Facing a Helmut Problem

A year ago, he was on top of his political world. With the strongest major economy in Europe, and a comfortable majority in the Bundestag, West German Chancellor Helmut Schmidt reveled in his reputation as a confident, politically shrewd Macher (doer).

No longer. Schmidt today is in deep trouble. The West German economy is in the doldrums. His coalition government, which was narrowly returned in the national election last October,* is strained close to the breaking point. Schmidt's own Social Democratic Party (S.P.D.) is in disarray, and relations with the U.S. are difficult. Twice last month the Chancellor narrowly avoided humiliating parliamentary defeats. Because of defections within the S.P.D., the government's tax package passed by a scant three votes. Last week, at a tumultuous session of the Bundestag, the coalition defeated a censure motion against Schmidt by a margin of ten.

Many Bonn observers believe the government will not be able to serve out its full four-year term, which ends in 1980. Admits a senior government minister: "We are barely hanging on now."

Some close aides of the Chancellor believe he is so resigned to eventual defeat that he may ask for a vote of confidence in the Bundestag in early fall. According to this scenario, Schmidt would lose and call for a new national election, which the opposition Christian Democratic Union-Christian Social Union alliance would almost certainly win. The reasoning behind this strategy: the new government would bog down in the economic and social difficulties facing the country, and thereby prepare the way for a revamped and refreshed S.P.D. to win a clear majority in the 1981 election, without the need for an alliance with the more conservative Free Democratic Party (F.D.P.). "It sounds weird that Schmidt would even think of this course," says one aide, "but such are the circumstances."

Although it is still the strongest major Western European nation, West Germany faces an unemployment rate that hovers around 4%--disturbingly high for a country that four years ago was importing labor and still has 1.9 million foreign workers. Federal government economists have scaled down Schmidt's confident prediction of a 5% G.N.P. growth rate for 1977 to 4.5% at best. Partly because of joblessness, West German youth are restless. Predicts one top-level federal Education Ministry official: "I think we can expect trouble in the fall when the schools reopen."

Despite his reputation as a tough taskmaster, Schmidt has been unable to impose discipline and unity on the S.P.D. The party's rebellious left wing complains that the government, by cutting back on planned increases in the government's share of medical care and student assistance, is reneging on its promise to pursue a vigorous social reforms policy. In economic policy, Schmidt has been cautiously conservative, fearing that too much stimulation would trigger a high inflationary cycle. Says one disaffected S.P.D. Bundestag member: "Hell, Schmidt could just as well be Chancellor of the C.D.U."

Significantly, party whips had to go all out to round up support for Schmidt on the censure vote that was brought by the opposition on a legal technicality. (The constitutional court ruled that Schmidt, while Finance Minister in 1973, had exceeded his authority by spending beyond the budget without parliamentary approval.)

The troublesome far-left faction of the S.P.D.'s Young Socialists (Jusos) added to the strains on Schmidt last March by electing a militant president, Klaus-Uwe Benneter, who advocates cooperation with the Communists. That was too much even for other left-wingers in the S.P.D.: Benneter was fired from his post and ejected from the party. Meanwhile, Schmidt's F.D.P. coalition partners have been pressing the Chancellor for even more restraint in social policy and further tax cuts. To exploit these differences, the opposition has been courting the F.D.P., in hopes of breaking up the coalition and thereby forming a new Christian Democratic government with F.D.P. support. So far the F.D.P. has resisted, but as one Schmidt loyalist in the Bundestag puts it, "Those opportunists are just waiting to jump to the other side."

Stricter Controls. Meanwhile, Bonn's relations with Washington remain cool. Although Carter at the London summit in May eased up on his demands that Schmidt should reflate the German economy, deep differences on nuclear policy remain. Bonn two weeks ago announced it would stop "for the time being" export of nuclear reprocessing and recycling plants. Schmidt insists that the Carter goal of a permanent ban is "unrealistic," since countries seeking atomic technology can easily buy it from the Soviet Union. When the two leaders meet in Washington in mid-July, Schmidt will repeat his argument to Carter that nonproliferation should be ensured through stricter controls.

These assorted travails have left a visible mark on the Chancellor. His much-admired confidence now seems more like grating arrogance; he seldom flashes his famed toothy grin, and often appears wan and uncharacteristically glum. Says an aide: "He is deeply troubled, nothing goes right for him."

Not quite nothing. Burly Christian Democratic Leader Helmut Kohl, who opposed Schmidt in last October's election, has proved to be an ineffectual performer in the Bundestag, unsure of his tactics, unable to exploit the government's mistakes and weaknesses. Kohl must also cope with the open contempt and sideline sniping of right-leaning Franz Josef Strauss, chief of the Bavarian-based Christian Social Union. Strauss believes that Kohl is too weak and not conservative enough. A number of Christian Democrats agree with the first of these charges, but they are unlikely to change leaders so soon after last year's election. Thus West Germans face the prospect of being governed by one of two Helmuts, neither of whom seems in control of his own party.

*The 224 seats won by the S.P.D. and the 40 secured by the Free Democrats give the coalition a thin majority over the 254 seats held by the Christian Democratic Union-Christian Social Union bloc.

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