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Merkel’s conservatives fail to reach deal on who will be chancellor candidate

Two conservative leaders locked in battle for Angela Merkel's crown failed to reach a deal by their self-imposed deadline, pushing the chancellor's CDU-CSU alliance deeper into crisis Monday months before elections.

Published: 19 April 2021 08:42 CEST

Merkel's conservatives fail to reach deal on who will be chancellor candidate

Armin Laschet and Markus Söder on April 11th. Photo: DPA

Armin Laschet, the chief of Merkel’s CDU party, and Markus Söder, the leader of Bavaria sister party CSU, have been in a scrum for a week over who will lead the conservatives into elections in September.

The rivals had earlier said an agreement would be found by the end of the week but party sources told AFP Sunday that a deal was still out of reach with closed-door negotiations between both men ongoing.

Söder and Laschet flew in on Sunday night to Berlin for talks, German media reported.

As head of the Christian Democratic Union, Merkel loyalist Laschet would normally be the obvious choice for the alliance’s chancellor candidate nomination.

But with support for the parties plumbing new lows amid anger over Germany’s pandemic management, the more popular Söder has put up a formidable challenge against Laschet.

Söder, who declared his bid for the job last Sunday, had then said he would step aside “without resentment” if larger party CDU was to decide for his rival Laschet.

But even after the CDU’s leadership came out a day later in support for Laschet, Soeder refused to back down. Instead, the 54-year-old cited popularity ratings as he dug in his heels.

A recent poll by public broadcaster ARD showed 44 percent of Germans in favour of Söder as most qualified as the CDU-CSU’s chancellor candidate. Laschet only had 15 percent of support.

The infighting has thrown the conservatives into disarray as Merkel is about to bow out after 16 years in power.

It has also sapped energy at a time when Germany is struggling to put down a raging third wave of the coronavirus pandemic that has already claimed almost 80,000 lives in Europe’s biggest economy.

‘Backroom deal’

With no agreement in sight, conservatives up and down the country were calling emergency meetings to thrash out who to support.

The alliance’s youth organisation Junge Union on Sunday voted to back Söder, with 14 out of 18 of its chapters in favour of the Bavarian.

“Both candidates have had enough time to come to a decision. That didn’t happen, so we see ourselves forced to position ourselves,” said Junge Union chief Tilman Kuban.

Meanwhile, some MPs supporting Söder had been collecting signatures to force a vote of the CDU-CSU parliamentary group when they meet on Tuesday.

Party heavyweight Wolfgang Schäuble has hit out against Soeder for undermining the CDU leadership’s endorsement of Laschet as “only a backroom deal”.

The conservative alliance would struggle in the elections without a strong CDU, warned the former finance minister who is also currently speaker of the house.

Yet others were starting to shift in favour of Söder.

The state premiers of Saarland and Saxony-Anhalt have both indirectly said that Söder should not be written off.

“It is completely clear that the question of with whom one will have the better chance at the elections must play a central role,” said Saarland’s leader Tobias Hans.

By Hui Min NEO

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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.