German Ambassador Tracks Country's Tough Choices

Unexpected costs of reunification prompt need for `solidarity pact'. INTERVIEW IMMO STABREIT

GERMANY'S ambassador to the United States, Immo Stabreit, discussed economic and political issues with Monitor editors in Boston this week. Excerpts follow.

On violence against foreigners in Germany:

The roots are social, not political. The uncontrolled influx of foreigners is one element. Young [east Germans] are disoriented, afraid for the future; they have no jobs; they have no guidance from parents who are also out of work.

There is no centrally organized movement behind all this. It is wrong to say that we have a neo-Nazi movement that endangers the German state.

The young people have found out that if they say "Heil Hitler" they will get into the newspapers; 70 percent of the perpetrators of these attacks are under 20.

We will get hold of this in a very short time. Some 300,000 people demonstrated [against the violence] in Munich, 350,000 in Berlin. The public is getting mobilized.

On the influx of immigrants from Eastern Europe:

If we take a million Romanians, we just transfer the problems into Germany.... Let's not mix these two things [economic and political refugees].

On aiding east Germany:

It is true that too large a part of the transfer of resources to the east has gone to social payments. But we were faced in 1990 with a situation where ... we could have had a flood of 3 or 4 million people on the move within a few months, which would have been incredibly more disruptive than anything we have experienced in Germany since the Second World War. The decision to support people in place was, I admit, something quite questionable in economic terms. But it made sense for social reasons.

The government has slightly changed its policy [on privatization and restructuring in eastern Germany]. We will now take those industries that have not yet been sold off but try hard, and see whether we can keep them going for a limited time, help them and see if they can make it.

On the post-cold-war diplomatic order:

Large parts of east Europe look toward Germany to help them. But the management of the transition in what lies east of us cannot be done by the Germans alone. We have to work very closely together with our Western allies in France and in particularly the United States. I also think that the United States cannot, with the demise of the East-West conflict, abdicate from a leading position. You are now more than ever the only remaining superpower.

Switzerland voted last week to reject closer union with Europe. How does that look from Germany's point of view?

I have no doubt that the process of European unification will go on no matter what happens.... Sooner or later the Swiss will rethink their position.... But I can tell you right away, this comes at a very inopportune time.

What about German interest rates and their effects in Europe and elsewhere?

You can say that high interest rates are stifling the economy in Western Europe, and that therefore American exports suffer; but you have a $20 billion export surplus with Europe. What are you complaining about?

The [German] central bank is firmly determined to continue to fight inflation, and when the government cobbles together a Solidarpakt, a "solidarity pact" [among employers, trade unions, and federal, state, and local governments, to finance reconstruction of eastern Germany], the Bundesbank will lower interest rates. We are close to a Solidarpakt.

On the pullout of the British pound from the European Monetary System (EMS):

Within the EMS, if a currency is weakened because of underlying economic factors, timely and discreet adjustments in the exchange rates should take place. It is the Bundesbank's opinion that the British government not only got into the EMS at a rate which probably was too high but missed out on timely and discreet adjustment. If you wait too long and the pressures become too high, you get an earthquake. Maybe this is unrealistic, but one of the underlying assumptions of the EMS is that national prestige should not play a role in exchange rates.

Are other European countries likely to drop out of the EMS to avoid recession?

They are all in recession, but not because of Germany. You could put it the other way around.... Unification gave an enormous economic push to all of our neighbors. The import figures of Germany in 1990 were sensational.

One of the stories going around is that the [proposed] European central bank is going to be in Bonn. Is that a done deal?

Well, we want to have it in Germany. We want to have it in Frankfurt, and the chancellor has just put his foot down very firmly on that. Now I've heard "Bonn, Bonn," I think the Bonn people are putting this story out. Since I come from Berlin, maybe I should put out a rumor that it will be in Berlin. When the French hear that, they may decide they prefer Frankfurt.

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