• English Site
• >Germany
• >German Politics
• >

  How Merkel Lost Her Mojo: Financial Crisis Exposes German Leader's Weaknesses

How Merkel Lost Her Mojo Financial Crisis Exposes German Leader's Weaknesses

By Roland Nelles and Ralf Neukirch

Part 2: Social Democrats Will Hammer Away at Merkel

The Social Democrats have identified this weakness and are now determined to base a strategy on it. From now on, the party will publicly, and repeatedly, question Merkel's leadership abilities, sometimes directly and sometimes in a more subtle way. Once Merkel is politically damaged, the Social Democrats reckon, the CDU will have little left to offer.

SPD leader Franz Müntefering has established a clear internal strategy. In the coming weeks and months, leading Social Democrats will repeatedly hammer away at Merkel with the same message: That she is a poor leader, that she hesitates and that she is arbitrary. "All I see is someone courting the current Zeitgeist. This Union has plenty of tactics, but no compass," Foreign Minister Steinmeier said at the SPD's convention in Berlin two weekends ago, shortly before being nominated as his party's candidate for the chancellorship.

The Social Democrats' deliberate digs against the chancellor are also becoming more pronounced in less public circles. After Merkel had issued a number of assurances that Germans' savings were safe, SPD parliamentary leader Peter Struck chided her in the coalition committee: "Ms. Merkel, all you have to do is repeat two more times that everything is safe, and people will indeed withdraw all of their money from the banks."

The SPD leadership hopes to take advantage of the financial crisis to attack the chancellor as "neo-liberal," holding up as evidence the CDU's 2003 party convention in Leipzig, as long ago as it was. At the time, the Christian Democrats had established an ambitious reform program for themselves, and Merkel became the darling of the economic liberals. From now on, the Social Democrats will remind voters of Merkel's 2003 position at every turn, despite the fact that she has been successfully shedding this image for some time.

The SPD leadership sees itself as well positioned for the upcoming election battle. It hopes that the banking crisis will once again shine a spotlight on social democratic themes and ideas, such as leveling the playing field between rich and poor, curbing capitalism and strengthening the state. "The time is ripe to shape the country in a social democratic way," the new SPD Chairman Franz Müntefering told his fellow Social Democrats at their convention. Whether or not this is true, it's a good time to claim it.

At the same time, the Social Democrats want voters to believe that the SPD has the more competent politicians in its lineup, men like Steinmeier, Müntefering and Finance Minister Peer Steinbrück, even though Steinbrück has not always seemed effective in managing the current crisis. In the coming weeks, the three men will embark on a deliberate effort to portray the SPD as the more dynamic part of the coalition government. The party leadership already plans to present its answers to the financial crisis at a special conference in Berlin on Monday.

To that end, Steinbrück and a team of experts have developed a plan. Among other things, it calls for financial institutions to be required to achieve a higher equity ratio in the future. It also proposes limiting the influence of ratings agencies and making executives personally more responsible for their faulty speculation. Finally, the Steinbrück plan suggests strengthening state supervision of banks in Europe.

Surprisingly enough, officials at CDU headquarters in the Konrad Adenauer House in Berlin also hope to benefit from the financial crisis. They are firmly convinced that the swing to the left Merkel completed after the election suddenly seems less opportunistic. The hope is that because society as a whole has shifted to the left, Merkel's position is now firmly back in the center.

Officials at the Chancellery also hope that the voters will feel more confidence in the CDU than in the SPD in economically difficult times, despite its lack of effective leaders. In a quarterly SPIEGEL survey, 41 percent of those polled even said that the CDU/CSU is more competent when it comes to financial policy, while only 17 percent felt the same way about the SPD. In difficult times, citizens pay especially close attention to the woman at the top, which brings both opportunities and risks for Merkel. She knows that she will be assigned much of the blame for a prolonged economic crisis. Besides, there is a hard but undeniable core of CDU/CSU supporters who still favor a radical market course, even if it has fallen into heavy disrepute in recent weeks.

For these reasons, there are those who fear that the predictions of a former parliamentary leader, Friedrich Merz, could prove to be correct. Merz warned the CDU/CSU last week against completely obliterating its profile. "If this continues, the next Bundestag election will go horribly wrong once again," Merz said. This, he added, could lead to the "demise of a bourgeois mainstream party."

Translated from the German by Christopher Sultan