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After 16 years as German chancellor, Helmut Kohl has been voted out of office. Gerhard Schroeder defeated Mr. Kohl in the race for chancellor. Margaret Warner and guests discuss Mr. Schroeder's victory and its global implications.

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A RealAudio version of this segment is available. NEWSHOUR LINKS: May 13, 1998: Remembering the Berlin Airlift 50 years later. April 7, 1998: Newsweek's Berlin bureau chief talks about the new face of Germany. Browse the NewsHour's coverage of Europe. OUTSIDE LINKS: Federal Republic of Germany (In German). The Bundestag, the German parliament The BBC's full coverage of the German election. The embassy of Germany in the United States.

MARGARET WARNER: 81 percent of Germany's registered voters turned out for yesterday's national elections, the country's third since East and West Germany unified in 1990 -- the United Germany, as a country of 82 million people, the largest in Europe and the continent's economic powerhouse, despite a surge in unemployment. Yesterday's election ended the 16 year rule of Chancellor Helmut Kohl, the man who unified Germany after the collapse of the Berlin Wall. He headed a conservative coalition led by the Christian Democratic Union, or CDU. He was defeated by Gerhard Schroeder, the 54-year-old leader of the Social Democratic Party, or SPD. For more, we start with a report from Germany from Bill Neely of Independent Television News.

The left returns to power.

BILL NEELY: After 16 years in the wilderness, after four successive election defeats, the left is finally back in power in Germany. Gerhard Schroeder, basking in the applause of his party this morning, he has done what they failed to do for a decade, win the trust of voters who have traditionally shunned the left and won the trust of German business. Mr. Schroeder sees himself as Germany's Tony Blair and mentioned him half a dozen times today. But Germany's new leader is a little different, celebrating here with his fourth wife, Doris, who's 18 years younger than him. Helmut Kohl took the applause of his party, but his rein as the longest-serving leader of any modern democracy is over. Like his hero, Winston Churchill, the voters thanked him for his historic work and kicked him out. In voting him out, Germans took an historic step.

REINHARDT SCHLINKERT, Political Analyst: You never had a chancellor which was voted out office here in Germany before. And many people say it's a good sign for democracy in Germany.

BILL NEELY: Schroeder's number two is now in talks with the environmentalist Green Party about a coalition government. But he told me Germany is not about to change course dramatically.

RUDOLF SCHARPING, Deputy Leader, Social Democrats: The main difference is within the domestic policy. There will be no difference in the foreign policy.

BILL NEELY: The socialists won by a clear 6 percent, giving Germany only its seventh leader since the war and its first not to have lived through that war. Mr. Schroeder now has to deliver on his election promises. With unemployment high and Germans worried about scrapping their currency for the new euro, Mr. Schroeder is venturing into unknown and unsettled territory.

MARGARET WARNER: We get four perspectives now. Martin Winter is Washington bureau chief for the German newspaper Frankfurter Rundschau. Stephan Richter is president of Transatlantic Futures, a consulting firm. He's also U.S. correspondent for the weekly German newspaper Rheinischer Merkur. Robert Kimmitt served as U.S. Ambassador to Germany in the Bush administration from 1991 to '93; he's now a lawyer in Washington. And Angela Stent is Professor of Political Science at Georgetown University and author of the book Germany and Russia Reborn. Why did Helmut Kohl, the man who unified Germany, get handed his hat? He got 35 percent of the vote.

MARTIN WINTER, Frankfurter Rundschau, Newspaper: I think they voted him down because they were tired of him and because he had no idea how to handle the economic problems - unemployment. This was a major issue for all Germans, and they voted for the Social Democrats because they think the Social Democrats can handle this issue better than the conservatives.

MARGARET WARNER: And what kind of message were the German voters sending, do you think, in embracing Gerhard Schroeder? I mean, are they embracing a leftist agenda in the economic area?

The German people send a message.

STEPHAN RICHTER, Transatlantic Futures: One would think so from an American perspective. In a German perspective the legacy of Helmut Kohl also is that he really social democratized his own party. He's become a victim of his success. It is a misnomer to call the CDU, for the most part, a conservative party. It's like they voted for somebody of the same ilk. It was very easy - just 14 years younger. I mean, Helmut Kohl was almost 70 years old, and his time was up. He had done enough, and onto a new man, not much worry about changing policies so much.

MARGARET WARNER: Where would you place Schroeder sort of philosophically or ideology? I mean, I've seen him described as a former Marxist. He compares himself to Britain's Tony Blair.

MARTIN WINTER: Oh, I think he was never a Marxist, but he is somewhere one inch to the left from the center, I would say.

MARGARET WARNER: Meaning what?

MARTIN WINTER: Meaning that he is in the mainstream of Social Democrats in Germany. And he is a candidate of the Social Democrats.

STEPHAN RICHTER: The difficulty is that he never sought to define what his mandate is all about. Unlike Tony Blair, who turned his party around and then became the leader of his country, unlike Jospin, the French prime minister who had been there for a long time, really the biggest question about the election is, who is Gerhard Schroeder? Nobody knows. Bill Clinton went out to write a book before the elections, and you know, everybody could read what he and Gore stood for. What Gerhard Schroeder did was the only thing he came close to, he wrote 25 letters to 25 people. That's like 25 views. And that's exactly the question that most people are asking, what does this man stand for? He says he's a modernizer. That can mean everything. He definitely is a big pragmatist. He was against every issue on the agenda - monetary union and so on. But afterwards, he comes around to accepting it. That can be a big hope, because Germany had been very much stuck between blocks. And if he is this pragmatist, that would be very good news for Germany.

MARGARET WARNER: All right. Who is Gerhard Schroeder?

Who is Gerhard Schroeder?

ROBERT KIMMITT, Former U.S. Ambassador, Germany: Well, Schroeder is a 54-year-old, currently the minister - president or governor of the state of lower Saxony. He was born in 1944, just a few weeks before his father was killed during the war. He basically has a self-made career -- has really been a domestic politician most of his life. He has run a good size state. He is now moving on to a much larger stage. And I think some of the questions that Stephan raises are the ones that people both in Germany, Europe, and the United States will be looking for answers to.

MARGARET WARNER: Would you agree that he's a pragmatist, or would you put him somewhere on the sort of philosophical spectrum?

ROBERT KIMMITT: Well, I think he is a pragmatist, but he is still on the philosophical spectrum I think left of center. I think his party is left of him and his potential coalition partner, the Greens, are left of his party. So how he manages that disparity to his left, is I think his first challenge.

MARGARET WARNER: What do you think this is going to mean for economic policy? We heard his number 2, Mr. Scharping, saying the big changes will be in domestic policy. What will we see that's different from the Kohl policies?

Tackling Germany's economic problems.

ANGELA STENT, Georgetown University: Well, he has said that he will reduce unemployment. On the other hand, he said he's going to make Germany more competitive; he's going to move it into the 21st century. I think we see in Mr. Schroeder two competing impulses, and one is the "Tony Blair" Gerhard Schroeder, the one who believes in business and the market, and the other one is the Gerhard Schroeder as I remember him when he was the leader of the young socialists, the youth wing of the Social Democrats, who really was quite to the left, and wants to bring back some of the welfare state measures that the Christian Democrats were already mitigating, and wants to appeal more to the trade unions. So I'm not sure what his economic policy will be, because he has promised things to two groups that have different interests - the business class and the trade unions. And I don't know which one will be the real Gerhard Schroeder.

MARGARET WARNER: Do you see these conflicting demands, conflicting impulses in him, and how do you think he's going to resolve them?

MARTIN WINTER: Is he a - I think one of the ideas of Gerhard Schroeder is to have something like a roundtable for employment. It is an old German idea to have the employers and the trade unions at one table with the government and to talk about the problems, so that means tax reform, that means lower the burden on the labor - the labor costs - that means to save Social Security. Like the same problem you have in America, we have with a boomer generation too. So I'm not sure what the outcome will be, but I think his idea is to bring all these people together and to talk about the problem and to find solutions which are on a broad basis. This is his idea of policy.

MARGARET WARNER: Can these two things be reconciled? I mean, as Angela Stent pointed out, on the one hand, he promised lowers to business, and welfare reform, yet, I gather he also went out to workers' groups and said, we're going to raise your pensions and benefits.

STEPHAN RICHTER: Well, the time of the campaign is over. Now, hopefully, the leader, Gerhard Schroeder, step up, because what Martin says, these are tremendous problems. German workers are 80 percent more expensive than any American industrial worker. The Americans are at least as competitive and productive as Germans are. We live in one world market. We can't shut our borders. That's what he has to do - the time of talking is over; it's - will he get it done? And the problem is that the Germans, of course, have said now for 10 years Helmut Kohl was very big into round tables and lovey-dovey, warm and fuzzy, and sometimes business was with him, sometimes unions were with it. But maybe Germany's problem is not that they need to again seek consensus but that they finally - like in any good democracy - have the ability to disagree. And for that, this election result is very positive.

MARGARET WARNER: What do you mean, the ability to disagree? Explain that.

STEPHAN RICHTER: In power politics in a democracy you have hopefully one side that ultimately has the say, and four years later, they get either elected or unelected. And that's been the problem. Under Kohl you had one chamber in the hands of the Social Democrats; the other one under Helmut Kohl. Both parties for 10 years played a primitive blame game that's resulted in Washington gridlock writ large, where the one guy is the more SDP people and the Bundestag said we can't get it done, what we want, because Kohl won't let us. Kohl said we can't get it done because the Social Democrats won't let us. The one thing the German voters in the world economy in the financial markets now knows, Germany has one government that can't escape from responsibility, and that, therefore, has to get it done. And that, I think, is great news, regardless of where you stand - ideologically, philosophically, or politically.

MARGARET WARNER: How important is it for Germany? I mean, every country always think they have economic problems, and the economy is never good enough. But how important really is it for Germany right now to come to grips with some of these problems?

ROBERT KIMMITT: Well, it's absolutely vital -- when Rudolf Scharping talked about continuity in foreign policy, seeming to suggest that was all that was on America's mind, he forgot that his domestic policy is part of his foreign policy today. So Germany's economic well-being is important, not just to Germany, but to Europe, the United States, and to the rest of the world. It's the third largest economy in the world. And, therefore, the solutions that they come up with have to work inside Germany, but they have to work in the broader context also.

MARGARET WARNER: Is there a consensus that part of that will involve trimming the social welfare state that Germany has -

ROBERT KIMMITT: I don't think there is yet a consensus. Clearly, that is an issue on the table, whether the table is round, or otherwise. Taxes have to be on the table, flexibility in the work force have to be on the table, because German companies are voting with their feet right now, starting car plants in the United States, building factories in East and Central Europe, outside German. And Schroeder has to reverse that drain. He has to put his people to work. Therefore, I don't think anything can be off the table.

MARGARET WARNER: Do you think he can make the kind of choice that Mr. Richter was talking about?

Building a coalition.

ANGELA STENT: He's going to have to, I suppose, ultimately, if he wants to be re-elected. I think to some extent it'll depend on whom he goes into a coalition with. If he goes into a coalition with the Green Party, the environmentalists - I would think it would be very difficult because they're going to want to defend, on the one hand, the workers' rights; on the other hand, they're not terribly fond of business. And they don't care that much about competitiveness. They care more about the ecology. They're the party that said that people should maybe only take flights every five years and that gasoline prices should rise three times. They will obviously compromise. But I think he can only do it if he goes into coalition with a party that will agree to his policies and that if he's willing to face his working class and trade union constituents and say you can't go on living in this fool's paradise of this wonderful welfare state we have, because it's too expensive and we can't afford it, and that's going to be hard.

MARGARET WARNER: Much has been made of the fact that Schroeder is the first German leader to have been born, as Bob Kimmitt mentioned, at the end of World War II. He's not part of that World War II generation. What's the significance of that in policy terms in Germany?

MARTIN WINTER: The significance is we have a generation change; it is very important. I mean, we were ruled by Conrad Adanauer, who was very old when he became chancellor - we ruled by the general of the Second World War and the 30's. Now we have a generation of the 60's, like America does and Great Britain does. The second thing I would mention is that now this is the tenth state in the European Union which is ruled by socialists. This is very interesting, and this is a new generation of socialists. These are not the old ideologues. These are new pragmatic people - Jospin - France - or - Tony Blair in Great Britain. So this is an interesting thing and the conservative movement is going down in the whole Europe.

STEPHAN RICHTER: Picking up on what Martin says, I mean, the main message to Washington and particularly Congressional Republicans here, is for them to realize that Bill Clinton by now is by far the most conservative leader in the entire western world, and if America were to change the government, that might lose - I mean, loss of lines of communication -- they wouldn't speak the same language anymore. Global financial markets, all European governments are currently going up against the rampant global portfolio. Capitalism is advocated by Larry Summers, Bob Rubin, and all their ilk. And that's going to be --

MARGARET WARNER: You're talking about curbing some of that?

STEPHAN RICHTER: Capital controls on everything, be soft on Russia, let everybody be, you know, a little more restrictive. On your generation question, there is one point that is quite relevant in this, I think. Helmut Kohl was born and raised in the French Occupation Zone -- Gerhard Schroeder in the British Occupation Zone. That means good things for Tony Blair, because it's, you know - and even the House of Windsor used to be the House of - in a way - lower Saxony. They had a slightly different name, but they came from his area. That may shift a little bit, because I think he's much more comfortable with the British concept and really not in tune with the French, even though he's going over there now to make amends, but there's some significance in that, I think.

MARGARET WARNER: You were trying to get in.

ROBERT KIMMITT: I was just going to say that although Kohl was born in a French occupied area, he was minister - president, or governor of the state of Rhineland Falls, which had then - and still has today - the highest concentration of Americans. So he got to know Americans, as did Rudolf Scharping. And in the case of Schroeder, he knows, if anyone, the British very well. I think he has to reach out both to the French and to us.

MARGARET WARNER: What difference do you think this is going to make, if any, on issues - political and military ones that the U.S. really cares about - a commitment to NATO, perhaps further NATO expansion, the possibility of NATO intervention in Kosovo.

Possible impact on NATO.

ANGELA STENT: Well, today, for instance, Gerhard Schroeder said that if there is to be intervention in Kosovo, it should be definitely under the United Nations' rubric, as NATO. This is a party that finally has committed itself to NATO, that committed itself to at least the first stage of NATO enlargement, but it is also a party that has elements in it that are still more suspicious about American leadership, generational change. Gerhard Schroeder doesn't remember care packages, the Marshall Plan, or any of that. It's inevitable. So I think we could come up to a period of greater tensions between the United States and Germany and other European allies of the United States over a whole range of issues in Europe -- never mind outside of Europe like Iran. I think the commitment to NATO is there but it is not unquestioning, and as things evolve, I think we're going to see a more tense relationship.

STEPHAN RICHTER: It would be very unfortunate if foreign policy became any contested issue, because as we have - I think all agreed - domestic politics and domestic policy making is the key agenda. If they do foreign policy, that's going to be a problem. It means no good for the German repair effort.

MARGARET WARNER: Do you see the possibility of growing tensions, less cooperation between the U.S. and --

ROBERT KIMMITT: There's always tension. The question is it creative or destructive? I hope that it will be creative. I will say that Helmut Kohl had a very emotional attachment to Europe, to France. That was where he grew up. He would take you to his backyard at home and say that he was sure that German and French soldiers were killed right there. I think Schroeder looks at things more objectively. I actually think that's good, for Germany to start asking what is in our interest, because generally what's in Germany's interest I think turns out to be in the U.S. interest. To this point, Germany's been afraid to ask that question. I think asked in the correct, broader, European alliance context, it could be good for them and good for us.

MARGARET WARNER: All right. Well, thank you, Angela Stint, gentlemen, thanks very much.

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