INTERVIEW     “This Reform Policy Is Right And Necessary”
	Gerhard Schroder spoke with TIME's Andrew Purvis and William Boston about the election, his reforms — and whether Angela Merkel would make a good Chancellor

Posted Sunday, May 29, 2005; 09.37 BST

	MAX LAUTENSCHLAEGER FOR TIME

Why call an early vote? After the election in North Rhine–Westphalia, the question has arisen of whether there is sufficient support for my reform policies, a question that's controversial in the political parties and in the coalition. So I think it makes sense to clarify the issue, and it can only be clarified through a decision by the electorate. That's what this is about, because I think this reform policy — and only this reform policy — is right and necessary for our country.

why not wait another year, when elections are due anyway? Just waiting in an unclear situation would not be the best thing for the country. A discussion between the parties and in the parties would have emerged that would not have advanced a clear policy.

You're trailing by 18 points in the polls. Can you close the gap? The situation is very volatile. We had the same distance to cover [in the general election] in the summer of 2002. Agenda 2010 [a government action list for reforming the labor market and social system] is the foundation of our program. We should stay on the path of modernization without abandoning social equilibrium. If Schröder's on the label, Schröder has to be in the box.

but Agenda 2010 is what people are angry about. I wouldn't put it like that. Look, in these elections state issues and federal issues got mixed up. And in health reform and labor-market reform, the first successes of the Agenda are becoming visible. During the election campaign, we will succeed in demonstrating the necessity of our program.

Which successes do you mean? Take health-care reform. In 2003, we had a deficit [in the public-health insurance companies] of €2.5 billion; now we have a surplus of €2.5 billion. In labor-market policy, we've had a significant decline in youth unemployment — more than 10%.

what went wrong in North Rhine–Westphalia? In time it will become clear to everyone just how much has happened [since the spd came to power in 1998]. From the very beginning we had to deal with the Balkans, including our military engagement in Kosovo. We had 9/11 and its consequences; the confrontation over Iraq and its consequences. We had a short phase in which the new economy emerged and three years of economic stagnation. But the most decisive thing is, after 16 years of Helmut Kohl many things had been left unattended. But I had to clarify questions of power in the coalition before I could deal with them. The unfinished business was especially in the areas that we began to deal with in Agenda 2010.

Why are so many voters turning against you? The most important thing is to understand that Germany is a country in which, for a very long time, there was sufficient room for redistributing wealth. This is no longer the case, for two reasons. First, globalization and the economic changes it has caused, and second, a long-term development that affects the aging of the German population. These two developments have cast doubt on our old certainties and security. The job that Agenda 2010 sets out to accomplish is to make clear, to people who have lost this certainty, that the measure of social
security that is objectively possible is only achievable through change. Only through the reform process that we have begun can the old certainties be replaced with new certainties and security.

Ninety-two percent of Germans think you can't win. Do you really have a chance? [Laughs] If I didn't believe that I wouldn't have made this decision.

Would Angela Merkel make a good chancellor? I don't want it to happen! But history will tell.

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