Two different worlds were visible in Germany last weekend – with a huge gap separating the one from the other. In Berlin, the SPD leadership were celebrating the party’s 140th anniversary. As party leader and chancellor Gerhard Schröder defended his counter-reformist "Agenda 2010" and praised Tony Blair’s "New Labour" as a successful example of "modern" social democracy. At the same time, up and down the country, some 90,000 workers responded to a call by the Trade Union Federation, the DGB and demonstrated against Schröder’s attempt to dismantle the welfare state. In East Germany, 84% of all steel workers organised in the IG Metall voted in favour of industrial action for the 35-hour week which had been introduced in the West back in the 1990s.

Only a few days prior to the national wave of union demos, DGB chairman Michael Sommer threatened that by insisting on his Agenda 2010 Schröder ran the risk of breaking the special ties which have existed between the SPD and the trade unions since the 19th century. In spite of all this Schröder seems to be hell-bent on maintaining his image as an iron chancellor. He is trying to present himself as being immune to union pressure and is insisting on carrying out his full programme and that it be passed by parliament in the coming weeks.

Originally introduced to the public in a speech to the Bundestag on March 14, all the implications of Schröder’s Agenda 2010 were not fully grasped by most activists for weeks as the movement against the war in Iraq was concentrating the full attention of many trade unionists. Yet what Schröder is proposing amounts to a massive attack on the welfare state. It contains a number of points which until recently only hardliners in the employers’ federation and the most reactionary elements within the bourgeois opposition parties would have put forward.

Many of those who were blinded by Mr Schröder’s "pacifist" attitude on the war question (which was not consistent, and in reality amounted to indirect support for the war at different levels) and who had hoped that Schröder's "Blairism" was a thing of the past are now beginning to realise that the "red-green" coalition is in fact pursuing a Blairite agenda.

Horrified by high unemployment and the fear of recession and even depression, Schröder and his think tanks are now doing what they had always accused the previous Kohl government of doing: they are attacking the unemployed and not unemployment. They claim that dismantling the welfare state and massive tax reductions to the benefit of employers and the rich in general would open the path towards economic growth and a new jobs miracle. In doing this, they can count on the applause of the bourgeois media and politicians who keep pushing them further and further down that road.

Already leading SPD spokesmen have announced that this was only the beginning of a long period of so-called "reforms" (by which they mean counter-reforms, of course).Agenda 2010 includes elements such as:
- Massive attacks on the unemployed that will drive many of them into permanent poverty and misery and/or force them to join the ever-increasing camp of the "working poor".
- The elimination of sick benefit (after more than six weeks of illness) which will force workers to save more money or go for supplementary private insurance.
- Protection against wrongful dismissal will be increasingly undermined – allegedly to "help" the employers to create more jobs.
- At the same time, massive cuts in health and pensions are being discussed (as everywhere else in Europe) and have already been announced.

Union activists and quite a few party members are saying that this is not what Schröder was re-elected for last September. The union leaders, however, are faced with a dilemma: for years they had hoped that with a policy of moderation and consensus and collaboration Schröder would lend them his ear and make compromises to appease union militants. Now Schröder appears determined to push through his programme without union consent.

Thus, the union leaders found themselves attacked and exposed by Schröder and the bourgeois camp alike and had no choice but to voice opposition and start a bit of a public campaign against Agenda 2010. Trade unionists in the party executive such as DGB deputy chairperson Ursula Engelen-Kefer and Ottmar Schreiner, leader of the party’s workplace branches (AfA), formed a small but significant opposition when Agenda 2010 was put to the vote there.

Wherever class-conscious union activists have seriously discussed the issues at workplace level, they have managed to create a mood of opposition and determination. On May Day rallies, SPD leaders like Schröder and his right wing Minister of the Economy and Labour, Wolfgang Clement, were hissed at by young and old trade unionists alike.

After a number of regional protest demos and rallies over the last few days, however, top union leaders as well as more moderate elements and social democratic loyalists in the regional apparatuses were hesitant to step up the mobilisations, arguing that "we do not like Agenda 2010 but we must not bring down this government either".

Demands for a more radical line of resistance, including a national one day general strike as put forward by the national youth conference of ver.di, the biggest single union, as well as a number of local unions are being ignored by the top leaders. Whereas – at least verbally – the two biggest unions, IG Metall and ver.di, displayed quite some energy to get a decent mobilisation for May 24 at short notice, the leaders of three smaller unions (chemical workers and miners, railways, food, tobacco and restaurants) made a joint statement calling for more moderation and compromise with the Schröder government. DGB leader Michael Sommer announced in interviews yesterday that while not being happy with the decisive sections of Agenda 2010 he would advocate a break in the mobilisations over the summer period to see what happens in autumn! Yet there is no reason to stop the mobilisations now as they have only just begun! The Schröder apparatus has made vague statements to appease trade unionists and leftists, but they have made it clear that the most decisive and harshest parts of Agenda 2010 will not be cancelled.

Crisis in the SPD

Just when it has been celebrating its 140th birthday, the SPD is finding itself in one of the most serious crises in its history. 60,000 members are said to have left the party since last winter, including many active and long standing members. However, the party apparatchiks in the Berlin headquarters do not seem to be worried about that at all, given the fact that some of the more critical "troublemakers" have run away, leaving the remaining party branches in the hands of the more loyal and/or yuppie elements. But even with this there is still no peace and harmony in the party. The Schröderites have found themselves compelled to respond to increasing demands from the regions and hastily organised a special conference for June 1 to get "Agenda 2010" officially endorsed.

At the same time, a group of slightly "harder" lefts in the parliamentary party and some prominent trade unionists have launched a petition for a referendum of all party members to vote on Agenda 2010. Schröder has repeatedly indicated that he would resign if Agenda 2010 were not endorsed by the party conference and the parliamentary party. This blackmailing will undoubtedly have an effect and is likely to "convince" many delegates to vote in favour of the big chief and the "party line". Party general secretary Olaf Scholz, a former left wing phrasemonger in the early 1980s and supporter of the then Stalinist "Stamokap" wing in the party youth (Jusos), is doing his utmost to ensure that the conference is handled according to the master plan. Yet this likely "victory" will not be the end of the story but only a short episode in a much bigger drama.

One person who should have been invited to the anniversary celebrations but was deliberately excluded by Schröder and Scholz was Oskar Lafontaine who had resigned as Minister of Finance, party chairman and MP some 4 years ago in protest against Schröder’s shift to the right even then. Having lived a comfortable life in early retirement, Lafontaine is now beginning to return to the political arena, sharpening his profile as a personified alternative to Schröder. At the recent Frankfurt Easter March concluding rally against the war, as well as at union demos over the past few weeks, Lafontaine got lots of ovations for his attacks on Schröder’s policy. Whereas Schröder embodies Blairism, Lafontaine embodies the nostalgic desire of many workers to return to the good old days of the 1970s when Social Democracy was identified with such figures as Willy Brandt and what were in fact real reforms to the benefit of the working class. Although his speeches do not contain clear anti-capitalist, let alone Marxist perspectives, Lafontaine presents himself as a "working class champion", denouncing the profit greedy capitalists, warning against a possible depression like the one in the 1930s, and putting forward what amounts to Keynesianism.

However, it remains to be seen whether Lafontaine will actually be compelled to do more than just deliver militant speeches, i.e. whether he will seriously organise some sort of left wing opposition to challenge the Schröderites. It also remains to be seen whether Lafontaine's friend Ottmar Schreiner will stick to his promise to vote against Agenda 2010 in parliament, thus providing some pole of attraction.

The mess that the SPD finds itself is a golden opportunity for the more left wing Socialist Party (PDS) to attract thousands of disenchanted social democratic workers. And yet the PDS itself is bogged down in a deep crisis. Instead of concentrating all the resources of the party on campaigning against Agenda 2010 and closing ranks with the unions and putting forward a real socialist alternative, the more moderate section of the PDS are now trying to oust some left wing elements who hold positions such as the party general secretary and deputy chair. An emergency PDS conference this summer will concentrate on personal intrigues, accusations and cliquism rather than on political answers and a socialist profile. There is a layer of PDS politicians who have well paid full time positions in parliament, and in local and regional government in its strongholds in the East and want to get rid of what some of them regard as the legacy of "Bolshevism".

Thus, and not surprisingly, the crisis of capitalism is penetrating the unions, the SPD, and the PDS all at the same time. The bosses and Schröder know what they want. If the union leaders only had a fraction of the class consciousness and determination that the leaders on the other side of the barricades have in defending their class interest, there would be a strong mass movement now to stop Agenda 2010, to reclaim the SPD and to get the unions back onto the offensive. And in spite of all their attempts to stifle movement from below, the leaders of the SPD and the trade unions will not be able to stop the inevitable explosion which is surely coming.