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Try to picture what Angela Merkel would be like as a man, slightly younger and of West German origin. But just as solid, rational, and pragmatic as the woman who has governed Germany for the last 15 years. Unimaginative, yet endowed with a wicked sense of irony (mostly kept private). Combining political flexibility with a lot of experience and a deft hand at power play.

You are bound to end up with Olaf Scholz, 62, current vice-chancellor and finance minister. In terms of character and politics, he is Merkel’s twin—and so far, also her most important ally in the cabinet. And if it was up him—and now his party, too—Scholz would become her successor as well.

In a surprise coup, Germany’s Social Democrats on August 10 nominated Scholz as their candidate for the chancellery in the 2021 elections. The surprise was in the timing, a very long 13 months away from the likely polling day, and in the unanimity of the decision. But not in the choice itself: in a party that has used up leaders at a crazy rate, Scholz is the last popular, well-known figure (read our 2018 profile of him here.)

He owes this popularity in equal parts to his own talent, his excellent working relationship with Merkel, and the appeal of his sober pragmatism during the coronavirus crisis. Yet as a nominee, he will now be exposed to much closer and more unforgiving attention.

In the Spotlight

The Wirecard scandal—a huge case of fraud in a now-bankrupt German payments system company that should have been uncovered and stopped by financial regulators reporting to the finance minister years earlier—may provide a first taste of the changed atmosphere. Politicians from every other party will now try to lay the blame at Scholz’s door.

Even apart from Wirecard, Scholz will have to perform a multiple balancing act until the 2021 elections. It begins with his own party, a divided and self-destructive organization, where Scholz is respected but not liked. Just nine months ago, Germany’s Social Democrats (SPD) passed him over for the party leadership and chose two relatively unknown politicians from the left wing instead.

In any case, the SPD has been moving much further left as its election results have deteriorated–yet Scholz appeals to voters precisely because he is a moderate. As a candidate, he will need to motivate his party to campaign for him while reassuring centrist voters that they need not fear drastic changes. That may not be easy: the SPD’s most plausible claim to the chancellery means entering a coalition with not only the Greens, but the socialist Left Party.

New Rifts

In the meantime, Scholz will be facing new rifts within the grand coalition with Merkel. Earlier this year, Scholz could rely on the Christian Democrats (CDU/CSU) to support the enormous spending programs he designed to help the German economy survive the COVID-19 crisis. But what happens if the pandemic continues and the slump gets deeper? Merkel’s conservatives will hesitate to endorse further deficit spending for ideological reasons. But they also won’t want to hand Scholz another victory.

The same is true at the European level, only more so. Scholz is a European integrationist. Even before coronavirus, he broke with some of the taboos set by his predecessor in the finance ministry, Wolfgang Schäuble, by backing, for instance, a European deposit insurance scheme. When the pandemic set in, Scholz worked closely with his French counterpart to push for more generous European support to those member states that were hit hardest by the virus.

As candidate for the chancellery, Scholz said that a European Union based on more solidarity was going to be one of his main concerns. Such a stance is bound to lead to conflict within the current coalition. Merkel did put her considerable political weight behind financial support for weaker EU countries this summer. But many in her party quietly disagreed.

Tensions over Europe

Such tensions are certain to rise to the surface now as the race to succeed Merkel heats up within the conservative bloc. It is lucky for Europe that the EU budget deal was finalized in the early weeks of the German EU presidency; during the remaining four months, the emerging domestic differences are going to be much more of a hindrance.

Just before Scholz’s nomination, the SPD stood at 15 percent in the polls, behind Merkel’s conservatives (38 percent) but also the Greens (18 percent). Scholz does not lack self-confidence; he believes that a good candidate can add 10 percent to the score. But even then, and even if SPD remains united behind Scholz, the math remains uncertain.

Much depends on the future course of the pandemic. Politically, the COVID-19 crisis has boosted both Merkel’s and Scholz’s approval ratings. When Merkel leaves office next year, will German voters turn to her closest political look-alike? It’s possible. But so is the reverse. A German public that is fed up with the pandemic and its effects on everybody’s life may want to opt for change.

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On Saturday morning, Chancellor Angela Merkel published her weekly video podcast. This one was about the importance of craftmanship in Germany, and how much it does for the vocational training of young people. Routine, happily boring routine, established over hundreds of Saturdays since Merkel first took office in 2005.

On Saturday night, the chancellor’s routine ended abruptly. Her junior partner in government, the Social Democratic Party, announced the result of its leadership vote: and—in a very unpleasant surprise for Merkel and arguably bad news for the SPD itself—the anti-establishment, anti-grand coalition faction won. As a result, the chancellor’s Saturday video messages may soon be history.

Instead of choosing Finance Minister and Vice Chancellor Olaf Scholz, a well-known and moderate politician who was strongly in favor of staying in government, SPD members voted for two virtual unknowns: Saskia Esken, a Bundestag backbencher, and Norbert Walter-Borjans, a former finance minister of the federal state of North Rhine-Westphalia. These two got the vote because they promised to take the SPD out of the Merkel coalition unless government policy changed dramatically to the left.

„I don’t believe that the grand coalition is the right constellation in the long run,” Walter-Borjans explained in a television interview. “But we’re in there, and that’s the basis on which we have to say what needs to be done. And if there is a blockade mentality on the side of the coalition partner, then the decision has to be taken that this cannot continue.”

An Inexperienced Duo

Esken, 58, has been a member of the Bundestag since 2013, specializing in digital policy. Yet she has never held office in government or a top position in the party before. Walter-Borjans, 67, has no parliamentary experience, though he was finance minister in Germany’s most populous state for seven years, between 2010 and 2017. While he made a name for himself fighting tax fraud, he also gained a reputation as a reckless spender. Walter-Borjans ran deficits that were so high that the state’s constitutional court judged his budgets to be unconstitutional several times in a row.

Most of the party leadership as well as the SPD group in the Bundestag had been backing Scholz, so the winning duo may find it difficult to gain support in Berlin. Esken and Walter-Borjans are also hampered by the narrow margin by which they won the contest: of the 425,000 SPD members, only 55 percent took part in the run-off. Of those who did vote, 53 percent opted for Esken and Walter-Borjans. Scholz and his running mate Klara Geywitz won 45 percent of the vote.

Political observers think it was a kind of Brexit vote, motivated by an anti-establishment sentiment against what many SPD members see as a distant and unresponsive party elite in Berlin. Similar to the Brexit referendum, the margin for the winning side is small, which is likely to weaken the new leaders’ legitimacy and deepen divisions within the SPD even further.

It’s a disappointing result for all those who had hoped that holding grassroots elections would help unite and renew Germany’s oldest political party—a party that has seen its election results decline ever more rapidly since the early 2000s.

According to the most recent Forsa poll (taken before the leadership count was announced), the SPD stands at 14 percent of the vote, far less than Merkel’s conservatives (27 percent) or the Greens (22 percent). It is only just ahead of the far-right Alternative für Deutschland (13 percent).

Conflicts Ahead

Walter-Borjans and Esken campaigned on a leftist agenda, calling for a huge boost in investment, more radical measures against climate change, and more generous subsidies for low pensions. They also want to introduce a wealth tax and raise the minimum wage to €12 per hour, a whopping 25-percent increase.

Many details remain open. The SPD will hold its annual party congress from December 6 to 8 to officially confirm Esken and Walter-Borjans in office. The two new leaders have announced that they will seek a vote about their agenda for the coalition. And while delegates are unlikely to back every measure that their two new leaders have proposed, some will certainly pass, leading to a massive conflict within Germany’s governing coalition.

Merkel’s conservatives, who are caught in a leadership struggle of their own, made it clear that they have no intention of giving in to any new demands from the SPD. Annegret Kramp-Karrenbauer, the embattled head of the Christian Democratic Union, pointed to the coalition agreement the SPD signed two years ago. “For the CDU, that’s the basis of the deal,” she said. “On this basis, we are willing to enact policy for Germany.”

A possible scenario is a truce over a Christmas and a blow-up early in the new year. If the SPD ministers walk out, Merkel could choose to continue with a minority government, a first in post-war German history—or call new elections.

A minority government would be unstable and unlikely to last to the end of the regular term in 2022, but it would provide Germany and Europe with an experienced leader—Angela Merkel—during the country’s EU presidency in the second half of 2020. More likely, however, are new elections, which could take place in March at the earliest. As the polls stand now, the result could be a coalition between conservatives and Greens, another first at the national level.

But Angela Merkel won’t be chancellor of that government.

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When the SPD addresses the big questions in international politics, it doesn’t take long until someone evokes Willy Brandt or Helmut Schmidt—names that stand for two social-democratic eras in German foreign policy. The global impact those two chancellors had rightfully remains a point of reference even today.

Much less present is the period from 1998 to 2005, although the Schroeder years still shape our foreign policy actions today; indeed, the red-green foreign policy compass can still serve as a reliable guide in 2019.

The center-left government led by Gerhard Schroeder, a coalition of Social Democrats (SPD) and Greens, had barely entered office in 1998 when it faced its first test: Would Germany take part in the NATO mission against Serbia? Schroeder and Green Foreign Minister Joschka Fischer demonstrated decisiveness and persuasiveness. After a fierce debate within their parties and society at large, the government supported the Kosovo mission—one still seen as necessary today—in order to prevent a humanitarian catastrophe in Germany’s immediate neighborhood. The government proved here, as it did with the Afghanistan mission after the 9/11 terror attacks, that it can be counted on.

It was as true then as it is today: Germany is a reliable partner to our allies. Because of the changed security situation in Europe—above all Russia’s illegal annexation of Crimea and its war in East Ukraine—it is important that we changed course and began once again to invest more in our defense. But anyone who measures solidarity solely in euros or dollars misjudges our extensive engagement: Germany is not only the second-largest supplier of troops in NATO, but also a partner that its allies can rely on, as we are still proving today in Kosovo and Afghanistan.

The Afghanistan Example

Afghanistan provides a good example of our approach: If a state cannot provide a minimum level of security, administrative presence, social services and education—and combine this with measures to politically involve marginalized population groups—then terrorist groups have it easy, and outside military support can only make a limited impact. The Schroeder government counted from the very beginning on building national and international support for the Afghanistan mission, which culminated at the end of November 2001 in the so- called Petersberg Process. The Federal Foreign Office under Heiko Maas is building on this tradition by promoting intra-Afghan dialogue, most recently at the conference in Doha in July 2019.

However, saying yes to more international responsibility, to solidarity, and alliance loyalty, did not mean that the SPD-Greens government would blindly follow into any foreign-policy adventure. Hence the no to the Iraq War. Chancellor Schroeder resisted US President George W. Bush’s attempts to cajole Germany into participating—a path advocated by then-CDU leader Angela Merkel. Developments after the Iraq intervention showed just how right Schroeder had been. The events of those years are seared into German society’s collective memory. The false statements about Iraqi weapons of mass destruction in particular created a deep sense of mistrust among Germans toward the US government. Having been temporarily forgotten in the euphoria of the Obama years, it is now again widespread because of the behavior of President Donald Trump.

The American saber-rattling towards Iran has massively increased tensions in the Middle East and raised fears of another US military intervention. But even if there is much to remind us of 2002/03, there are also conspicuous differences: Trump entered the political stage with the promise to bring American troops home. It is therefore unlikely that this president would start a new war involving US ground troops in the Middle East. But even with limited military strikes, there is a real danger of escalation of.

This is why we are very clear on this point: As long as we Social Democrats are part of the government, Germany will not take part in another military adventure in the region. It is also, however, clear that Iran must return to compliance with the nuclear agreement or UN sanctions will be reintroduced. The end of the nuclear deal would set off an arms race in the Middle East. Iran cannot have any interest in this—nor in a comprehensive sanctions regime with European participation.

Prioritizing Civil Means

Even if the Schroeder government accepted the use of military force as a last resort, it left no doubt that civilians means always had priority. Under Schroeder, the interdepartmental action plan “Civilian Crisis Prevention, Conflict Resolution and Post-Conflict Peace-Building” was adopted, and the Civil Peace Service, the German Foundation for Peace Research and the Center for International Peace Operations were founded. The foreign ministry built on this under Frank-Walter Steinmeier and Sigmar Gabriel to develop its expertise and capabilities in crisis management, conflict management, and peace promotion. Exemplary for these efforts is the establishment of the Directorate-General for Humanitarian Assistance, Crisis Prevention, Stabilization and Post-Conflict Reconstruction at the Federal Foreign Office.

Foreign minister Heiko Maas is determined to push forward with civilian crisis management. He sent an important signal in April 2019 when he dedicated the German Presidency of the UN Security Council to crisis prevention. Germany will also use its EU Council Presidency in 2020 to further expand the area of civil crisis prevention. As an important contribution, the foreign minister is pushing ahead with the establishment of a European Center of Excellence for Civil Crisis Management in Berlin. Particularly in view of budget pressures, we should not forget that investments in crisis prevention pay off financially. Every euro we invest today in prevention will benefit us in the future, since we would otherwise have to spend that money many times over to contain and resolve violent conflicts.

Committed to Multilateralism

Although Schroeder spoke of a “German way” in the 2002 election campaign, foreign policy under the Red-Green coalition was still fundamentally European and committed to multilateralism. Schroeder and Fischer successfully supported the eastward enlargement, thanks to which the European Union won ten new member states in 2004. Fifteen years later, Maas is focusing on strengthening relations with the countries that joined the EU in order to counter the feeling of neglect within the EU that has since arisen. The SPD-Greens government also pressed ahead with bringing Turkey closer to the EU by opening accession negotiations—a political approach to a difficult partner, on which many in Turkey place their hopes, especially after the Turkish government’s backsliding on democracy and human rights. This approach should not be abandoned.

In his increasingly difficult relationship with Russia, Heiko Maas can build on the discussion formats introduced between 1998 and 2005. Schroeder created the position of coordinator for inter-societal cooperation between Germany and Russia and, together with President Vladimir Putin, initiated the annual Petersburg Dialogue. Particularly in these difficult times, it is important to have tried and tested channels at our disposal. We should venture more cooperation with Russia in selected areas of common interest. The EU should strengthen the dialogue with the Eurasian Economic Union at the regulatory and technical level and institutionalize it in the long term. Otherwise others will soon determine the rules of our neighborhood. China in particular is gaining more and more influence. Such cooperation is not incompatible with current sanctions and could help restore lost confidence.

The SPD-Greens government faced unprecedented foreign policy challenges from day one. Those years were not without their missteps, and not everything that looks successful from today’s point of view was the sole achievement of the Social Democrats—no question about it. But to take stock of the years between 1998 and 2005 is to come to the conclusion that the third era of social-democratic foreign policy under Schroeder set us, in many areas, on a course that is still right today—and therefore stands in the tradition of Brandt and Schmidt.

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SPD party leader Andrea Nahles resigned on Sunday after a disastrous week in which the Social Democrats won only 16 percent of the vote in the European elections (11.5 percent less than in 2014) and lost to the CDU in the city state of Bremen, a traditional party stronghold it has governed for over 70 years.

In the aftermath, a bitter debate erupted within the party over how to respond—and whether it was worth staying in government with Chancellor Angela Merkel’s CDU/CSU if voters weren’t recognizing or satisfied with their work. Nahles, the person in the SPD leadership most supportive of the present “grand coalition,” or GroKo, initially went on the offensive, moving up the election for leader of the parliamentary group from September until Tuesday.

But by the weekend, it was to clear that Nashles simply didn’t have the support of her colleagues. The woman who spent 30 years working her way up the party ladder stepped down in a matter of days, having hung on to the job just a few months longer than her predecessor Martin Schulz.

How did it happen? The dust is still settling, but other Social Democrats have spoken openly about the infighting that went on behind closed doors. Members of a party promising “justice and solidarity” should “never, never, never again treat each other like we did in the past few weeks,” wrote Kevin Kühnert, the influential head of the party’s youth wing. Michael Roth, the minister of state for Europe, tweeted that some of his colleagues “should be ashamed of themselves.”

Even Nahles’ opponents had warm words for her. Merkel praised her “fine character,” FDP head Christian Lindner her “honesty and competence.” SPD supporters, meanwhile, drew attention to her concrete achievements, such as pushing through a national minimum wage against CDU opposition when she was labor minister in the previous coalition.

One Leaves, Three Enter

Evidently, though, these achievements did nothing to stop Germans from voting for the SPD’s competitors. The fact that the chancellor was introduced to graduating Harvard students last Thursday as the person who “introduced the minimum wage” says everything about the perils of being a junior partner in government. Citizens don’t always know who to blame—or who to credit.

The SPD does not yet have a replacement lined up; the party leadership will temporarily be held by three politicians: Mecklenburg-Vorpommern premier, Manuela Schwesig, Rhineland-Palatinate premier, Malu Dreyer, and the boss of the SPD in Hessen, Thorsten Schäfer-Gümbel. As the most prominent Social Democrat on the federal level, Finance Minister and Vice Chancellor Olaf Scholz will certainly be in the mix for the top job, although on Sunday night appearing on talk show Anne Will, he said he wasn’t interested.

But that’s a personnel decision, not a decision about the future of the party or the coalition governing Germany as such. The SPD remains in an exceptionally difficult position: Can it afford to leave the government and risk triggering fresh elections at a time when it is well behind both the CDU and the surging Greens in the polls? Or, from another perspective: With the party stumbling from crisis to crisis and haemorrhaging support, can it afford not to?

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Heiko Maas, Germany’s new foreign minister, grew up in the Saarland, a coal-and-steel region in the very west of West Germany. This small state is steeped in Franco-German history: Maas’ own home town of Saarlouis was built as a fortress by Louis XIV; during Hitler’s rule the name was changed to Saarlautern to make it sound more German. After 1945, the French turned Saarland into their protectorate, until a bitterly-contested referendum in 1955 returned it to Germany.

“My grandmother lived in the same house, in the same street, in the same city for 80 years—but because of the political back and forth, she had five different passports in her life,” Maas wrote in an opinion piece for the weekly newspaper DIE ZEIT last year. “But she lived long enough to see that the question of Germany or France has now lost its significance for us Saarlanders, because Europe became the answer to it.”

Maas, 51 and a Social Democrat since 1989, is a newcomer to foreign policy—in other words, an unknown quantity on the international stage. Yet his background as a Saarlander is certain to influence the choices he will make. He is clearly pro-European and in favor of renewing the Franco-German alliance, just as he is clearly not naïve about the challenges it faces.

A lawyer by training, Maas is controlled, reflective, and polite, with a mocking sense of humor. In Berlin, he is admired as a natty dresser, wearing closely cut suits and ties in sober colors. As a former triathlete, he knows how to pace himself. “The goal,” he once said, “comes only after the third discipline.”

“He’ll Be Excellent”

Maas sets a striking contrast to Sigmar Gabriel, his brilliant but impulsive predecessor. It is all the more remarkable that Gabriel—who is bitter about having to leave the foreign ministry—immediately endorsed Maas. “He will be excellent,” he said.

Of course, it was also Gabriel who brought Maas to Berlin in the first place. Back in 2013, when Gabriel was SPD leader, he nominated the Saarlander for the justice ministry. Until then, Maas had essentially spent his life in Saarland. He served as minister in several state governments, but could never win the top post, though he ran three times for the state premiership. Maas’ reputation was on the wane, and his appointment to the ministry in Berlin came as a surprise.

Yet in contrast to most of his colleagues from the German provinces, Maas quickly caught onto the way politics works in Berlin. One of his closest advisers had been working for the SPD group in the Bundestag before and already knew everybody. Maas has also played social media skillfully and actively (perhaps too much so, some of his detractors say), and managed to build a good working relationship with Interior Minister Thomas de Maiziere—no small thing given the fierce hostility that is traditional between justice and home affairs.

As justice minister, Maas was immensely productive, with a keen sense of issues that play well in his party and the wider public. His ministry presented new laws on issues ranging from rehabilitating people convicted under outdated laws banning homosexuality to a quota for women in supervisory boards, from protecting small-time investors to stricter anti-doping laws. Not everything turned out perfectly: A new law restricting rent increases turned out to be ineffective, and Maas also drew a lot of fire for his law against hate speech on the internet.

Scourge of the Far Right

A frequent talks show panelist, Maas speaks out on every occasion against xenophobic and anti-Islam movements, like Pegida in Dresden or indeed the Alternative für Deutschland (AfD). In return, he has received massive amounts of hate mail. After finding a nine-millimeter bullet in the letterbox of his private apartment, Maas was put under additional police protection. If anything, though, that made him more determined to confront the far-right.

Nor has Maas pulled his punches on international issues. “Nobody fosters anti-Americanism as much as the American president,“ Maas said in August 2017. Donald Trump was acting in a catastrophic fashion such as Maas could never have imagined with any previous US president. In his opinion piece for DIE ZEIT, Maas called for a harder line against Turkey and Russia as well. “It is precisely because there are aggressive and authoritarian powers at the gate of Europe that the continent needs to show unified strength,” he wrote.

Presumably, Maas’ tone will become a bit more diplomatic when he is sworn in as foreign minister, but he will likely not soften much on substance. Particularly on Russia, he might be tougher than his two predecessors— Frank-Walter Steinmeier and Gabriel—who are both close to former SPD chancellor Gerhard Schröder, a personal friend and ally of President Vladimir Putin.

Of course, much of Germany’s foreign policy is set by the chancellery, and Angela Merkel is unlikely to give this newcomer much leeway in her fourth term in office. Yet it is also clear that Germany alone will have less and less pull in the world, be it in relation with the US, China, or Russia, or in stabilizing Africa and the European neighborhood. With his Saarland background, Maas brings a much-needed Franco-German and pro-European instinct to the table.

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Four months of wrangling over a new government coalition have left Germany’s political establishment badly bruised. Chancellor Angela Merkel has lost much of her authority; for the leader of the Social Democrats, Martin Schulz, it’s been even worse. When coalition negotiations finally began on January 26, the SPD’s ratings in the polls sank to 19 percent, a new record low.

Yet as the deeply divided party struggles to make the best out of several more years as junior partner to Merkel’s conservatives, a new leadership hope has emerged. Andrea Nahles, 47, the leader of the Social Democrats in the Bundestag, looks likely to take over from Schulz sooner rather than later. The next step for this feisty, outspoken career politician could then be a run for chancellor.

In many ways, Nahles is the anti-Merkel. Angela Merkel, daughter of a protestant pastor in Brandenburg, had a career as a physicist in East Germany. Andrea Nahles, a devout Catholic, grew up in the rural Eifel region in the very west of West Germany, studied literature, and spent her entire professional life in politics.

Merkel has said many times that she could never have imagined the fall of the Berlin Wall and a life in the Federal Republic. In contrast, any portrait of Nahles is certain to mention her school yearbook, where at the age of 19 Nahles described her ambitions in life as “house wife or federal chancellor.” As one recent observer wryly mentioned, she has missed out on the first.

Where Merkel, as a latecomer to politics, has always kept a certain distance from her own party, Nahles has spent her entire adult life in the SPD. Just like Gerhard Schröder, the last SPD politician to make it into the chancellery, Nahles built her career in the Jusos (Young Socialists). The SPD’s youth organisation is known as a fierce training ground for any aspiring leader, calling for strategic finesse and ruthlessness as well as networking skills.

In general, the Jusos are more leftist than the SPD, and Nahles, their national leader from 1995 to 1999, used to be highly vocal about social injustice and the need for a wealth tax. Her outspokenness – sometimes earthy, sometimes vulgar, but always loud—earned her praise from then-SPD leader Oskar Lafontaine, who called her “God’s gift to the SPD.” The wider public, however, didn’t like her much. Ever since, Nahles has been hampered by a reputation for being shrill—a handicap she will have to overcome if she really wants to be chancellor one day.

A Strategic Mind

There is no doubt that she has a brilliant strategic mind. In the early 2000s, Nahles was one of the first Social Democrat leaders to recognize how dangerous the new Left Party would become to the SPD. As a member of the top leadership of her party, she vehemently opposed Chancellor Schröder’s social and labor market reforms, and drew up a radical reform plan for health care insurance.

As the years went by and Nahles became first secretary general and then deputy leader of the SPD, she slowly moved toward the political center. From 2013 to 2017 she served as federal minister of labor and social affairs, a hugely difficult portfolio. Her conservative colleagues in Merkel’s cabinet didn’t particularly like her politics—introducing a minimum wage and allowing workers to retire after 45 years on the job – but they came to respect her effectiveness in managing a large public administration. At the same time, Nahles retained her gift for simple and direct language.

Yet her name never came up last year when the SPD was casting around for a candidate to challenge Merkel in the September elections. Instead, Martin Schulz, a former president of the European Parliament, became the Social Democrats’ surprise candidate for chancellor.

Schulz’ start was hugely successful, but all too soon disillusionment set in, leaving the Social Democrats with only 20.5 percent of the vote on September 24, their worst result in over 70 years. Schulz managed to hold on to his post as party leader, but was unable to claim the one office where he could be certain of high visibility over the coming years: party leadership in the Bundestag. It was Nahles who won the post.

Ever since the elections, Schulz has been struggling. Having initially declared that his party would not take part in any new government, he was forced to reverse himself when talks between Merkel’s conservatives, the Greens, and the liberals broke down. This proved very difficult to sell to the SPD’s grass roots, who believe that another four years as junior partner to Merkel will seal the party’s downfall.

No wonder the SPD’s party congress on January 22 was nervously awaited by its leadership. It seemed not at all certain that delegates would support the decision to enter formal coalition talks with Merkel. Much was expected of Schulz’ one-hour speech: This was his great chance to rouse and convince the party base. Failure, he knew, would be laid squarely at his door.

But Schulz was suffering from a bad cold, and his speech was lackluster. It was Andreas Nahles who saved the day, galvanizing the delegates in just six-and-a-half minutes. “I am a member of this party because I want to see great things achieved,” she shouted in a hoarse voice. She wasn’t afraid of new elections, she added, she was afraid of the questions voters would ask if the SPD had to campaign for the very same things that they could have implemented in government. “People are going to say that we’re bananas!”

In the end, 56 percent of delegates approved the coalition talks. Almost single-handedly, Nahles had given Merkel a chance at forming a new government, saved Martin Schulz from having to resign as party leader, and positioned herself as a possible successor. It took six-and-a-half minutes—and the skill of a lifetime in politics.

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More than 100 days after September’s general election in Germany, Sunday marked the start of Chancellor Merkel’s second attempt to form a new government and secure a fourth term.

Framing the long-delayed talks, she warned in her New Year’s address of a “growing rift” in Germany, between those who see their country as strong and successful and those with concerns of being swamped by immigrants or excluded from society.

“These are the two realities of our country … and both of them motivate me,” she said.

It was a well-timed observation: despite steady economic performance and a record low jobless rate, a representative survey in the national daily Welt found just a third of Germans (36 percent) were optimistic about the future, down from 51 percent in 2014.

The German leader said a priority for her fourth term – if she secured one, of course – would be to rebalance the social market economy, Germany’s postwar model of tying economic success to social cohesion. How she plans to do this looms large over coalition talks in a supposed news blackout. No leaks, no interviews, no tweets. Those were the rules.

The blackout lasted 24 hours while the talks – and German federal politicians’ full pay go-slow – roll on.

If all goes well, the unprecedented interregnum is not likely to end until Easter. Merkel is angling an encore of her last coalition between her center-right Christian Democratic Union (CDU), the more right-wing Christian Social Union (CSU) from Bavaria, and the center-left Social Democratic Party (SPD). They have spent the last four years governing together, but they are deeply wary of each other after voters in September dealt them all their worst results since 1949.

This week’s talks – or, more accurately, talks about talks – are about seeing whether they can find a common basis for formal negotiations in the weeks ahead. After looking like losers on election night, each party is battling to emerge the winner. But not everyone can win and, for the risk-averse German leader, these are tortuous times.

On election night, after a drubbing from voters, a grim-faced SPD leader Martin Schulz vowed to rebuild his party in the opposition. When Merkel’s coalition talks with two other parties collapsed, however, he yielded to party demands for open-ended negotiations. The SPD will have the last word as the party rank-and-file will vote on any agreement to form a coalition government, so Merkel knows she will need to offer substantial concessions to the SPD. They want greater spending on welfare and infrastructure as well as reform of the two-tier health system.

“In education, health, and old-age care and much more, we are not a modern land,” said Schulz ahead of talks.

But SPD plans to loosen Germany’s fiscal belt – financed by taxes on top earners – are unpopular with the rising CDU conservative camp and their beloved balanced budget. They were also spooked by the 12.6 percent scored by the far-right Alternative für Deutschland (AfD), on foot of security fears linked to the refugee crisis. For that reason, CDU right-wingers see security as the only justification for additional spending.

Pressure on All Sides

The CSU also saw disastrous results in September. Meanwhile, the party has closely watched the rise of conservative Sebastian Kurz in neighboring Austria, who sparked controversy after building a coalition government with the Austrian far-right FPÖ. The Bavarian conservatives have copied many of Kurz’s winning policies, and at their annual new year conference, they began flying political kites: tighter immigration controls and expedited deportations of criminal refugees.

That tone has aggravated the SPD, but the center-left knows not to push back too hard against the predominant law-and-order mood, particularly because some voters believe the government lost control of its security in the 2015-16 refugee crisis.

A tougher nut to crack will be Europe. As former European Parliament president, Martin Schulz has made clear he backs French President Emmanuel Macron’s proposals for reforming the EU, pushing deeper European integration with a eurozone finance minister and budget.

Foreign minister and ex-SPD leader Sigmar Gabriel flouted the interview ban to underline the importance of Macron’s reforms for his party.

“It is time Germany answered this,” he told German television, noting his party had a clear position on pushing forward with European integration. “We think it is right to invest more in the EU – in research, development, and education … The CDU/CSU has been quite reserved to date.”

The limited CDU/CSU enthusiasm stems from concerns that some of these reforms will be seen as a burden on German taxpayers. Since the euro crisis, pretty much every EU proposal is now framed here as a burden on the German taxpayer.

In the coming days, expect to see the SPD press its advantage as Merkel’s last option before the unappealing thought of fresh elections. But also expect spirited resistance from the Bavarian CSU. The party is facing a crucial state election in September, and it can no longer risk appearing soft on immigration to its conservative voters.

This takes us to the greatest question mark: whether the latest coalition talks in Berlin will ever lead to a new government. After nearly 16 weeks, we still don’t know, nor do German voters. According to a poll on Sunday, one in three voters think the current round of talks will fail. And only a narrow majority – 54 percent – think a third grand coalition would be good for Germany. Ambivalence, thy name is Angela.

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© REUTERS/Axel Schmidt

Sitting in a windowless, wood-paneled hall in Berlin’s Social Democratic Party (SPD) headquarters, the newest leader of Germany’s oldest political party has great plans for September.

Half a dozen times in his 50 minute meeting with the foreign press, Martin Schulz lets his dream job title – Chancellor Martin Schulz – escape his lips. German voters go to the polls in September and, bespectacled eyes on the prize, the bearded 61-year-old is using a meeting with the foreign press to outline plans for Germany and Europe that are as grand as his plans for himself.

Though they lack detail now, he has six months to fill in the blanks. And what Schulz lacks in detail he makes up in self-belief, the secret sauce of political power and election victories, the ingredient Germany’s SPD ran out of in 2005. Limping along since then – twice as junior grand coalition partner, once in opposition – the SPD has been a sorry sight. But no more: Schulz, parachuted in from the European Parliament, where he last served as president, is here to turn things around.

And with his party now breathing down the neck of Angela Merkel’s Christian Democratic Union (CDU) in polls, Germany’s political juices are flowing once again.

After twelve years of alternativlos – alternative-less – Merkelian leadership, Schulz is presenting himself as a Merkel alternative with an anti-Trump, yet clearly Trumpian, twist: he is positioning himself as a man running for the forgotten people “who keep the lights on” in Germany. The economy is booming, but the SPD leader wants to tweak the social reforms of recent years to make Germany “fair” again.

While his team works on a political program, Schulz has already flagged two promises that will have consequences far beyond Germany’s borders. First: a plan to prioritize social spending over defense spending.

In a clear snub to US president Donald Trump, who has attacked European NATO members’ defense under-spending as freeloading, Schulz disputed the terms of Germany’s commitment to boost spending to two percent of economic output. At their Cardiff meeting in 2014, NATO leaders signed off on an “aim to move towards the 2 percent guideline within a decade.” But Schulz argues that this “aim” is secondary to the SPD’s twin traditions of social spending and disarmament.

Spending 2 percent of economic output on defense, amounting to “€20 billion or more in the coming years” would, he said, bring a “considerable financial burden” to Germany. “This is certainly not the goal my government would follow,” he said. “What we need is not rearmament but a disarmament spiral, and much more investment in prevention.”

Instead of spending money on a new arms race, he said Germany would be better off investing in its creaking infrastructure, its schools and its welfare system. All have taken a hit in the last years to balance the federal budget and shoulder crisis costs, but SPD strategists sense the mood has shifted – in Germany and in Europe.

Second, on EU policy, the ex-European Parliament president insists he wouldn’t “play the game where everything good is national and everything bad is from Brussels.” Instead, SPD analysis shows there are many voters – particularly younger supporters – shaken by Brexit and Trump’s election and open to the idea of EU politics with a greater emphasis on solidarity.

“A focus not just on stability, but also growth stimulation is necessary in all member states,” he said.

The Same Coin

The mantra of the SPD leader: growth and stability are two sides of the same coin, and neither can be ignored. But EU high-austerity policies of the last years need to be complemented with a new social component.

It’s an argument Schulz inherited from his predecessor as party leader, Sigmar Gabriel. What the SPD has lacked to date, though, is a concrete blueprint for how it plans to deliver this new brand of social politics. In Germany, that would mean challenging the “debt sinner” narrative used during the crisis by Merkel and allies to justify social spending cuts, while sparing banks, in exchange for bailout loans.

If Schulz has a grand strategy on this front, he’s not telling us yet. Instead, he told foreign journalists somewhat cryptically that, with allies struggling everywhere except Germany, social democracy would only survive if it adapted and followed the advice of ex-SPD leader Willy Brandt: “Every era needs its own specific answers.”

Specific answers are also in short supply when it comes to Schulz’s favored coalition partners. His desire to keep his options open has allowed the CDU to claim that a vote for the Schulz SPD is a vote for the Left Party, the successors to East Germany’s communists. Asked if fears over such a taboo-breaking alliance cost the SPD votes in a recent state poll in Saarland, and might do so again in September, Schulz says: “No, I don’t.”

Promising change but so far keeping it vague has given the SPD the kiss of life. And say what you want about Martin Schulz: the man hoping to oust Angela Merkel is not short of confidence. And that, as they say in Germany, is half the job.

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© REUTERS/Ints Kalnins

Sigmar Gabriel, Germany’s foreign minister and a leading Social Democrat, is no stranger to electioneering. And at a meeting of NATO foreign ministers at the end of March in Brussels, he chose to go sharply against US demands for higher defense spending in a move he knew would score points for his party in German elections in September.

“I think it is totally unrealistic to believe that Germany will reach a military budget of more than €70 billion per year,” Gabriel said.

“I don’t know any politician in Germany who believes that this would be attainable in our country, or even desirable. I don’t even know where we would put all the airplane carriers that we would need to buy in order to invest €70 billion in the Bundeswehr.”

With less than six months to go until the federal elections set for September 24, Gabriel was playing up the anti-American and anti-military sentiment in Germany that has been much boosted by US President Donald Trump’s election.

Yet beyond his blunt rhetoric, he has a point: for political as well as for technical reasons, it would be extremely difficult for Germany to boost defense spending to the extent that Washington is calling for.

With a defense budget of €37 billion this year, a respectable 7.9 percent more than 2016, Germany still only spends about 1.2 percent of its GDP on the military. In Europe, only Britain, Poland, Estonia, and Greece reach the NATO goal of spending two percent of GDP on defense.  The alliance had set this goal in 2002 and confirmed it in 2014 after Russia invaded Ukraine.

President Trump, meanwhile, has called NATO into question, calling it “obsolete”, while heavily criticizing Germany and other European countries for not contributing enough to the alliance’s collective capabilities.

“It’s very unfair to the United States,” Trump said at a recent joint press conference with German Chancellor Angela Merkel in Washington. “These nations must pay what they owe – at least two percent.”

Pacifist Streak

With his open protest against Trump’s demands, Gabriel was playing to a German audience that is fiercely critical of the new American administration. Germany’s pacifist streak has been further strengthened by seeing countries like Iraq and Libya sink into chaos and civil war after Western military intervention.

For the Social Democrats, defense spending could become a major campaign theme for the federal elections on September 24. In Martin Schulz – who replaced Gabriel as party leader and candidate for the chancellery – the Social Democrats have a popular leader who has a real chance to threaten Merkel’s reelection.

Merkel herself is very much aware of public opinion. Despite the pressure from Washington, she has avoided any concrete promises beyond a commitment to increase the share of defense spending over the next several years.

Yet even beyond this year’s election campaign, Gabriel may have good reasons to question the two percent goal.

First of all, increasing spending quickly without wasting money would be very difficult. The Bundeswehr may have helicopters and other ancient bits of equipment that urgently need to be replaced, but this is stuff that doesn’t simply come off the shelf.

Weapon design and production take years and demand difficult negotiations with the armaments industry, and thanks to earlier budget cuts, the Bundeswehr’s procurement office is short of specialists. Of course, part of the US pressure may also be due to a desire to have the Germans buy American military equipment, which would be available more quickly.

Then there are political concerns. Were Germany to spend €60 or €70 billion per year on defense, it would become Europe’s foremost military power. On a continent already worried about German hegemony in the EU, this would be certain to fuel tensions.

Double Shock

At the same time, due to the double shock of Trump’s election and Britain leaving the European Union, the EU is rethinking its attitude towards defense.

Europe can no longer afford to waste the colossal amount of money that – despite many promises to the contrary – has been frittered away on too many incompatible and ineffective national armaments systems.

Collectively, Europeans spend about €200 billion per year on defense, compared to about €500 billion in the United States, EU Commission President Jean-Claude Juncker said. Nevertheless, it only reaches about 12 to 15 percent of American efficiency in its spending.

For instance, Europe affords itself the luxury of 154 separate weapons systems, where the United States has 24. “That shows that we are spending our money for defense badly,” Juncker concluded.

So before agreeing to spend more, shouldn’t existing budgets be spent more effectively? The answer is obviously yes, but it is also clear that there has been a complete lack of political will to act on this insight. In order to build an effective European military force, much more pooling and sharing is needed, which will cost jobs in national industries.

Such specialization will also greatly increase EU countries’ mutual dependencies. This means they not only need a credible mutual defense agreement, but must also must find common ground for military interventions in the rest of the world. France and Germany, in particular, have to bridge a huge gap in strategic thinking.

None of this will be possible without an intensive public debate – the kind of debate about NATO, the EU, and defense that Germany’s politicians have long avoided. Chancellor Merkel in particular has preferred to keep the lowest possible profile on military matters while trying to keep Washington reasonably happy.

Yet between Trump and Gabriel, this strategy has clearly reached its limits. If the result is a real debate in Germany about its long-term defense strategy, the new German foreign minister’s knack for electioneering will have served a very useful purpose.

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© REUTERS/Fabrizio Bensch

Germany’s mercurial Sigmar Gabriel has always been good for a surprise. But the political earthquake he triggered on Tuesday, announcing his resignation as Social Democratic Party (SPD) leader, was the best yet.

Gabriel, the burly party chairman since 2009, said he was throwing in the towel to back ex-European Parliament president Martin Schulz as his successor. This being an election year, that makes Schulz the de facto challenger to Chancellor Angela Merkel in the September federal poll.

The announcement by Gabriel, a 57-year-old political veteran and economy minister in the Merkel government, caught even close allies by surprise. They knew an announcement was coming in the next days, but Gabriel tore up his own timetable with the painfully self-critical comment that he viewed himself as more of a liability than an asset to his party.

“If I ran then I would fail and, with me, the SPD,” he said. “The party has to believe in its candidate and gather behind them.”

After mulling his future for six months, Gabriel’s last act was to commission a private poll of SPD members. The result: the 61-year-old Schulz was by far their preference to try and hinder a fourth Merkel term.

Gabriel, in comparison, has long been viewed as an unpredictable figure, as unpopular inside his party as among the wider public. Just 19 percent of voters backed him to challenge Merkel in a public television poll last month, compared to 36 percent for Schulz.

Gabriel isn’t disappearing: he wants to switch from economics to foreign affairs, succeeding Frank-Walter Steinmeier, who will become Germany’s president in the next few weeks. That raises fresh questions about German diplomacy at a delicate time – given tensions with Russia and Donald Trump’s United States – between now and September.

“Bull in a China Shop”

“He’s not a born diplomat, more a bull in a china shop,” said Daniel Friedrich Sturm, a Gabriel biographer. “He’ll push a different style but, with the rise of Trump and the right-wing populism in Europe, everything is being mixed up anyway. It’ll be interesting to see how things develop.”

A protégé of ex-chancellor Gerhard Schröder, Gabriel failed to resolve tensions between the SPD’s leftist and centrist wings and provide resolution to the party’s lingering ambiguous relationship to the Schröder-era economic and social reforms.

An added challenge in the second grand coalition under Merkel: voters’ refusal of voters to reward him for delivering on core campaign promises such as a minimum wage. “Because the numbers didn’t go up, he decided the person most likely to win should run,” said Johannes Kahrs, a leading centrist SPD figure.

The task of reviving – and uniting – the SPD now falls to Schulz, who grew up in a mining family in the western state of North Rhine-Westphalia and has had several stations in his life: bookseller, alcoholic, local mayor, and, since 1994, a member of the European parliament. For the last five years, he was EU Parliament president, boosting the profile of the institution like none of his predecessors.

But apart from being a dyed-in-the-wool European, lifelong Social Democrat, and permanent German talk show guest, nobody knows much about how he will position himself in a domestic political scene in which, until now, he was always an outside observer.

“He has to position himself – on social policy, security policy, all domestic policy – on an ad hoc basis, and in just eight months,” said Volker Kronenburg, a professor for political science at the University of Bonn.

Aware that he has a lot to do in the coming months, Schulz will not, as previously speculated, join Merkel’s cabinet. Rather, he will concentrate on the campaign and the party, which is flat-lining at historic lows of around 20 percent in polls, around 13 points behind Merkel’s Christian Democratic Union (CDU).

Back to the Roots?

In his first remarks, Schulz promised a back-to-the-roots campaign, taking on Merkel, populism, and growing social divisions with classic social democratic politics of social justice. “The SPD has a claim on this theme,” he told party MPs on Wednesday, who greeted him with a standing ovation, hopeful the new arrival can restart the party and reboot its political fortunes after years adrift.

“Many people are turning away from Merkel and are asking what the SPD has on offer,” said deputy leader Manuela Schwesig. “Martin Schulz stands for the European idea and solidarity. I think he can reach people’s hearts because he stands for a new start and has a high level of credibility.”

The biggest question thrown up by Gabriel’s departure and Schulz’s arrival is whether the surprise move makes Merkel’s life more difficult as she seeks re-election next September – and, if so, how.

After three terms, including two grand coalitions with the SPD, no one in her government relishes the thought of a return of the current setup. But there may be no other realistic option, given slumping support for the mainstream parties and the complicated arithmetic resulting from the likely arrival of two more parties in the next Bundestag – the right-wing populist Alternative für Deutschland (AfD) and the returning Liberal Democrats (FDP).

Schulz is the fifth SPD leader to face Merkel in her time at the helm of the CDU and, while he is unlikely to overtake the CDU in polls, he could prove a wild card in Germany’s election campaign.

“He’s never had government power and very little domestic political experience,” said Jürgen Falter, professor for political science at the Johannes Gutenberg University in Mainz. “But he is more of a fighter with the common touch, so Angela Merkel will have to take him seriously as a campaigner.

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