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Munich Spurns Steve Ballmer's Software Rebates

Kurt Pfeifle writes "Steve Ballmer's recent trip to Munich to offer up to 90% rebates for the Microsoft Software Assurance and Licenses was in vain. The ruling party of Germans biggest city and self-proclaimed 'technology capital' now decided to migrate 14.000 workstations to Linux and an OSS office suite. A study comparing the alternatives had assigned 6218 (out of 10.000) points to Linux/OSS, while the MS Windows platform only scored 5293. Babelfish translation of the latest newsticker story."

49 of 736 comments (clear)

  1. Good job. by grub · · Score: 5, Insightful


    When any manufacturer offers incredibly deep discounts like this, it's only so they can get their hooks into you. "Give them the razors, sell them the blades."

    --
    Trolling is a art,
    1. Re:Good job. by GameMaster · · Score: 5, Interesting

      Actually, the other possibility is that they are looking at the over-all PR picture and figure that the loss in profits is worth not getting the bad PR of having a whole nation convert over to OSS. In which case it could be looked at as a great deal from the Munich government's prospective because they could always make the switch to Linux later if MS starts trying to tie them down.

      I think it shows even more strongly the wisdom of the Munich government in their decision to take government software out of the hands of a proprietary company.

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    2. Re:Good job. by Jason+Earl · · Score: 5, Insightful

      Microsoft isn't worried about PR. They are worried about the thousands of German businesses that are going to be drawn inexorably towards Free Software. Lots of companies have to deal with the Munich city government, and the default formats for dealing with this organization just switched from MS Office to OpenOffice.org.

      The trickiest part about using Free Software is dealing with proprietary document formats. Read a review of any Office Suite for Linux and the first thing that the reviewer writes about is the ability to share documents with users of MS Office. When OpenOffice gets a negative review it is almost never because the tools are not sufficiently capable, but rather it is because the MS Office conversion filters aren't up to the task. Companies in Munich now can deal with their city government without resorting to these proprietary MS Office formats. In fact, the bureacrats are probably going to mandate the use of OpenOffice.org formats. They might not even do it on purpose, but you can bet that when the government employees have problems opening up a document that they will point the person towards the OpenOffice.org website. It probably won't be too long before a significant part of the Munich business community uses OpenOffice.org formats as their new lingua franca.

      What's worse, there is a good chance that many other German cities will follow suit. Microsoft could very easily find that one of the largest economies in the world is no longer interested in MS Office.

    3. Re:Good job. by saden1 · · Score: 5, Insightful

      Microsoft is in a real catch-22. I mean what is stopping governments/companies from getting those deep discounts by threatening to switch to Linux? If they don't give discounts they may well lose contracts and the pool of people using open source software grows. If they do they aren't going to make as much money and they'll surely have to dip into that 45 billion dollars they are sitting on.

      M$ has been ripping people of for year. Now they'll be the ones getting extorted. Like the old saying goes whatever goes around comes around.

      --

      -----
      One is born into aristocracy, but mediocrity can only be achieved through hard work.
    4. Re:Good job. by twalk · · Score: 5, Insightful

      What really puts them into a spot is their investors. They still think that MS is a growth stock. If they cut prices to compete with linux, they have a bunch of really pissed off investors, because their revenue won't be increasing as expected. If they raise prices to increase revenue to please the investors, then linux wins in the long run.

    5. Re:Good job. by zakezuke · · Score: 4, Interesting

      They "could" actually release "microsoft office" for linux. That would be an idea!

      Seriously... while it is a comercial product, it is one that is actually *used* by a great many people. What better way from profiting from the free software movement then actually releasing comercial products for it. Rather then offering a discount of 90%... offer them a product they will buy.

      Assuming the price is the same... city saves money on operating system, but doesn't have to spend money on migrating documents.

      --
      There is no sanctuary. There is no sanctuary. SHUT UP! There is no shut up. There is no shut up.
    6. Re:Good job. by A+Naughty+Moose · · Score: 5, Insightful

      Microsoft only has to offer these deep discounts to those companies that are serious. I mean do you think that a Fortune 500 company is going to say to Microsoft: "No thanks, we're going to switch all all desktop to Linux and OpenOffice", without actually devoting resources to looking into the feasability of such a project? The only way to get MS to give you discounts is to actually mean it. Go into a meeting with Steve, and say: We've done the research, OSS will cost us X to switch, and Y to support each year. After Z years, the OSS solution pays for itself, and after that, we're running a profit in the IT division. Now we really don't want to switch, the short term headaches will be a bitch, what deals are you going to make for us Mr. Ballmar? What if the company didn't do this research or actaully make a comitment to change if the response is: "Screw you, You'll take what we give and like it."? What is the company going to do? The point? You can't use OSS as leverage unless you actually plan on going through with it. Kudos for the German goverment for playing the hard ball game, but this only becomes meaningful once this is in operation.

    7. Re:Good job. by saden1 · · Score: 5, Interesting

      I agree with you about having to mean it but I am confident that M$ would immediately jump and offer discounts if they ever heard company X say we'll do feasibility and cost study on Linux. M$ would offer discounts just not to have the study done. Now companies/governments have some leverage where as before they'd always tell you "Screw you, You'll take what we give and like it." Take the changes they made to their license policy a year or so ago. They made a killing at the expense of their customers/users. I don't think they can low ball people like that anymore. No wonder why they are supporting SCO.

      --

      -----
      One is born into aristocracy, but mediocrity can only be achieved through hard work.
    8. Re:Good job. by mav[LAG] · · Score: 5, Interesting

      They "could" actually release "microsoft office" for linux. That would be an idea!

      No it won't and for a simple reason: more than anything else, Bill Gates likes to win. The money is incidental. Yes I am being entirely serious. Go and read Accidental Empires by Robert X Cringlely or Big Blues by Paul Carroll or any other detailed treatise of the early (and subsequent) days of the PC. The overriding impression of Gates is that he wants to win. It's a philosophy that permates the organisation from the top down. Why do you think Microsoft Account directors are being given millions in discounts and orders to "under NO circumstances lose to Linux"? Surely that money would be better spent in the medium term in other ways? But seen in the context of "winning the business at all costs" it makes perfect sense.
      Here's the telling quote and you can be really really sure that Gates has read it and knows it:
      "If Microsoft ever does applications for Linux it means I've won" - Linus Torvalds. Source here
      This is a lovely quote from Linus and I'm sure he knew exactly what he was saying by putting it in terms of the "win-lose" mentality of Microsoft.
      Office for Linux would be a huge loss of face. Can you imagine the /. headline (and the next one a day later :): Linus prophecy fulfilled as Gates loses face over Linux Office.
      The IT press would be all over it.

      --
      --- Hot Shot City is particularly good.
    9. Re:Good job. by Jason+Earl · · Score: 4, Interesting

      The difference is that OpenOffice.org is Free Software. You can download the program from the Internet. The city of Munich could even make money selling install CDs.

    10. Re:Good job. by Malcontent · · Score: 4, Interesting

      You don't have to go those lengths. Here is what you do. I mean this, this actually works.

      Install a PC in the office of the CIO that's running linux or freebsd. Set a screen that shows a penguin or something like that. Install openoffice, set up a handful of programs like mozilla, a jabber client, and make their icons prominent on the destop.

      Also install two or three linux servers in the server room. They don't have to be doing anything but it would be great idea to lable them "postgres server" and "Mail Server".

      When the time comes to negotiate the new contract the sales rep will notice the servers (they are trained to look for them) and ask about it. At this point the CIO (and not anybody else) says "We are doing some preliminary analysis about the suitablity of a linux desktop and some servers". when the sales drone asks how it's going just say "it's too early to tell but so far it looks pretty good, Hey let's go to the server room and let me show you that new exchange server we installed".

      Bingo!. After touring the server room your company will be offered a substantial discount on your software licenses. The bigger you are the bigger the discount.

      Paying retail for MS licenses is like paying the sticker price for a car. Only the most stupid idiot CIO will do such a moronic thing.

      --

      War is necrophilia.

  2. Munich isn't Germany's biggest city ... by moonbender · · Score: 4, Informative

    ... Berlin is. Berlin has got a population of approximately 4 million, compared to Munich's approximate 1.5.

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    1. Re:Munich isn't Germany's biggest city ... by dipipanone · · Score: 4, Funny

      I believe, however, that Munich is the capital...

      Let me guess, you must be an American, right?

  3. Math by Nexum · · Score: 4, Interesting

    Anyone want to do the math on this one?

    If we assume Linux never existed, and therefore the 90% cut price offer never made, making Munich pay full whack for 14,000 copies of Windows, how much would this cost (on this scale - obviously i doubt they would pay the full ~$300 permachine?)

    Or put more directly... how much has this shaved off the MS bottom line for this financial quarter? If anyone knows what the purchase rate for both WINDOWS and OFFICE on this scale... please... let us know the math!

    -Nex

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    This sig has been deprecated.
    1. Re:Math by Teckla · · Score: 4, Funny

      I think it's one human soul per Windows/Office seat, as well as your first born.

      -Teckla

  4. List of Switchers? by vivIsel · · Score: 5, Interesting

    Is there anyone out there who mantains a list of countries, cities, companies, &c who have made the move to Linux? If not...well, it would be useful for making Open Source pitches to prospective switch-ers in government, business, and the like. To be sure, Munich isn't alone, but how much company does the city have? I imagine something like one of those push-pin maps, sorted by distro, perhaps, and by the size of the switch (citywide, countrywide, corporate). Would be neat. Does it exist?

    1. Re:List of Switchers? by rkz · · Score: 5, Funny

      We could use mappoint!! Lets start it ASAP
      More info

  5. preliminary decision by tholti · · Score: 5, Insightful

    Note that it is still a preliminary decision. But as you can read from the article if it comes to the final decision there probably will be 43 (SPD and Gruene party) to 33 (CDU and FDP) votes for Linux. :-)

  6. Security issue ? by Krapangor · · Score: 5, Funny

    With OSS they can see the source and verify that it's frre of any backdoor. So they can protect their precious secrets about the Oktoberfest and what Bavarian beer is really made of.

    --
    Owner of a Mensa membership card.
    1. Re:Security issue ? by gmhowell · · Score: 5, Informative

      what Bavarian beer is really made of

      The same thing as all German beer: barley, hops, water, yeast.

      The actual law.

      --
      Jesus was all right but his disciples were thick and ordinary. -John Lennon
  7. Better translation by akruppa · · Score: 5, Informative

    I had the same story submitted, along with a cleaned up translation, but it was rejected.

    Anyways, here's the corrected translation, hope it helps.

    Alex

    Munich City Hall's SPD decides in favour of Linux

    In today's meeting, the SPD faction of the Munich City Hall spoke out in
    favour of using Linux on the PCs of the city's administration. Thus a
    preliminary decision has been made, spokesman Jürgen Bühl said. The Munich
    city administration migrates from Windows NT to Linux as the client
    operation system and to an office suite from the Open Source domain.

    The transition to Linux guarantees greater independence of suppliers and
    greater "flexibility in the design of the future IT landscape of the city
    administration". Additionally considerably lower cost are created.
    Considering the tense budget situation in the states [Bavaria] capital, this
    is an aspect that "supplements the strategic-qualitative advantages," says
    the note from Munich.

    Town councillor Christine Strobl, deputy leaders of the parliamentary group
    and SPD spokeswoman in the personal and administrative committee, states:
    "At the same time we provide for the further shaping of the technology
    location Munich. For development and support the city will purchase
    services. Thus we promote high-quality jobs in the region. In this context,
    the Technical University of Munich's support during the migration underlines
    the outstanding position of the science location Munich."

    The migration of the 14,000 PC systems and Notebooks with over 16.000 users
    is to take place "gently". In particular departments with extensive
    specialized applications are to be able to plan on a long-term basis. The
    final decision will be made by the city council in the plenary assembly on
    May, 28th. For over one year SPD has held 35 of the 80 seats , the CSU 30,
    the Greens 8 and the FDP 3. The other parties account for the remaining four
    seats.

    "We are fully conscious that our decision has a signal effect", says Strobl.
    "That's why we have investigated the matter intensively." The consulting
    firm Unilog initially rated the impoved offer from Microsoft as advantagous.
    But open questions had remained and finally a new offer of IBM was present.

    The new total evaluation of capital value and qualitative-strategic criteria
    led to a draw between both solutions, continues the town councillor. As the
    combination of Linux and an Open Source office suite
    "qualitative-strategically clearly comes out in front, the SPD parliamentary
    group decided for this option as the long-term direction".

    --
    Heisenberg may have been here
  8. Heard at M$-HQ by netcongestion · · Score: 5, Funny


    "How many shares shall I sell today?"

    1. Re:Heard at M$-HQ by rseuhs · · Score: 4, Insightful
      It's funny.

      First Ballmer interrupts his skiing trip to talk to Munich officials.

      Then a Microsoft memo gets leaked in which it is stated that "no matter what, don't lose against Linux"

      Then Ballmer offers a 90% discount

      Then Ballmer sells 10% of his MSFT-stock.

      And finally Munich uses Linux anyway.

  9. Re:to the editors of slashdot by Neil+Watson · · Score: 4, Insightful

    This is not an article about just Miscrosoft. It is an article that offers me a faint glimmer of hope that maybe, just maybe, greedy mega-corps do not control the entire world.

  10. Now THAT'S a monopoly! by crivens · · Score: 4, Insightful

    90% discount?! Now THAT'S a monopoly! I don't see Steve Balmer rushing to offer me a 90% discount on any MS products. Then again I'm not a city so no wonder!

    1. Re:Now THAT'S a monopoly! by bstadil · · Score: 5, Insightful
      90% discount?!

      I am surprised that this was offered. Microsoft is not out of the legal woods in Europe and a discount of this magnitude can almost only be construed as an attempt to leverage a monopoly situation. There can be no other rational business reason for this discount.

      On an aside this is a huge blow for MS. The knowledge of the offered discount is probably worse than not getting the biz.

      --
      Help fight continental drift.
    2. Re:Now THAT'S a monopoly! by Anonvmous+Coward · · Score: 4, Funny

      "Then again I'm not a city so no wonder!"

      Must... resist.... yo mama... joke....

    3. Re:Now THAT'S a monopoly! by rseuhs · · Score: 5, Insightful
      I am surprised that this was offered. Microsoft is not out of the legal woods in Europe and a discount of this magnitude can almost only be construed as an attempt to leverage a monopoly situation. There can be no other rational business reason for this discount.

      The reason was that under no circumstances Microsoft wants any publicly visible large migration to happen. They would have paid Munich to run Windows if it wouldn't look too stupid!

      Hell, they DID pay a lot for the Bundestag to stay on Windows at least on clients. They invested over 5 million $ for a PR-campaign, which translates to 1000$ for each of the Bundestag's computers.

      Money is not the issue here.

      The issue is a big organization showing the world that Linux is viable on the client.

      The issue is that now a lot of applications are going to get ported to Linux and Linux will be an even better deal for other cities.

      The issue is that now millions of people are going to communicate with OpenOffice file formats with their government.

  11. A good day for German Linux users... by Anonymous Coward · · Score: 4, Interesting

    First LinuxTag issues SCO with a cease or desist order, and now this. Godspeed you! Germans.

  12. Developers by birdman666 · · Score: 4, Funny

    I wonder if Mr. Ballmer learned how to say Developer in German before he went.

    --

    Nothing from nowhere I'm no one at all
  13. Deutchland... by Anonymous Coward · · Score: 4, Funny

    Deutchland Ousts Windows Alles

    Deutchland, Deutchland,
    Ousts Windows
    In comes Linux
    Good and free!

    Hear the howling
    And the gnashing
    From afar
    Redmond across the sea!

    Deutchland, Deutchland,
    Wise technologists
    And politicians
    who've listened to thee!!

  14. With an 84% profit on each copy sold... by Realistic_Dragon · · Score: 4, Insightful

    This is selling it below cost, which is dumping, which is illegal. The EU competition commission should take note of this (along with other infractions 1 through 97bn) and throw the book at them.

    If it's a lead plated copy of War and Peace, hurled at 1,000 m/sec, all the better.

    --
    Beep beep.
  15. I just wanted to submit that story... by rseuhs · · Score: 5, Informative
    Now that I have picked out all that links, I may as well post it:

    Munich will be the first city with over 1 Million inhabitants that is run by Linux

    Heise has the story (Babelfish may help you)

    Short facts are: The actual vote will occur on wednesday, but the SPD and Green party hold 43 out of 80 seats and have both committed to vote in favour of Linux to be used in the government of Munich, a city of about 2 million inhabitants.

    The main reason for the migration was "strategic-quality reasons" and to support competition in software, not cost, which was said to be about the same for Linux and Windows.

    About 14000 client computers are involved.

    The used distribution will be SuSE, but IBM is also involved. OpenOffice will be used as office suite.

    The earlier happenings are also quite exciting:

    • Study suggests that Linux is cheaper than Windows for Munich: - story, Babelfish
    • Microsoft CEO Ballmer interrupts his skiing trip to talk to Munich politians: story, Babelfish
    • Suddently a new study says that because Microsoft gave huge discounts, Windows is now better than Linux for Munich: story, Yoda
    • IBM also modifies their offer (see main story above)

  16. Re:A sign of things to come? by Anonymous Coward · · Score: 5, Insightful

    Anti-Americanism is *everywhere*. I'm posting from your number one ally, the UK, and people here grimace when you mention the US.

  17. Re:A sign of things to come? by rseuhs · · Score: 4, Insightful
    Sure is. After all, most cities are quite similar - when all applications the Munich government uses have been ported to Linux, migrations of other German and European cities will become a lot easier and faster.

    Also, millions of people will communicate with their government using OpenOffice formats, which essentially means that OpenOffice will become the "must have" office suite while MS Office will be the redundant "why should I use that when I already have.." Office suite in these regions.

    This of course will make it easier for companies to migrate to OpenOffice and possibly Linux themselves.

    Ballmer interrupted his skiing trip for a reason. He knows how important such a migration is and that just one large-scale migration is needed to start the landslide.

  18. Now you know why Ballmer was selling shares by DailyGrind · · Score: 5, Funny

    Went to Germany got owned came back and started selling his MS shares....

    --
    You will have to pry my proprietary software $$$ from my cold dead hands!
  19. Re:A sign of things to come? by Angry+White+Guy · · Score: 5, Insightful

    I think that, rather than anti-americanism, it is a pro-germany stance. How many OS companies are in Germany? How many MS programming jobs are in Germany? How much economic runoff is there going to be in Germany in both scenarios?

    If the Germans go with Suse, they have programmers in the country, administrators in the company, technical support in the country. Conversely, should Germany go with Microsoft, they only have administrators.

    It just makes sense to go with Suse in this case. The technical barriers can be overcome, and interoperability only comes into play based on install base. You replace the whole load, compatibility problems go the way of the Moose.

    --
    You think that I'm crazy, you should see this guy!
  20. Re:A sign of things to come? by Anonymous Coward · · Score: 5, Insightful

    You're not right. Various parts of the German government, especially the federal government, are considering Linux since quite a while. Munich's recent decision is just another step.

    The major argument have probably been the high costs of MS systems, which in this case have also been accompanied by a general matching of the open source ideals with the ideals of the current government of Munich (liberal and social).

    Oh, and by the way: The decision clearly wasn't driven by anti-Americanism. You can see that because IBM got the assignment, which is, as you know, also an American company.

    And just about your opinion that Anti-Americanism was quite big in Germany now: According to a recent poll 70% of all Germans still consider Americans to be their friends (the number didn't change due to the latest events). The Germans just have a different opinion about world policy, that's all.

    Kind regards,
    Chris

  21. Oh, so you're getting free crack cocaine? by Anonymous Coward · · Score: 5, Funny

    Comment from one sysadmin when MS offered us free software...

  22. Heh! by FyRE666 · · Score: 4, Interesting

    Well, anything that stops Balmer dancing about like a happy, sweaty monkey sounds good to me. I'm only surprised Windows scored so highly!

    As an aside, we use Star Office at work on about half the Windows machines, but the people using it do seem to be envious of the staff with MS Office installed. Problems with printing multi-page spreadsheets/images, problems opening files etc, and lack of speed seem the biggest problems.

    Although, since the sales/service people are still mostly using PIIs with 64-128MB of RAM, it's little wonder. I recently built OpenOffice on my Gentoo box to see how it compared, and it does seem a lot faster, even though my Gentoo machine has a slower CPU (Athlon 1.4ghz) than my office machine (2.4ghz P4 - although the office machine has a shit SiS onboard graphic chipset).

    I doubt the management would like all the PCs building OO from source for 3 days though ;-)

  23. It pains me to say it but... by hillct · · Score: 4, Interesting

    Microsoft has actually learned a lot over the past decade; particularly in the area or recurring revenue streams.

    At this point a significant portion of the company revenues are derived from subscription services. Even if they waive all future upgrade license fees, they still have support contracts, MSDN and other subscriptions to services many large organizations will rerquire. It'll be vary interestingto see what Balmer is willing to offer to get this contract/deployment. There has got to be a point below which they will refuse to go. 'Under no circumstances, loose to linux' must have a limit. I just wonder where it actually is.

    --CTH

    --

    --Got Lists? | Top 95 Star Wars Line
    1. Re:It pains me to say it but... by greg_barton · · Score: 4, Insightful

      Even if they waive all future upgrade license fees, they still have support contracts, MSDN and other subscriptions to services many large organizations will rerquire.

      Golly. Sounds familiar. Isn't this the...*wait for it*...open source business model?

  24. Wow. The figures speak for themselves by gazbo · · Score: 5, Informative
    6218 (out of 10.000) points to Linux/OSS, while the MS Windows platform only scored 5293

    Under the Munich government's scoring system, one would generally expect scores around 6000, based on the extremely popular Novell system they had running for many years before they decided to "upgrade" to Windows after being given the hard-sell by MS. To score 6218 shows that Linux is well ahead of the curve; I believe that when they looked at a Solaris installation a couple of years ago, that managed slightly lower at about 6100 (I forget the exact number, but it was somewhere around that).

    The most interesting figure is Windows at 5293. AFAIK, that is the lowest score they've ever given out. Certainly the lowest one I've seen that they published.

    Go Linux!

  25. Re:A sign of things to come? by rseuhs · · Score: 4, Insightful
    In all other areas windows is usually better.

    Sorry, but the only area where I found Windows to be better than KDE/Linux is gaming. And that's only because there are too few games, not because of any technical limitations.

    Also, the roots of this decision lie long before the Iraq war.

  26. Just for that... by Anonymous Coward · · Score: 5, Funny

    ...Microsoft is removing Munich from its next version of Flight Simulator.

  27. 90% number not backed up by article by nniillss · · Score: 5, Informative

    In the Heise article, the rebate offered by Ballmer is not specified. In fact, the details of the offer seem to be secret. The 90% number seems to originate from earlier discussions (not linked to Munich) about an internal Microsoft order not to lose to Linux at any cost.

  28. Could this also be a result of the Iraq war? by Martin+Marvinski · · Score: 5, Insightful

    Before the war, there was an article on how the US was spying on countries to see how they would vote on the war resolution in the UN.

    http://www.observer.co.uk/iraq/story/0,12239,905 936,00.html

    Because of this Germany may also be moving away from software that may have potential secret backdoors written in for the NSA. No matter how much you get in rebates, it will never give a government the peace of mind of having compiled and inspected the code yourself.

  29. Call me picky, but 6/10 is a good score? by Gldm · · Score: 4, Insightful

    When the winning software basicly scores 6/10 and beats out a competitor scoring 5/10, what does this say about the suitability of current software for what users want to use it for?

    Yes I know it's fun to watch linux vs windows and cheer from the sidelines etc, but how about this bigger picture?

    Maybe it's just me but software seems to be doing less and less of what we as users want and more and more of what marketing departments want. Useless features, obsolete features that are never pruned, tons of time and money spent dealing with ways to push advertising or find more ways to milk the consumer... Whatever happened to looking for ways to make doing everyday tasks easier and faster? Open source projects don't seem to be entirely immune to it either. I see lots of development in trying to keep feature parity or adding new things to invent new buzzwords for, but I haven't seen anything moving towards ease of using for some time now. All apps are now using "skinable" interfaces that make using them inconsistent with each other. Some apps have such complex configurations they're harder to learn to use than the average OS. I think that's a problem.

    So what were the almost 4000 points that weren't awarded based on?

    --

    Introducing the new Occam Fusion! Now with sqrt(-1) fewer blades!

  30. Their other alternative? by blair1q · · Score: 4, Funny

    "Attacking France and making them do all the typing," garnered 7012 points, until someone pointed out the German constitution forbids it.