Cut taxes, increase spending? Where have I heard that before? Unemployment levels are at rates not seen since the 30's! That's scary. This decision was surely made due to the upcoming elections and people really fed up with Gerhard. In some areas of the country unemployment is 25%! In September I reported on a poll that said 1 in 5 Germans want the wall back.

NY Times

With one eye on the persistently stagnant German economy and another on an important coming state election, Chancellor Gerhard Schröder proposed both new tax cuts and new spending measures on Thursday in an effort to stem this country's relentless tide of unemployment.

In a much anticipated speech to the German Parliament, Mr. Schröder said he wanted to reduce corporate taxes to 19 percent from their current 25 percent to improve business competitiveness. He also announced a $2.6 billion program for rail and road expansion as well as measures to aid small businesses and the long-term unemployed.

...

Recently released figures show the country's jobless numbers rising above five million for the first time, or 12.6 percent of the work force. In some places, especially in the former East Germany but also in industrial rust belt districts in the former West, the unemployment rate is above 25 percent.

Mr. Schröder, largely because of his perceived failure to reduce unemployment, has also faced a slow erosion of public support. A new poll indicates that if elections were held today, the Christian Democrats would win 41 percent of the vote and the governing Social Democrats 32 percent.

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