrats preserved their 105-to-95 seat edge over the opposition Christian Democratic Union. The same day, in elections in the Saarland, where Christian Democrats have ruled since 1947, the voters turned the C.D.U.'s 27-to-23 majority into a 25-to-25 deadlock. At week's end it was still unclear which party would be able to form a state government, but as a result of the election, the Christian Democratic majority of one in Bonn's Bundesrat will probably be wiped out.

The two state elections were the last major tests of public opinion before the 1976 elections. Both contests were fought almost exclusively on countrywide issues: the economy, recession and inflation, unemployment, internal security against anarchist terrorists and the question of the growing left-wing influence within the S.D.P. The Chancellor's firm stand against the demands of terrorists who seized the West German embassy in Stockholm late last month took much of the steam out of the opposition's charges of "impotence" and "leniency." In addition, Schmidt's government released figures from the country's economic research institutes predicting a "limited but stable upswing in the second half of the year." The projections showed an inflation rate of 5% or less (down from the present 5.9%), unemployment at 4% (currently 4.7%) and economic growth of perhaps 1% (.6% last year). All of which helped to justify the government claims that West Germany's current management deserved confidence.

Even opposition critics find it hard to fault Schmidt's handling of the economy. Since taking over from Willy Brandt last May, Schmidt, 56, has whipped the Cabinet into shape, told off his party's left-wingers, and zipped through the Bundestag a tax-reform program that had been stalled for years.

Big Ifs. In mid-1974, when the economy seemed headed for a real slump, Schmidt and Finance Minister Hans Apel took the brakes off credit and then at the end of the year shifted into a full reflation program. If their projected Aufschwung (upswing) does come this fall--and especially if now returning consumer confidence puts some of the nation's huge personal savings back into circulation--the revival of the giant West German economy will give all Western Europe a big boost toward recovery.

All these are big ifs. Although Schmidt has emerged as a European leader with clout--some European papers even refer to him as "Super-Schmidt"--the Chancellor has not resolved all his problems. The major ones:

1) Europe's recession has put 1 million West Germans out of work; 2) the government's domestic reforms, particularly of taxes, have failed to alleviate the burden of low-and middle-income workers; and 3) the noisy left wing of the S.D.P. scares away middle-class voters with talk of nationalization, directed investment and an end to NATO.

The Christian Democrats have yet to convert the S.D.P.'s problems to their own profit. Under the lackluster leadership of Helmut Kohl, the C.D.U. has produced no clear platform, economic proposals or solutions of its own. Moreover, Kohl's chief rival for party leadership, the demagogic Bavarian conservative Franz-Josef Strauss, frightens most West Germans even more than the left-wing Jusos of the S.D.P.

Buoyed by the state election results (and by a new poll that showed his popularity at 68%, up from 47% when he took office a year ago), Schmidt promptly declared that his legislative program had "won scope for action." He announced his intention to push several controversial bills through the Bundestag--notably reforms in vocational education and a measure that would give workers an equal say with shareholders on the boards of major companies.

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