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ELECTION

Schulz sets out his plan to challenge Merkel

Martin Schulz on Sunday officially becomes Chancellor Angela Merkel's chief challenger in Germany's September general election and will lay out his plans for unseating the world's most powerful woman.

Schulz sets out his plan to challenge Merkel
Martin Schulz. Photo: DPA

The bearded Social Democrat, already credited with giving his ailing party a strong shot in the arm, will be anointed SPD leader and standard bearer at a one-day congress in Berlin.

German media predicted he could garner more than 90 percent of the vote from the country's oldest political party.

In a speech to the SPD rank and file, Schulz will attempt to harness his momentum against Merkel, whose conservatives just a few months ago had an apparently invincible lead in the polls. Speaking on Saturday, Schulz said he hoped to win a vote of confidence with the backing of “a large majority” of party faithful.

His decision to leave the European Parliament, which he headed for five years, and run to lead Germany has given the Social Democrats a new lease of life since party leader Sigmar Gabriel asked him to take the reins in January.

“It's been encouraging to see in the last few weeks that people are hopeful again that the Social Democrats have a shot,” Schulz told Berlin public radio RBB this week.

“My intention to pursue policies that make the lives of hard-working people a little better is apparently finding a lot of support.”

Opinion surveys have recorded a 10-point jump for the SPD in recent weeks and some polls put it ahead of the conservative bloc of Merkel, who is trying to win a fourth term.

The congress will fire the starting gun for the national election campaign and the race for three state polls, the first of which will be held in Saarland on the French border on March 26th.

Fired-up fans

Ahead of the congress, Schulz won a nod of support from EU Commission chief Jean-Claude Juncker who, despite his centre-right stance, has had a somewhat tense relationship with Merkel.

“Both Martin Schulz and Angela Merkel have the qualities to be chancellor,” he told Bild newspaper on Sunday.

The Social Democrats, junior partners in Merkel governments for nearly eight of the last 12 years, long withered in Merkel's shadow.

But Gabriel, now Germany's foreign minister, told supporters this month that Schulz's entry into the race as a Berlin outsider appealed to many SPD voters who are tired of the “grand coalition”.

“He embodies the feeling of Social Democracy, in his head and above all in his heart,” Gabriel said.

For his part Schulz, 61, attributes his surge to a sharpened focus on their classic bread-and-butter issues including wealth redistribution, free education and gender equality.

He has in the process become something of a social media phenomenon, inspiring a raft of affectionate hashtags and viral videos among his fired-up fans.

Heal the divisions

Schulz's unique life history – he wanted to be a professional footballer, didn't finish high school, beat alcoholism before opening a bookstore and taught himself five languages – gives him a common touch.

He has faced attacks by conservatives that he has adopted a “populist” tone but he dismisses the charges as elitism.

“I speak in a way so you can tell me apart from my rivals, and I try to make complex ideas understandable for my audience,” he insists.

Party members are hopeful Schulz can help heal the divisions stemming from a programme of labour market reforms known as Agenda 2010 and passed by the last SPD chancellor, Gerhard Schroeder, who lost to Merkel in 2005.

The unpopular measures were successful in driving down unemployment but also a key factor in the party's bitter and lasting gulf between centrists and leftists.

Schulz, stressing his humble roots, has pledged to soften some of its key planks, including lengthening the period of time the jobless are entitled to full benefits.

Meanwhile Merkel, a frequent winner of Forbes magazine's most-powerful woman ranking, said she was not troubled about the wind in the SPD's sails, noting that there had always been potential in its “very meagre poll ratings”.

“Competition enlivens things,” she told Friday's Saarbruecker Zeitung.

By Deborah Cole

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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.

'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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