Rival Party’s Troubles Aid Schroeder

In the unlikely role of caped crusader, the embattled spirit of former Chancellor Helmut Kohl has swept into this week’s Social Democratic Party convention to rescue his beleaguered successor and political rival, Gerhard Schroeder.

Kohl and the opposition Christian Democratic Union are the targets of a parliamentary inquest into alleged bribery and influence-peddling--a scandal that has taken the pressure off Schroeder as he struggles to unify a party polarized between tax-and-spend leftists and business-friendly reformers.

If not for the distraction of the CDU finance scandal, Schroeder might have found himself virtually alone in his oft-proclaimed “new middle” at the three-day Berlin strategy session that concludes today.

Instead, and much to the relief of the chancellor whose first year in office has been marred by an unbroken string of state election losses, Schroeder procured a vote of confidence from 86% of the party delegates in his unchallenged bid to retain the office of Social Democratic chairman.

Schroeder also won a standing ovation for his 80-minute address in which he professed unshaken commitment to reform the country’s costly practices of “consensus capitalism” that blur the lines among labor, industry and government and saddle all with huge taxes.

But the wildest applause followed his critical allusions to Kohl’s alleged misdeeds during 16 years in office.

“They brought the country to the brink of bankruptcy while they filled their own coffers,” Schroeder told his own party’s faithful at the convention’s opening session Tuesday, referring to the CDU leadership and the rise in national debt during Kohl’s time in office.

The financing scandal has measurably affected the CDU’s standing among voters, the Forsa polling institute concluded in a survey published Tuesday in the Berlin daily BZ. Of those questioned, 85% reported that they had “lost a lot of confidence” in Kohl and his party because of accusations that they hid large donations in secret bank accounts.

Kohl took part in an emergency special session of the CDU leadership in Bonn on Wednesday, but he left his successor as party chairman, Wolfgang Schaeuble, to face the media with the message that the former chancellor had nothing more to say on the subject. Kohl has acknowledged that the party kept secret accounts during his 25-year chairmanship but has vehemently denied allegations that large donations made to the party coffers were kickbacks or bribes.

Schaeuble told journalists that the party is underwriting an internal review of its finances.

Seeking to break the political momentum accumulated by the rival Social Democrats amid the scandal, Schaeuble lashed out at Schroeder for his efforts to capitalize on Kohl’s misfortunes, saying his speech Tuesday “was not appropriate to the responsibility of a federal chancellor.”

Schroeder’s political dividends from the Kohl probe are under threat of being squandered, however, as the left wing of the Social Democrats used the convention to push for a “wealth tax”--a proposal that economic analysts say would further hobble industry and thwart the creation of jobs. Unemployment already exceeds 10%.

“We need victories, not self-organized defeats,” Schroeder replied when the leftists resurrected their call for higher inheritance taxes and an annual percentage levied on the property of well-heeled Germans.

Before the convention, Schroeder had been zigzagging between cuts to the bloated social welfare budget, however modest, and traditional leftist indulgences of labor.

Last month, the chancellor who campaigned for office on promises to ease the restraints on employers to encourage new jobs denounced the takeover of the successful Mannesmann telecommunications giant by Britain’s Vodafone AirTouch. A few days later, he personally directed the state-backed bailout of the bankrupt Philipp Holzmann construction firm and has expressed support for lowering the retirement age from 65 to 60.

Those moves triggered an unusual reprimand from European Central Bank President Wim Duisenberg, who tied last week’s dip of the euro common currency against the U.S. dollar to Schroeder’s intervention to rescue Holzmann.