Merkel failing to lead, Social Democrats say

German Chancellor Angela Merkel’s coalition partners on Sunday accused her of a lack of leadership as internal tensions mount steadily ahead of national elections in 2009.

Published: 2 June 2008 07:37 CEST

Merkel failing to lead, Social Democrats say

Merkel at a UN conference in Bonn last week. Photo:DPA

“The chancellor is not really present on the domestic front,” the Social Democrats’ parliamentary leader, Peter Struck, told Deutschlandfunk radio.

“She does not lead, she does not step in,” added Struck. Struck and Environment Minister Sigmar Gabriel, also a Social Democrat, accused Merkel of portraying herself as a leader in the fight against climate change but allowing her Christian Democrats (CDU/CSU) to hinder progress in that regard.

“She often makes strong statements at press conferences but does little to stop her own party blocking progress,” said Struck. Gabriel added: “It cannot be that the chancellor cultivates an image as a champion of the environment but in reality the Christian Democrats block everything.”

The secretary general of Merkel’s party, Ronald Pofalla, dismissed the criticism as an attempt by the Social Democrats to deflect attention from their own woes.

Germany’s two biggest parties have governed in a power-sharing coalition since 2005 but strife between the partners are increasingly spilling into the open as they prepare to contest next year’s election.

The situation deteriorated last week when the SPD nominated prominent academic Gesine Schwan to challenge conservative President Horst Köhler for the largely ceremonial post in 2009.

The move drew a sharp rebuke from Merkel, who had shortly before termed her party’s relationship with the Social Democrats as “very, very difficult.”

“We have a president who is respected around the world,” Merkel said. “So it is regrettable that the Social Democrats have put up their own candidate in this step that can only be explained by the internal state of the party.”

German commentators have warned that the Social Democrats’ nomination of Schwan was seen by their partners as a provocation and that it has set the stage for a protracted, acrimonious election campaign. The Social Democrats are hampered by disarray in their own ranks and have hit their lowest poll ratings in two and half years.

The closely watched Politbarometer poll released Friday showed that only 21 percent of registered voters would be willing to cast their ballots for the party in September next year.

The CDU/CSU drew 42 percent of potential voters, up from 38 percent where they had hovered for months.

Output is expected to expand 0.3 percent this year, the economy ministry said, up from a prediction of 0.2 percent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a “turning point”.

“Signs of an economic upturn have increased significantly, especially in recent weeks,” Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 percent, from a previous prediction of 2.8 percent, and sees the figure falling below two percent next year.

“The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money,” said Habeck.

“So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery.”

Energy prices — which surged after Russia’s 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above one percent, but these were dialled back at the start of the year as the economy continued to languish.

‘Germany has fallen behind’

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers’ index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

German Economics Minister Robert Habeck

Economics Minister Robert Habeck (Greens) presents the latest economic forecasts at a press conference in Berlin on Wednesday, April 24th. Photo: picture alliance/dpa | Michael Kappeler

Despite the economy’s improving prospects, growth of 0.3 percent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

“Germany has fallen behind other countries in terms of competitiveness,” he said. “We still have a lot to do — we have to roll up our sleeves.”

Already facing turbulence from pandemic-related supply chain woes, the German economy’s problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country’s crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, “tight monetary policy has not yet been lifted.”

In addition, disagreements in Chancellor Olaf Scholz’s three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP party, a coalition partner, faced an angry backlash from Scholz’s SPD when it presented a 12-point plan for an “economic turnaround”, including deep cuts to state benefits.

Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of “stabilisation” in the economic forecasts but stressed that projected medium-term growth was “too low to sustainably finance our state”.

“There are no arguments for postponing the economic turnaround,” he added.