Submitted by Saxo Bank's Clemens Bomsdorf via TradingFloor.com,
- Martin Schulz has announced his intention to challenge Angela Merkel
- The race for heading Germany's government is open again
- Schulz's Social Democrats have gained tremendously in polls
- Merkel's party only ranks second in recent poll
- Schulz is as pro-European as Merkel and might want to govern with the left parties
- Germany continues on its growth path with GDP up 1.9% in 2016
Social Democrat Martin Schulz aims at making his party Germany's biggest again and at becoming Merkel's successor.
German politics = boring politics – in recent decades this equation has generally held true. At least that's how many observers would put it.
Fortunately, governments in Germany – Europe’s largest economy – have been much more stable than those in, for example, Italy. Even after the new right-wing party AfD entered the stage a few years ago, it seemed that Angela Merkel and her grand coalition with the Social Democrats was here to stay. German politics therefore remained reassuringly boring.
And yet, with the new Europe we face, that perhaps is no longer the best thing for them to be. Suddenly politics in Germany has become very interesting and the race for the chancellorship looks open again.
While the rest of the world appears to be pivoting to the right, Merkel's challenger has come from the left. He presents a liberal alternative to the narrative that's propelled the Donald Trumps of this world, that change can only be achieved from a protectionist and isolationist platform.
Martin Schulz, who was nominated on January 29 in a surprise move as the Social Democrats' main candidate, has a realistic chance of winning against Merkel and her Christian Democratic Union of Germany and bringing an unprecedented coalition into office.
His nomination has boosted his Social Democratic Party considerably. The week prior to Schulz's nomination, SPD was the preferred party of 21% of the electorate, according to polls by Bild. Now it's polling at 31%, meaning it gained almost 50% (or 10 percentage points) and is doing better in the polls than Merkel’s CDU.
The latter dropped from 32.5% to 30% over the same period. At the same time, Germany is continuing on its moderate growth path as the latest data from the statistical office shows. Its unemployment rate is at 6.3%.
In contrast to the Netherlands, France or of course the US, in Germany, the politician on the rise does not want to disintegrate his country and is not issuing scathing critiques of globalisation and internationalisation while at the same time claiming to be the only legitimate representative of the people. Instead, like his competitor Merkel, Schulz is an advocate of cooperation, particularly within the European Union.
He also makes the case that doing politics means finding compromises.
Obama is history as US president. Unlike him, Merkel can run again as head of government – also to counterweight successor Donald Trump.
Unlike the current chancellor though, he calls for change – to create a fairer and more just Germany. No wonder his supporters compare him to Barack Obama. They have even created a picture similar to the iconic Obama Hope poster, but showing Schulz and stating “MEGA”.
The four-letter word stands npt only for Schulz's fans belief in him as a fantastic candidate, but also as an abbreviation for “Make Europe Great Again”. The play on Trump’s slogan makes an ironic reference to the US president’s promise. At the same time, it probably also appeals to those that are fascinated by Trump’s approach and dislike the so-called establishment.
This fits into the emerging reality that the far right Alternative fur Deutschland, or AfD, lost support since Schulz announced his intention to run. The aforementioned Bild poll sees AfD now (week 6 – see chart above) polling at 12%, down from 14.5%. Additionally, Schulz also manages – at least in the polls – to summon support from those that otherwise would not have wanted to vote, according to another Bild survey.
Fan page for Schulz on Reddit.
In an interview with Der Spiegel, however, he declared that while he “want[s] to win them [AfD voters] back,” he would never “run such a campaign [as Trump's] under any circumstances.” he added that the US president “is gambling with the safety of the Western world. Donald Trump must be taken seriously. He is fulfilling his dangerous campaign.”
While he is very clear on that, the policies Schulz wants to implement remain vague. His values, however, are not. As does Merkel, he believes in Europe as “a region of freedom and peace, of security, law, democracy, tolerance and mutual respect,” as he put it in the interview.
Schulz had been a member of the European Parliament since 1994 and its president since 2012; he left both positions earlier this year. Taking into account the criticism the EU is currently facing, this might be seen as a position of weakness. However, it turns out that it seems far more important that he was not part of the coalition with Merkel in Berlin – and that his rhetorical powers clearly top hers.
Schulz also told the magazine that Germany, “as the largest European Union member state, found the correct response in an historic situation” by accepting large numbers of refugees in 2015 – an act Merkel since has been heavily criticized for, including by her fellow politicians.
As mentioned above, fairness will be a major focus for him when running for chancellor. This will also affect business, as it includes more controls to ensure companies comply with minimum wage legislation as well as tax increases: “People who work hard for their money cannot be placed in a worse position than those who allow their money to work for them,” as he told Der Spiegel.
Trump in campaign-mode. Now he is the US president and wants to "make America great again".
Speaking of money, Greece also deserves a mention. Merkel's fellow party member and serving finance minister Wolfgang Schäuble has always taken a hard stance on the Mediterranean nation, incurring the ire of many Greeks against himself and the German chancellor. Schulz, on the other hand, told Die Welt that a Grexit is not what he wants.
“Anyone flirting with the idea of Grexit risks breaking Europe apart. This may be in the interest of Donald Trump or [French National Front leader] Marine Le Pen, but it is certainly not in the interest of Germany and Europe. It is extremely dangerous,” reads the Guardian's translation.
A concrete programme is still due and what Schulz and his party will be able to realise is highly dependent on what coalitions end up getting formed.
If the strengthening of the Social Democrats continues, a coalition with the left party Die Linke and the Greens could become an option. That constellation has never been seen before in Germany on a national level. Neither has an alliance between Merkel’s CDU and the liberal FDP – which has been the preferred partner – and the Greens. While the former would clearly mean a shift to the left, the latter could strengthen liberal positions.
One thing remains clear: the only coalition that would definitely have a strong majority also after September 2017 is the current one of Merkel’s CDU and Schulz’ SPD. Going down that path again, however, would be both sides' worst case scenarios, one reason being that a coalition of the two biggest parties in parliament could see the extremists getting more support.
Cologne, one of the largest German city's, is only one-hour drive from Würselen, where Martin Schulz began his political career as a mayor.