An ailing German economy contributed to a loss of power by Gerhard Schroeder and his Social Democratic Party (SPD). German’s elected a more centrist government (some call it “conservative”), the majority of votes going to the Christian Democrats and Christian Social Union. They have started to implement some long-overdue, albeit half-hearted, fiscal belt-tightening:

Germany’s Chancellor-designate Angela Merkel has called on Germans to make sacrifices to help reverse the economy’s “downward trend”. …

Among the measures are a 3% rise in VAT, higher income tax for top earners, and no protection from dismissal for the first two years in employment.

Pensions are being frozen, subsidies for first-time home owners are being scrapped and for the first time since the war, the budget deficit will not adhere to Germany’s constitutional rules.

I’m not sure the tax increases will help, but reigning in entitlements is a good start. Big government was fun while it lasted. Then the hangover set in: slow growth and high unemployment. It is about time for change.