Germany's Electoral Campaign: Many Choices But No Real Choice?
By Christoph Nesshöver

A brief analysis of the CDU's and the SPD's platforms for the September elections.

2005 will be a busy summer in German politics. By trying to force early elections, Chancellor Gerhard Schröder has unilaterally cancelled all major vacation plans of his fellow politicians, be they members of his ruling coalition of Social Democrats (SPD) and Greens or of the opposition parties CDU, CSU, and FDP. Everyone had to shift hastily into campaign mode a year earlier than planned.

That may not be of help for Europe's tourism industry. But it has created a boom for a sector that usually lies dormant for most of a four-year mandate in German politics: the "production" of electoral platforms designed to lure voters into voting for the desired party at the polls in mid-September. The CDU's press was the last to present its political vehicle this past Monday, so it's time to compare two key issues: economic and foreign policy.

The SPD has decided to move considerably to the left. Its platform proposes a roll-back for some of the structural reforms that Chancellor Schröder has pushed through since early 2003 (especially concerning the labor market and social benefits), it calls for higher taxes for the rich, and it promises to dole out new goodies to families without, however, explaining how to pay for them. Currently, Germany's federal budget runs a deficit of about 50 billion euros per year. Forced to action by his party base, the Chancellor has put on a happy face claiming that his party's program only continues his "agenda 2010" reforms.

Nothing could be further from the truth. Even if some of this may quickly be forgotten after an election victory, it shows how weak Schröder has become and how many in his party strive to return to the good old days of social-democratic heaven with general state protection for all from most risks of life, paid for by steady growth and low unemployment. These days have been gone for good since the 1970s, and desperately trying to retrieve them may deal the final blow against the German economy's competitiveness.

Polls do not give Schröder and his SPD much of a chance to put their platform's vows into practice. The party has been trailing the conservatives by more than 15 percentage points for months.

Angela Merkel, the leader of the CDU and Mr. Schröder's direct opponent for the Chancellorship, has opted for more truth in her party's platform. She claims that she does not throw sand into voters' eyes and is courageous enough to announce higher taxes as of 2006 - a raise in VAT from 16 to 18 percent. The critical state of the federal budget leaves her no choice, Ms. Merkel says. Voters will be compensated, though, by somewhat lower income taxes and, more importantly, by a reduction of the contribution to the federal unemployment insurance from 6.5 to 4.5 percent of wages, thus lowering unit labor costs. Tax breaks for homeowners and night shifts will be eliminated. Ms. Merkel also wants to make it easier for companies to lay off workers.

These are the most concrete points she raises; when it comes to the desperately needed reforms of the health care and the pensions system, the CDU remains vague. Ms. Merkel has apparently decided to speak her truth on a few landmark issues but to duck away from most of the real hot-button, complicated stuff. Schröder's early election move caught her and the CDU off-guard since the party had planned to detail its own reform agenda only by the end of the year. The numerous differences inside the CDU and between the CDU and its Bavarian sister party CSU could not be resolved in just a few weeks, not even with an election looming.

It would be wrong to assume that Ms. Merkel is a devoted market-liberal. Although she was born and grew up under communist rule in East-Germany and has frequently stressed how much freedom from state intervention means to her, the base of her party still is strongly attached to the consensual system of governance with an administration working closely together with parties, business, and labor leaders.

One example to illustrate how deep the "social" roots run even inside the CDU is the case of automaker Volkswagen. Currently stuck in the political-managerial swamp of a corruption scandal, the prime minister of the Federal State of Lower Saxony, Christian Wulff, refuses to sell off the 13 percent stake (including a "golden share") his state still holds in VW. Mr. Wulff is one of Ms. Merkel's lieutenants and can expect to play an important role under a Merkel government - either in Berlin or as one of the dominant regional leaders that a Chancellor needs to rely on in Germany's complicated federal system of governance. This CDU will not bring about a freedom revolution to Germany's economy and society; Ms. Merkel will not "Americanize" Germany, and neither will Chancellor Schröder.

Ms. Merkel and Mr. Schröder present many choices to voters, but there does not seem to be a real choice over the way to go, the direction in which they wish to lead Germany: this campaign lacks the "vision thing."

Now, since economic policy does not seem to be all that different according to the two platforms, what about foreign policy? Are we to expect a new diplomatic honeymoon between Mr. Bush and Ms. Merkel? That seems rather unlikely.

The Bush administration will be more than happy to see Mr. Schröder's back when he rides into the September sunset. After their clash over Iraq, this U.S. President and this Chancellor would never be best friends again anyway. The current (albeit practically "silent") clash over expanding the UN Security Council only stresses this point.

But Washington should not overestimate a Merkel government either. In its election platform, the CDU vows to return to Germany's traditional transatlantic orientation in foreign policy, seeking close ties with a U.S. administration. However, in at least two central points, Ms. Merkel already begs to differ from Mr. Bush: She's steadfastly against admitting Turkey into the European Union, a project Washington has strongly advocated for years. The EU's current crisis over its constitutional treaty only strengthens her position. Many in Brussels already gossip about the fact that the only thing the EU does not know about Turkey at present is how to tell the Turks that EU membership will, after all, not happen any time soon. Ms. Merkel will be delighted to hear that.

Also, a Chancellor Merkel will not help out Mr. Bush in Iraq either. Mr. Schröder's strong position against Mr. Bush's Iraq policy was a reaction to an overwhelming majority of Germans who saw no point in attacking Iraq. It appears very unlikely that Ms. Merkel would, once in office, risk all of her political capital by, for example, sending Bundeswehr troops into Iraq or helping Mr. Bush out any other way. The recent London bombings that many here see as a result of Prime Minister Tony Blair's support for Mr. Bush have only increased that feeling. As a foreign policy partner for Washington, the ride with Ms. Merkel may turn out to be a quite bumpy one as well.

But after all, election day is still at least two months away, the dice are not yet cast. The Chancellor and his foreign minister, Joschka Fischer from the Greens, are formidable campaigners as they have proven in the 2002 election with their unlikely (and razor-thin) comeback victory over Edmund Stoiber, the conservative candidate. Mr. Schröder and Mr. Fischer may be down, but do not count them out just yet.

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This article appeared in the July 14, 2005 AICGS Advisor.