This is interesting. With the German economy falling deeper and deeper into the mire, Schroeder seems to be swinging further to the left. There was a bout of business-bashing last week, and now there’s this piece of news via The Daily Telegraph:

“Germany is backing a 1970s-style Keynesian to take over the crucial job of chief economist at the European Central Bank, marking a dramatic shift in Berlin’s economic thinking and horrifying the guardians of orthodoxy in Frankfurt. The post has been held for the last eight years by Dr Otmar Issing, a monetary hawk who has fought off political pressure for lower interest rates and sought to uphold the low-inflation traditions of the former Bundesbank. Chancellor Gerhard Schroeder now hopes to replace him early next year with Professor Peter Bofinger, the leading advocate of a ”New Deal” spending blitz to cut unemployment and lift the country out of protracted slump.The government slashed its growth forecast for 2005 yesterday from 1.6pc to 1pc after a week of grim confidence figures from German industry. Morgan Stanley has warned that the country may already be in recession.”

If you’re in a hole…