After a year in power, German Chancellor Gerhardt Schroeder speaks candidly with CNN's Chris Burns about a range of issues

October 29, 1999
Web posted at: 11:25 a.m. EDT (1525 GMT)

In this story: Reunification dominates political landscape Schroeder calm about defeats Chancellor banking on austerity RELATED STORIES, SITES

BERLIN, Germany (CNN) -- During his first year in office, German Chancellor Gerhard Schroeder has seen his domestic popularity sink as the country's double-digit unemployment rate continued, and relations with the United States have suffered in the face of a series of espionage and diplomatic conflicts between the two allies.

VIDEO CNN's Chris Burns interviewed Gerhard Schroeder on his first year in office and the future of Germany. Windows Media 28K 80K     MESSAGE BOARD Germany today

But Schroeder, speaking through a translator, told CNN's Chris Burns that despite "the odd difference of opinion," during his first twelve months in power, relations between Berlin and Washington are "very good."

"If you look at what has happened in the recent past, during the Kosovo crisis for example, we have really shown a high degree of competence in cooperation between here and the United States of America. Of course, like in all relationships, there is the odd difference in opinion."

Intelligence matters have been central to the problems in the relationship. German officials have confirmed that the CIA pulled three spies out of Germany after they were caught by German authorities.

Berlin has also attempted to persuade the CIA to share its knowledge of the code names used by the Stasi secret police in the former East Germany, so far unsuccessfully.

And on the diplomatic front, construction of the new U.S. embassy in Berlin has been delayed by German refusal to move a street to allow for a 30-yard security zone.

Reunification dominates political landscape

Schroeder is the first German chancellor in 50 years to have his office in Berlin, following the completion, earlier this year, of the federal government's relocation from the West German capital, Bonn.

The return to Germany's traditional capital is one of the most visible signs of the changes since reunification, a transition which began ten years ago next month, and whose impact still dominates the domestic political landscape facing Schroeder.

Asked how long it will be before Germany is truly unified, Schroeder was cautious. "I think you have to differentiate between the integration of the two states and between the two peoples that exist, the emotional integration.

"I think the younger generation finds it a lot easier. Those who are 15, 20, 25 years of age, I think they have very few problems, if any, in dealing with one another. But I think if you think of the older generation.......I think the older ones find it a little more difficult to get to one another.

"But I wouldn't actually go in and say it'll take a generation. Certainly some years, though."

Schroeder calm about defeats

Despite a string of defeats for his Social Democratic Party in local, regional and state elections during his first year in office, Schroeder, who does not face another mandatory election until 2002, appears calm.

"There was this huge gap between people's expectations on the one hand, and what pragmatically (could) be done, particularly what can be done quickly within a democratic state."

"I think it is this very gap between expectation and what is reasonable in there, (which) has accounted for the losses we experienced in recent elections."

Schroeder admits he has made mistakes: In a public relations maneuver that misfired, he stopped going on television talk shows.

His relations with the traditional left-wing of his party were hurt when he signed a market-oriented reform agreement with Britain's Prime Minister Tony Blair without consulting his party.

Schroeder's relationship with his coalition partner, the Green Party, has lurched from one crisis to the next, but he said he is confident that his government will last.

"I'd certainly say the coalition will last four years. And I think, by then, we will be in a situation where the economy and its figures are going to speak for themselves. And then I very much think that we may be starting for a successful basis and competing for re-election into office."

Chancellor banking on austerity

The Chancellor is banking on his proposed $16 billion austerity package, which slashes federal spending and cuts taxes. Schroeder hopes the package will stimulate the economy and cut unemployment, now at over 10 percent, but the proposal has already attracted considerable opposition within his government and from labor unions.

"If you start such a tremendous reform project, then you will always face the resistance of many people who do not like that. There is going to be resistance from whoever is affected by it, and that is also one of the reasons why, in regional elections recently, some people have so strongly uttered their discontent.

"But the job of the government at that point is not, by any means, to give in, but it is very important to still go in and what I call make Germany fit for the next millennium. And if occasionally that has to happen against interest groups in our society, then that is fair and well."

Correspondent Chris Burns contributed to this report.

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