Gerhard Schröder’s last stand

Michael Naumann
24 May 2005

Let’s remember Muhammad Ali’s last fight against George Foreman in 1974. For eight rounds the champion was pummelled and punished by his gargantuan opponent, hiding, evading, ducking and taking numerous blows. In the final round, however, Ali rediscovered his immortal dignity, fought back, knocked the pretender out – and flew back home from Kinshasa as the living myth he already was.

Was it that fight which damaged Ali’s brain and induced Parkinson’s disease? This is disputed; a lot of people have Parkinson’s without ever having been boxers. What is remembered, anyhow, was Ali’s desperate and yet victorious strategy.

All of this comes back when looking at the German Chancellor, Gerhard Schröder’s decision on Sunday 22 May to call for a premature federal election – hours after his ruling Social Democratic Party had lost its seventh consecutive state election to the opposition Christian Democratic Union (CDU) and their political dinghy, the neo-liberal Free Democratic Party (FDP).

Among Michael Naumann’s earlier articles in openDemocracy:

“Germany’s momentous election” (September 2002)

“Between Rumsfeld and France” (February 2003)

“The end of Realpolitik” (February 2003)

“War in the ruins of law” (April 2003)

“Germany isn’t working” (May 2003)

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The political gains of Angela Merkel’s conservative CDU in the six years since the SPD took power in October 1998 have given her full control of Germany’s second chamber (Bundesrat), enabling her to block any legislation directly pertaining to the sixteen states that make up the Federal Republic of Germany. A series of Supreme Court decisions has allowed the Bundesrat to attain a growing measure of control over the federal parliament (Bundestag). This, and the continuous process of European legal harmonisation (about 60% of all laws emanating from the federal parliament now originate from Brussels), has brought about a political standstill in a country in desperate need of economic, educational and social change.

Then came North Rhine-Westphalia. And instead of sitting out another sixteen months with a diminishing public mandate and without the ability of, say, Silvio Berlusconi, to cobble together new coalitions whenever needed, Schröder came up with this final and desperate move. A Machiavellian move – keep your opponents on their toes and surprise them …

It was not his personal dignity which was at stake, Schröder claims, although he certainly took that into consideration as well, but the future of the whole country and, alas, of the Social Democratic Party in Germany. Thus, we are not looking at power politics per se, nor at the entertaining aspects of democracy – a system which certainly could not survive on boredom in the age of an ever-growing entertainment industry – but at the future of Germany’s well-honed yet by now almost dysfunctional social welfare system and the country’s role as the still undisputed largest economic entity in Europe.

The similarity between the fate of the United Kingdom’s Labour Party in the pre-Blair years and Germany’s SPD is obvious. Although the German trade unions never had complete control of the party, their clientele formed the strongest segment of its voters, members and supporters. Globalisation and the opening of the labour market to east-central Europe have hit these groups hard. 5 million people (around 10% of the working population) are unemployed.

Yet paradoxically, these trends have not led to an economic standstill (as repeatedly suggested by the Economist and other ill-willed observers of Germany), but rather to a strong surge of Germany’s industrial inventiveness. In the last two years, the country has maintained its pole position as the leading export-nation in the world, bypassing even the United States and Japan – but also bypassing the traditional labour forces of Germany.

In other words, the less than satisfactory growth rate of 1% is due to a lack of internal consumption, which in turn is based on a loss of confidence and growing anxiety amongst the middle class. All this is reinforced by the social security system’s inability to respond to the simultaneous decline of the population (with a birth rate of 1.3%, the Germans seem to be set on a course of self-extinction by 2100).

Schröder’s last stand

In the course of his government, Gerhard Schröder has been forced to confront three major issues: reunification costs, unemployment, and over-regulation.

First, the costs of German reunification seem to be cast in iron, or rather gold: had it been available for infrastructural measures, the annual transfer of 80 billion euros into the social systems of the East Germans (who, of course, had never put any money into pension reserve funds or equivalent) would have resulted in an annual German growth rate of 2%. Actually, it is one of the miracles of German unification that West German populists have not politically abused this transfer. This might still happen.

Second, the effect of unemployment is more than to develop mental strains among a nation that well remembers the practically full employment of twenty years ago; the ensuing benefits system has induced complacency and abuse amongst certain groups. Alongside notorious cases of feckless opulence, the welfare bureaucrats themselves have become a problem also: 90% of unemployment office workers are busying themselves recording statistics, while only 10% are active in helping people find jobs.

Third, over-regulation in Germany has become a modern fairy-tale, told in a mirror hall. Germany has six times as many judges as Britain per capita, and 20% more tax laws than the rest of Europe put together. The number of ecological laws is equally excessive; some have become the joke of a society that loves to garden, only to discover that it is probably digging and planting outside the law (if it could only discover which one).

These three issues have together defined the domestic political debate of the last six years. The Schröder government’s forceful reforms (for example, of the Bismarckian social insurance system) were accompanied by approval or howling from diverse interest groups, yet they added up to a substantial, albeit slow, advance for the country. The CDU did what any opposition should – badmouth even those reforms it had acquiesced to.

When Schröder won a second election in 2002, he did so by redefining Germany’s role within Nato – refusing to tag along into the quagmire of Iraq. The conservative opposition was mealy-mouthed and did not know whether to follow their national instincts or those of George W Bush.

But when support for the Schröder government began to shrink, it was amongst a population at heart conservative and averse to change. After 1945, nobody has ever accused the Germans of being optimists. In fact, most of our optimists must have emigrated to the US in the 19th century. The only one left seems to be Gerhard Schröder himself. Within the next three months he will have to persuade the SPD (which has lost over 100,000 members in recent years) and the voters that the Angela Merkel-led CDU does not possess a magic wand with which painlessly to cure the German illness. In fact, the majority of his party’s supporters seem to expect miracles: maintaining high living standards, finding jobs for the unemployed and improving the worn-out educational system.

To secure his early elections, the Chancellor must call a vote of no confidence in parliament, where he actually holds the majority – and then ask Horst Köhler, the federal president, to dissolve it and call for an election. All this will take place between now and the beginning of July. Elections might be held in September. Until then, Schröder has to reassemble his centrifugal party-wings behind him and then persuade the Germans that they would be better off with him than with Angela Merkel.

He is, in short, looking for a presidential mandate, hoping that this could persuade the stubborn German institutions to follow him. In his heart of hearts he may be hoping for a grand coalition between both big parties, the SPD and CDU – under his leadership, of course. Chances for that are minimal. But being the political animal that he is, Gerhard Schröder will prefer to go out with a bang – whereas his party would choose to leave with a whimper lasting at least a decade or two, suffering from political Parkinson’s disease.

Further reading:

Economist country briefing
German politics resources
Steve Crawshaw, Easier Fatherland (2004) – essential portrait

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