Election results in Germany have significance far beyond that country's borders. A shift away from the conservatives there, according to PNS associate editor Andrew Reding, signals all of Europe will turn toward core social democratic ideas. Reding, born in Switzerland and raised in Belgium, is a dual citizen of the European Union and the United States. He directs the North America Project of the World Policy Institute.

Gerhard Schroder's ascension to the German chancellorship will likely be remembered as a major turning point in global history.

In economic terms Germany will dominate unified Europe, which means the that Germany's new Social Democratic-Green alliance will reverse the Thatcherization of social policy and the Reaganization of economics. It will also contribute to the definitive de-nazification of Germany, and may even help avert another global economic depression.

Just a few years ago, in the wake of the collapse of the Soviet empire, social democrats were on the outs all across Europe. Germans, euphoric over the fall of the Berlin Wall, voted the Social Democrats out of office. Newly-elected conservative governments rushed headlong to follow British Prime Minister Margaret Thatcher's example, dismantling Europe's generous social subsidies.

The conservatives had a point. Overly cozy relationships between socialist governments and labor unions had created economic inefficiencies, as had some of the social subsidies. Yet the right-wing went too far. By coupling cutbacks with policies promoting free trade with countries that have no social subsidies, they managed to erode the social safety net. This drove up unemployment and poverty. Unaccustomed misery, and the fact that most European countries have mandatory voting laws, led to the return of social democratic governments.

Schroder is but the most recent beneficiary of a tide that has swept across Britain, France, Italy, and the Nordic countries. As the head of Europe's economic powerhouse, Schroder is in a strategic position to mobilize sentiment in favor of a new Europe-wide social contract to replace the existing country-by-country arrangements, now endangered by trade with countries that lack advanced social standards.

A preliminary, revised European Social Charter is in the process of being ratified. The Charter, which could have effects beyond the European Union to Russia, Eastern Europe, and the Balkans, would reconstruct the social democratic welfare system at the international level.

It includes rights to free labor unions, collective bargaining, social security, and occupational safety. It provides for free social and medical assistance and seeks the gradual elimination of homelessness. It provides for a minimum of four weeks paid vacation and 14 weeks paid maternity leave. It also enables citizens of any of the countries ratifying the Charter to work in any of the other ratifying countries -- with the same protections.

England, France, and Italy have already signed the revised Charter. Denmark and Sweden have ratified. The Social Democratic victory in Germany makes adoption of the Charter inevitable.

Significantly, the Charter repudiates the neoliberal world order ushered in by Ronald Reagan. It sets limits on economic freedom in the interest of social welfare. While working within market systems, it recognizes that markets on their own have a tendency to move towards social -- and ultimately political and economic -- chaos. One look at the current state of the brazenly laissez-faire markets of Southeast Asia and Latin America reveals the danger.

Alternatively, one can look to the past -- to the chaos that resulted from laissez-faire policies in 1920s Germany and the USA -- for the same lesson. Opening the stable U.S. and European markets to free trade with countries that don't have similar social standards creates a loophole for the return of the dynamics that created the Great Depression, and ushered in fascism and the Second World War.

The solution, as the new social democrats understand, is not isolationism, but international rules requiring respect for human rights, for unions, collective bargaining, minimum social and environmental standards, and democratic checks and balances on corruption.

Another aspect of this more humane vision can be seen in Schroeder's plan to abandon Germany's efforts at ethnic homogeneity. Xenophobia allowed Adolf Hitler to scapegoat the Jews for the economic collapse of the 1930s. His vision of an Aryan state has survived, in a more polite form, in the conservative policy of denying citizenship to the more than 7 million persons of foreign ancestry living in Germany -- a policy Schroder is pledged to reverse.

The charter will also open Germany to immigration by Slavic workers from Eastern Europe. That will de-nazify Germany more effectively than any number of trials of octogenarian former SS officers. So will the unification of Europe, which will now proceed more vigorously with like-minded governments heading all of the continent's major countries.

With the Euro replacing the Mark, and more power shifting from Berlin to Brussels and Strasbourg, a silver stake will be driven through Hitler's ghost.