Chancellor Schr�der’s decision to call early elections came in the wake of disastrous election results in North Rhine-Westphalia. Apparently, the electorate gave the Social Democratic Party a kicking because they don’t like the government’s fairly timid attempts to reform the economy (in particular the so-called Hartz IV reforms, which introduced cuts to unemployment and social security benefits.)One has to ask, however, what the German voters who want the welfare state left alone hope to achieve by turfing out Schr�der’s gang? Although the next possible leader of the Federal Republic, Angela Merkel of the Christian Democratic Party (CDU) is no Margaret Thatcher, her party is supposed to be on the right of the SDP. This would seem to put the CDU in a fairly difficult position of demanding a more dynamic German economy while downplaying any steps that might be required to implement such a transformation. So, whoever wins this autumn, they will be unlikely to be granted a radical mandate. Whether this means that the German economy continues to underperform is open to questions. But despite the gurus of the Irish business press reveling in the opportunity to lecture Germany on the need to reform, slow growth in Germany has actually been a godsend to the Irish economy. With a sluggish Germany, interest rates for the Euro zone have been kept low for most of this decade, fueling a construction and consumption boom (bubble?) in Ireland. Of course, it’s very questionable whether it makes sense to have a level of interest rate geared for, say, East Germany applied to West Dublin. But given that the Irish economy would come to screeching halt (and probably end up in a nasty crash) if rates went up at the same pace as they did in Britain, the last thing we need in Ireland is for the Germans to get their house in order quickly.