Günter Guillaume

Since 1974 economic conditionsin the Federal Republic are in decline. The massive increase in energy prices has resulted in a high inflation rate of 15 percent. "Wild-cat" strikes in the metal industry and a "slow-down" strike of airline pilots shake popular confidence in the social-liberal government.

Citizens are forced to accept substantial reductions in real income. In wage negotiations, the trade unions attempt to recoup these losses through higher wage demands. The "ÖTV" Union demands two-digit wage and salary increases from public employers - who for the most part are faced by exhausted budgets. The Union prevails. The government's surrender in the wage negotiations weakens its reputation. The loss in authority falls in the first place upon Federal Chancellor Willy Brandt.

These developments cannot fail to have an impact on the work atmosphere within the Brandt/Scheel cabinet. Willy Brandt complains in a letter to Egon Bahr about the lack of maturity and the excitability within the cabinet as well as the failure of leading SPD politicians to place issues of substance above personality. Brandt is accused from various sides of weak leadership.

In May 1974 Wily Brandt's personal assistant, Günter Guillaume, is exposed as a DDRspy and is arrested. Willy Brandt - tired and depressed - expresses the consequences of his factual problems: "Consequences of carelessness in the matter of the espionage case of Guillaume". On May 6 he resigns as Federal Chancellor.

 
The Spy behind the Chancellor
 
Many citizens are alarmed about Brandt's resignation. There are spontaneous demonstrations of sympathy for him in several locations. His successor in the office of Federal Chancellor is the Finance Minister of the social-liberal coalition, Helmut Schmidt. Willy Brandt remains Chairman of the SPD.