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The Left closing in on the SPD

The hard-line socialist Left party is quickly closing the gap between it and the left-leaning Social Democrats (SPD) as a proposed coalition government between the two in Hesse weighs on the SPD, according to two surveys released Wednesday.

Published: 27 August 2008 12:49 CEST
The Left closing in on the SPD
Andrea Ypsilanti greets the head of the Hesse Left Wednesday Photo: DPA

Fifteen percent of those interviewed for a Forsa study commissioned by Stern magazine and broadcaster RTL would vote for the Left party if elections were held now. That’s the best-ever showing for the new party in the weekly poll.

The SPD has stagnated at 20 percent for weeks while the CDU, which governs the country together with the SPD, remained in the lead with 37 percent.

Former SPD voters have defected in droves to the new Left party after they became disenfranchised with tough labour market reforms introduced under Chancellor Gerhard Schroeder. The Left party encompasses the socialist PDS party popular in former East Germany with an association of far-left voters in western Germany.

Most blame the SPD’s latest woes on the party’s chief in the central state of Hesse, Andrea Ypsilanti. Ypsilanti has said she plans to form a coalition government with the Greens and the tacit approval – but not the participation – of the Left party in the central state. Her plans include cutting deals with the Left to allow her to be elected state premier.

She had promised not to work with the Left as she campaigned for a January election that gave no party a clear majority in the state.

“The risks for the political scenarios in Hesse are inacceptable,” said Finance Minister and SPD vice-chairman Peer Steinbrück in a Stern interview. “She’s putting herself in the hands of a party that would be influential without responsibility, without commitment, that eats away at the ability to govern every week.”

In a second Forsa survey commissioned by Stern and daily Frankfurter Rundschau, 59 percent of voters in Hesse opposed Ypsilanti’s coalition plans and 68 percent were against the agreements that will win her the state premier seat.

Sixty-one percent of those interviewed said they favour new elections to clear up the impasse – something the SPD opposes because they would most likely fare far worse than the 39 percent of votes they won early this year.

ECONOMY

‘Turning point’: Is Germany’s ailing economy on the road to recovery?

The German government slightly increased its 2024 growth forecast Wednesday, saying there were signs Europe's beleaguered top economy was at a "turning point" after battling through a period of weakness.

Published: 24 April 2024 17:53 CEST
'Turning point': Is Germany's ailing economy on the road to recovery?

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.

READ ALSO: Can Germany revive its struggling economy?

“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.”

READ ALSO: Which German companies are planning to cut jobs?

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.

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