Unhooking the Locomotive

The sudden resignation of Karl Schiller could hardly have come at a worse time for Willy Brandt. Since his parliamentary majority has evaporated, he is committed to holding new federal elections in November. Schiller's departure is likely to hurt Brandt's chances of again defeating the powerful Christian Democrats and their Bavarian allies, the Christian Social Union, since he is losing what Germans call an "election locomotive." The slim and still boyish professor, who rescued the West German economy from its 1967 recession, pulled in the votes in the last federal election, which gave the Social Democrats their upset victory in 1969. Once in office, Schiller helped calm the fears of West German businessmen about Brandt's Socialist regime by his nondoctrinaire approach toward economic issues, notably taxes.

But even election locomotives can get untracked, and in recent months Schiller has lost some of his popular appeal. He has been unable to halt the country's worrisome inflation, which is now running at an annual rate of more than 5%. He has irritated fellow Cabinet Ministers by imperiously demanding cuts in their budgets and antagonized the rank and file of the Social Democratic Party, who have long suspected Schiller of being too probusiness in his thinking. More important, he clashed with Brandt on the question of monetary policy; when other European countries began imposing financial controls to halt the inflow of unwanted, inflation-breeding dollars, Schiller refused to erect any sort of barrier against the free flow of capital into West Germany. Two weeks ago, at a showdown Cabinet session, Brandt sided with German Central Bank President Karl Klasen, who proposed a set of mild--and so far ineffectual--controls on capital movement. These were immediately enacted over Schiller's protest.

Sensitive and vain, Schiller withdrew to his Bonn apartment, where he composed his letter of resignation; it was kept secret to avoid embarrassing Brandt during the Pompidou visit. At week's end, however, Brandt called a press conference to accept publicly Schiller's resignation. Insisted Brandt: "The change in office does not mean a change in policy."

To fill the two vacancies left by Schiller's departure, Brandt switched Helmut Schmidt from the Defense Ministry to take over the Economics and Finance portfolios. Schmidt, whose youthful good looks help him to outdraw even Brandt in voter-preference polls, is a leading member of the party's right wing. With elections ahead, Brandt wanted to be certain that West German voters realized that Schiller's abrupt exodus did not mean a leftward swing by the Social Democrats away from the recent middle-of-the-road policies that helped bring them to power.

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