Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Friday, March 12, 1999 Published at 05:07 GMT


World: Europe

Resignation rocks German Government

Oskar Lafontaine: Gave no reason for quitting

German Finance Minister Oskar Lafontaine has resigned after a prolonged power struggle with Chancellor Gerhard Schröder over economic policy.


Caroline Wyatt in Berlin: His interventionist style was deeply unpopular
Mr Lafontaine, 55, the most powerful man in the German Government after Mr Schröder, has also quit his chairmanship of the Social Democratic Party (SPD).

The surprise resignation had an immediate impact on the money markets, with the Euro - for whose weakness Mr Lafontaine was blamed by many analysts - rising from $1.0880 to $1.0930 in New York.


[ image: Lafontaine and Schröder: Public solidarity, private rivalry]
Lafontaine and Schröder: Public solidarity, private rivalry
Speaking shortly after the resignation, Chancellor Schröder said the German Government would remain stable and that the SPD would propose a successor to Mr Lafontaine on Friday.

The decision will be made in a "friendly and united" atmosphere, he said.

BBC Berlin Correspondent Caroline Wyatt says the chancellor's authority will be bolstered by the resignation of his powerful rival.

The SPD heads the centre-left coalition which took office in October, 1998, ending 16 years of conservative ruler.


German Chancellor Gerhardt Schröder gives his reaction to Lafontaine's resignation
Mr Lafontaine wrote his resignation in a three-line letter which simply thanked the SPD's membership for their "trust and friendly co-operation".

It ended: ''I wish you successful work for freedom, justice, and solidarity. Yours, Oskar Lafontaine."


BBC Newsnight's David Sells: His resignation comes as a bombshell
No reason was given for the resignation, but newspapers reported that the chancellor had warned Mr Lafontaine during a Cabinet meeting on Wednesday that his leftist policies - particularly on taxes - were alienating voters and industry.

In stern tones, Mr Schröder accused Mr Lafontaine of making a "strategic error" in raising taxes on the energy industry during negotiations on phasing out nuclear power, Die Welt reported.

Power struggle

The cabinet outburst followed a power struggle between the chancellor and Mr Lafontaine and months of wrangling between his Social Democrats and the ecologist Greens.


[ image:  ]
Mr Schröder's centrist policies are aimed at establishing a good business climate, while Mr Lafontaine's traditional leftist politics lean more towards relieving average earners.

Mr Lafontaine took over the SPD at a low point in its political fortunes in 1995.

But he reluctantly put aside his own ambitions for the chancellery in favour of the more popular Schröder - setting the stage for a simmering rivalry that continued after the Social Democrats' election victory last fall.

Shock and surprise

The resignation may also throw the governing coalition between the Green Party and the SPD into doubt.


The BBC's Caroline Wyatt in Berlin: "It sounds like he was pushed"
Green MP Frieder Otto-Wolff said he was shocked and surprised as Mr Lafontaine had been one of the fathers of the red-green coalition.

"I think it will be very difficult indeed to continue the coalition without him," he said.


[ image:  ]
However, German opposition politicians have welcomed the resignation.

"Lafontaine's resignation is an admission that Schröder's government has failed," said Wolfgang Schaeuble, head of the main opposition Christian Democrats.

"Lafontaine's one-dimensional demand policy failed because it blew public finances, created no jobs and damaged Germany as a place to do business," said Free Democrat party leader Wolfgang Gerhardt.

Reports said his departure from the German Government would leave him free to challenge former Italian Prime Minister Romano Prodi for the coveted role of next President of the European Commission.

'Most dangerous man in Europe'

Mr Lafontaine was branded "the most dangerous man in Europe" by one British newspaper when he outraged UK eurosceptics by suggesting that the country should lose its power to decide its own tax rates.


Political Correspondent Jon Sopel: No tears shed by British ministers
The British government has reacted to the news of Mr Lafontaine's resigation by saying, publicly, that it is an internal matter for the German government.

However, BBC Political Correspondent Jon Sopel said his departure is being greeted with barely concealed delight by British ministers as he was seen as being anti-business and having old labour values.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©




Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia



Relevant Stories

12 Mar 99 | The Economy
Resignation prompts euro rebound

11 Mar 99 | The Economy
Why business didn't like Lafontaine

11 Mar 99 | UK Politics
Few British tears for 'Red Oskar'

11 Mar 99 | Europe
The demise of 'Red Oskar'





Internet Links


German Parliament: Profile of Oskar Lafontaine [German]

Social Democratic Party [English]


The BBC is not responsible for the content of external internet sites.




In this section

Violence greets Clinton visit

Russian forces pound Grozny

EU fraud: a billion dollar bill

Next steps for peace

Cardinal may face loan-shark charges

From Business
Vodafone takeover battle heats up

Trans-Turkish pipeline deal signed

French party seeks new leader

Jube tube debut

Athens riots for Clinton visit

UN envoy discusses Chechnya in Moscow

Solana new Western European Union chief

Moldova's PM-designate withdraws

Chechen government welcomes summit

In pictures: Clinton's violent welcome

Georgia protests over Russian 'attack'

UN chief: No Chechen 'catastrophe'

New arms control treaty for Europe

From Business
Mannesmann fights back

EU fraud -- a billion-dollar bill

New moves in Spain's terror scandal

EU allows labelling of British beef

UN seeks more security in Chechnya

Athens riots for Clinton visit

Russia's media war over Chechnya

Homeless suffer as quake toll rises

Analysis: East-West relations must shift