Germany's National Holiday in Jeopardy

Finance Minister Hans Eichel is scheduled Thursday to present his tax revenue projections and unveil a budget plan which will include the abolition of the "Day of German Unity," a public holiday introduced in 1990 to mark the reunification of East and West Germany.

In future, the anniversary will be celebrated on the first Sunday in October rather than October 3. The government elected to dispense with this particular holiday on the grounds the move would be less controversial than abolishing a religious holiday.

Lifting economic growth

Germans get up to 13 public holidays a year, depending on which state they live in, plus an average of 30 days paid vacation.

Several ministers in Schröder's cabinet want the number of public holidays to be reduced. Economics Minister Wolfgang Clement has noted that for this year, at least 0.25 percent of German GDP growth is due to the fact that numerous holidays fall on either Saturday or Sunday, meaning Germans will work a larger than normal number of days in 2004.

The proposal will now be put to the Bundestag, which will then decide whether shifting the public holiday from a working day to a Sunday is a viable means of increasing productivity and therefore tax revenue. Abolishing the public holiday will lift economic growth by 0.1 percent.

Plans to plug deficit

Revenue experts from Germany's local, regional and national authorities meeting in Bremen over the past few days have calculated that the country faces tax revenue shortfalls of €5 billion ($6.4 billion) for both the current year and 2005.

The news is bad for Chancellor Gerhard Schröder's government, which still hopes to prevent Germany from violating the EU's Growth and Stability Pact for the fourth year in a row. The German deficit ratio exceeded the limit of 3.0 percent of GDP in both 2002 and 2003, and it is set to do so again this year.

According to recent media reports, Berlin is also considering tapping Deutsche Telekom and Deutsche Post for billions of euros to help rein in its budget deficit. Under a deal yet to be approved, the state would pocket windfall gains from the partially privatized companies in exchange for assuming part of their pension liabilities.

"One less public holiday is one way of kick-starting significant growth," said Fritz Kuhn of the Green party, the junior partner in Germany's ruling coalition.

A question of patriotism?

Free Democratic party leader Guido Westerwelle was less receptive to the idea. "If we stop celebrating German unity we will soon forget German's division," he argued. "Healthy patriotism is not out of date, it has contemporary relevance."

Laurenz Meyer, secretary general of the opposition Christian Democrats (CDU) suggested the proposal showed the government was "desperate," while Markus Söder, Meyer's colleague in the Christian Democrats' sister party, the CSU, observed that the coalition government "lacked sensitivity."