Germany has three major left-wing parties – the SPD, the Left, and the Greens. Each of them has declared that they are in principle prepared to form a coalition government with one another after the next federal elections. Yet, from their statements on the current pandemic, it is clear that all three parties of the left have little to offer in terms of specific proposals for overcoming the corona crisis. Instead, they are exploiting the current outbreak to reassert their longstanding anti-capitalist agendas.
The Social Democratic Party, the SPD, is currently the junior coalition partner in Angela Merkel’s CDU/CSU-led government. They have increasingly drifted from the political center ground to the hard left in recent years, undergoing a development much like that of the Labour Party in Great Britain under Jeremy Corbyn. Yet, ironically, the SPD also shed many of its traditional voters to the Greens in elections and polls last year.
The new co-leader of the SPD, Saskia Esken, has called for a “fair distribution of the financial burden” in dealing with the coronavirus crisis. She has called for Germany’s wealthiest citizens to pay a one-off property tax.
“We will need a fair distribution of the financial burden – and for the SPD, this means that the strongest shoulders in Germany need to bear the heaviest burden,” she said. Esken also stated that a one-time property tax on the particularly wealthy would be “one way to help get public finances back on track after the crisis.”
Olaf Scholz, also from the SPD and currently Federal Finance Minister in Angela Merkel’s cabinet, has admitted that he is in principle open to the idea of a one-off levy on Germany’s wealthiest citizens. But has also said in interviews that now was the wrong time to discuss such measures. He would prefer to wait until after the crisis is over.
The German Institute for Economic Research (DIW), which enjoys close links to Germany’s trade unions and the SPD, has, however, already outlined in very specific terms what such a coronavirus tax for the rich could look like. According to the DIW, the top ten percent of income earners should pay a corona surcharge, which would levied at a rate of 7.5% of their annual income tax payment.
And that is not all. The DIW’s proposals call for an extra wealth tax on the top one percent of German taxpayers. Anyone with net assets of at least €2.5 million would be subject to the new levy.
If the DIW has its way, the tax could work as follows: let’s assume someone has assets of €22.5 million and that the government grants a tax allowance of €2.5 million. The remaining €20 million would be subject to a 20% levy. This would have to be paid off over 20 years. The DIW regards this one-off calculation and the 20-year payment schedule as a way to prevent wealthy Germans from evading the extra taxes by switching their registered tax domicile.
“Thus, they will achieve nothing by moving their residence abroad, giving away assets or pursuing other methods to minimise their tax liabilities,” says the DIW. A fiscal wall for the rich, so to speak, in addition to Germany’s existing expatriation tax.
This is likely to please, Die Linke (The Left Party) – the successor to the communist SED which governed in East Germany before German reunification and has changed its name several times since the fall of the Berlin Wall. The party openly advocates the introduction of a socialist system in Germany.
In the fight against the economic upheavals caused by the coronavirus crisis, the leader of Die Linke, Bernd Riexinger, has also proposed the imposition of a new “millionaires’ levy.” If Riexinger has his way, anyone with private assets worth one million euros and above should be charged with a one-off levy of five percent.
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According to Die Linke, capitalism is responsible for all of the evils in the world, which means it must also be to blame for the coronavirus crisis. Bastian Reichardt, co-spokesman of the Anti-Capitalist Left (AkL), one of Die Linke’s most influential wings, explained “that the current crisis has its roots in the capitalist system and has only been further intensified by the coronavirus pandemic.”
Die Linke, Reichardt said, “must now seize the opportunity to establish its policies in the mainstream. As this crisis intensifies, the party must demonstrate that it has always been on the right side of history.”
Reichardt’s statements are typical of the confused ideas now emerging from Die Linke’s ranks. And he is by no means alone: one Die Linke member of the Hamburg parliament, Mehmet Yildiz, used an interview with the Turkish language news portal Avrupa Postası to explain:
“This virus did not appear by itself; COVID-19 is a virus that was created in a laboratory and serves the imperialists in their war on China and in their desire to intensify the class struggle from above.”
This statement was so obviously crass and conspiratorial that the party leadership in Hamburg quickly distanced themselves from Yildiz’s wild speculations.
But the leadership have anti-capitalist visions of their own. Katja Kipping, co-leader of Die Linke in partnership with Bernd Riexinger, has repeatedly stressed that the crisis will never be overcome with market-based instruments.
Instead, Kipping wants the state to determine what companies produce, and recently declared that “Companies that aren’t really contributing anything to the fight against the coronavirus pandemic should be required to produce goods that are needed in this crisis. Weapons manufacturers, such as Rheinmetall for example, should switch their production to medical equipment.”
Die Linke’s parliamentary party leader in the German Bundestag, Amira Mohamed Ali, even called on the government to confiscate facemasks. She believes that “Measures to protect people’s health must not be at the mercy of profit interests!”. She urged that “The Federal Government must intervene. Nothing should be off the table, not even the confiscation of ventilators!”
Then there is Die Grünen (The Green Party), which combines a commitment to environmental causes with left-wing social and economic policies. In elections and polls last year, it was the Greens who managed to increase their share of the vote by the largest margin among all national parties.
As the saying goes, “If your only tool is a hammer, every problem looks like a nail.” And in the case of Germany’s Green Party, whose raison d’être is to get rid of nuclear power, the main concern is that Germany’s remaining nuclear power plants should be shut down immediately in the wake of the coronavirus pandemic.
Specifically, the Greens are calling for nuclear power plants in Emsland, Grohnde and Gundremmingen to be shut down by the end of the crisis. These nuclear power plants, writes the Greens’ Sylvia Kotting-Uhl, in a recent letter, could easily become “hotspots in the continued spread of the coronavirus.”
The three power plants are not needed during the current crisis, explains Kotting-Uhl, referring to the current decline in power consumption in Germany due to the closure of scores of factories and commercial operations. “Under the current circumstances, Germany’s nuclear power plants are less relevant to the system than ever before,” concludes the Green politician.
The Green Party’s leader, Robert Habeck, has all the while repeatedly spoken out in favour of extensive and immediate state support for industries that have been particularly impacted by the consequences of the novel coronavirus. Habeck has also called for the chaos unleashed by COVID-19 to be used as an opportunity to switch to “sustainable” energy.
To help the hotel industry, Habeck identified the need for “an unbureaucratic and temporary hotel-of-the-future programme to promote investment.” With appropriate state subsidies and guarantees, small and medium-sized businesses could use the time now, when capacity is not being fully utilized, to make necessary investments. For example, renovation and conversion works could be brought forward and outdated oil heating systems could be replaced, he suggests.
Habeck is also a passionate supporter of what have been dubbed the “corona bonds,” the latest iteration of the old “Eurobonds” idea. The introduction of corona bonds would effectively leave German taxpayers liable for the debts of other European countries, such as Italy, Spain and Greece. And Habeck is not alone in his calls for corona bonds – his position is shared by Die Linke and sections of the SPD, although the governing CDU has so far rejected any and all such proposals.
The demands currently being made by the SPD, the Green Party and Die Linke all have one thing in common: they represent long established party positions and ideological ambitions. The content is nothing new, only the justification has changed. The corona crisis provides the perfect opportunity to frame new justifications for old demands.
Dr Rainer Zitelmann is an historian and sociologist as well as a successful businessman and real estate investor. His most recent book is The Power of Capitalism, published by LID publishing.