With national elections slated for September 18, Germany's political season officially kicked off this week. Both sides are taking their usual battle positions: Social Democratic Party (SPD) Chancellor Gerhard Schröder is trying to play the anti-war card as he did in 2002, this time challenging President Bush on Iran instead of Iraq, while Christian Democratic Union (CDU) challenger Angela Merkel has announced a "competence team" with a strong accent on fiscal and economic acumen. But with gloomy news of crushing unemployment and a stagnant economy released almost daily, uneasiness, not ambition, is the underlying sentiment in both parties. Neither side seems eager to bear the responsibility for guiding the country by itself -- or the blame for the crises that will surely continue.
This unusual dynamic explains why polls now show that voters expect a grand coalition between the two big parties to emerge from the parliamentary wrangling after September 18. The advantage of sharing power is that neither side is fully in charge -- or so the tacit reasoning goes. As Merkel's once-substantial lead has eroded and her party's traditional coalition partner, the libertarian Free Democratic Party (FDP), languishes at 7 percent in the polls, Schröder has appeared more relaxed and confident on the campaign trail. But he and everyone else know that the chances are slim to none that the SPD and its partner, the Greens, will keep their parliamentary majority after the polls close. The new twist is that it now looks like the Christian Democrats and the Free Democrats might also fail to secure a majority, and no one is willing to partner up with a new left-wing grouping, now polling around 10 percent, that has allied the widely successful ex-Communist Party in eastern Germany with disgruntled ex-Social Democrats in the west. A grand coalition might be the only constellation that is both politically and mathematically possible.
That outcome would also mark official recognition that the center-right and center-left have muddled their way toward the middle. On the key issue of reform, for example, the CDU has largely backed unpopular SPD measures aimed at trimming back on the welfare state and making Germany more competitive. Both parties, for example, signed off last winter on legislation that links up the unemployed with low-paid menial jobs. And despite differing official platforms on fiscal policy, both parties have very little leeway to either raise or cut taxes. Merkel has tapped a flat-tax proponent, Paul Kirchhoff, as her finance adviser for the campaign, but his long-standing advocacy for a top marginal tax rate of 25 percent, combined with an abolition of tax deductions, stands little chance of gaining traction. Germany's growing budget deficit has taken serious tax relief off the table, and substantial tax increases would spell political doom. Nor is there much difference over longer-term quandaries such as pension financing; both parties reject outright proposals to raise the retirement age to 67, while both have backed increases in retirees' co-payments to doctors and pharmacies. But despite much common ground, it is the SPD, as the party in power in Berlin, that has come out of these reform debates far worse off, as voters handed it defeat after defeat in a string of state elections. In fact, some see Schröder's decision to call for early elections as a strategically canny invitation to the CDU to seize the reins and be held accountable for sticking to the reform path.
But there is another irony as well: While economic growth grinds to a halt and the unemployment crises continues unabated, Germany's export-oriented firms are booming. Share prices for blue-chip stocks have soared 20 percent since late April, boosted by strong profits for companies such as Allianz, Bayer, and T-Mobile. Now that many of these firms have slashed jobs and streamlined operations, Morgan Stanley recently deemed Germany more favorable for investment than France or Italy. Real labor costs have dropped in Germany by 10 percent over the last five years; this year, their expected rise, at half a percent, will probably be a euro-zone low. But all these gains in competitiveness have come at a very high price: unemployment ticking over 11 percent, domestic consumption dampened by stagnant wages, and widespread fear that social cohesion is fraying. The last is especially pronounced in Germany's most troubled regions: the east, where the ex-communists have their base, and the big cities. And to date, neither party has officially put forth far-reaching proposals that could give consumption -- a sizable 60 percent of the gross domestic product -- a shot in the arm.
Against this backdrop, it should not be surprising that the two parties have so far opted to steer away from economics as they try to draw battle lines. While everyone from Washington to Tehran knows that the United States has no good military options when it comes to countering Iran's nuclear ambitions, Schröder's recent statements dismissing the use of force against Iran should be seen not just as a deliberate irritant thrown at the White House but also as one of the few ways he can provide some contrast against Merkel's more pro-American statements. (Left unsaid is that German policy on both Iraq and Iran would change little under a CDU government, as much as the Bush administration might hope it would.) On the other side, some in Merkel's camp have reopened a raw, bitter debate over Germany's east-west divisions. Bavaria's prime minister, Edmund Stoiber, who lost by a hair to Schröder in 2002, stoked passions by pronouncing recently that “the frustrated” in the east should not decide German elections, and that not all voters are “as smart” as the reliably conservative Bavarians. The Christian Democratic chief of the neighboring state of Baden-Württemberg, Günther Oettinger, did not help matters much when he remarked that “the left and the cowardly should not decide how Germany should be governed.” Those comments drew fire not just from eastern politicians of all stripes but also from top Christian Democrats, who called them divisive and unnecessary. And probably for good reason: Soon after Stoiber's comments, a nationwide poll showed that only a quarter of voters agreed with him.
In effect, its own “red and blue” divisions are tearing Germany. Only this time it is not the coastal elites versus the heartland but the haves (the prosperous south) versus the have-notes (the big cities and the east). While both sides in the American election locked themselves into a brutal struggle over who would lead, however, Germany's two biggest parties fear that being in power poses more risks than benefit. In this most curious of elections, machtpolitik has become yet another German export that has little to do with Germans themselves.
Helen Fessenden is an Arthur F. Burns Fellow based at Der Tagesspiegel newspaper in Berlin.
