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Much to their surprise and disbelief, some German business leaders have found common ground with their erstwhile worst enemy: the Green Party, which is emerging as the voice of economic reason in the new center-left Government in a number of areas. This stands in stark contrast to the mood right after the election, when the victorious Social Democrats brought their electoral allies, the Greens, into their Government coalition. This raised grave concerns that once the Greens grabbed a little power, they would push an anti-capitalist agenda. In fact, the Greens and their pragmatic leader, Foreign Minister Joschka Fischer, are quite fiscally conservative, more so in many ways than the Social Democrats and their Finance Minister, Oskar Lafontaine. (A Green politician has characterized Mr. Lafontaine as someone ''who is stuck in a totally outdated concept of demand-side economics.'') The Greens, for example, oppose various large subsidies for industries like coal mining -- a reform crucial to improving the competitiveness of the German economy. Reform of Germany's famously generous pension system is another instance of the Greens' fiscal sense. While the Social Democrats are determined to undo the very limited scaling back in the pension system by the previous Government, the Greens advocate a firm focus on generational equity. They do not believe it is wise to add to the financial burden of today's and tomorrow's work force. For the Greens, ''sustainability'' is more than an environmental concept, and relates to financial, economic and social policy as well. They believe that if the level of consumption is not sustainable -- be it in the form of deficit spending, the overconsumption of state services or environmental degradation -- then policies must change. The Greens are even sympathetic to the idea that corporate taxes must be revamped to make German business more competitive. Their calculation is simple: financially weak companies cannot make the necessary investments in technologies to protect the environment. The Greens' persistence forced German business to deal with pollution and other problems before other countries did. In fact, environmentally sensitive technologies like oil reclamation are one of the few areas where German business can claim a dominance comparable to its strong overall position as little as 15 years ago. Last year, Germany's 18.7 percent share of the world market for environmental technology was larger than that of any other country, including the United States. In some cases, it is business that has given due consideration to the Greens' way of thinking, rather than vice versa. Take a party proposal to triple Germany's already high gasoline taxes. Many corporate and financial leaders were aghast. But then again, one cannot escape noticing that, at the very time the idea was floated, Volkswagen introduced its new ''Lupo'' car that is designed to run on 78 miles per gallon. From a purely economic point of view, by the time that kind of leap forward in efficiency takes a broader hold in the marketplace, even a tripling of gasoline prices would not impose an additional burden on the average driver. As advanced industrialized societies, we need to realize that the auto industry can no longer primarily rely on the ''bigger and more powerful'' mottos of yesteryear. ''More intelligent'' will do, as we look forward to vastly improved fuel economy and the wider use of information technology tools, like navigation systems. The Greens' policy once again presents a useful measuring rod for car makers' advances. It is true that the Greens' single-mindedness in pursuing their goals has proved highly frustrating to business leaders at times. In retrospect, however, these tough battles yielded a considerable amount of mutual respect. Even the Greens' more outlandish ideas sometimes make an odd sort of sense. For example, a while ago a party leader, worried about the waste of jet fuel, advocated that Germans be allowed to fly to their vacation destinations only once every five years. While an example of severe overregulation, the idea makes a point. From the standpoint of global competitiveness, Germans certainly do spend too much time on vacation. As long as Joschka Fischer manages to steer his party in the `right' direction, the Greens' innate anti-establishment thinking -- and their willingness to take on institutions deemed untouchable by others -- provides a refreshing element in German politics. Contrary to all expectations, the Greens have had such a good start in the new Government that it has caused Germany's astute Chancellor, Gerhard Schroder, to change his own political strategy. Rather than letting them increasingly occupy the center ground in German politics, he is cooperating with them to put an effective check on the Social Democrats' left wing, which has so far resisted reforms. In working more closely with the Greens, Mr. Schroder may be readying Germany for the changes it needs.
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