POLITICS-GERMANY: Rediscovering Social Democratic Values

By IPS Correspondents Reprint | | Print |

Analysis - Yojana Sharma

BERLIN, Dec 10 1999 (IPS) - Whether German chancellor Gerhard Schroeder’s turn to his Social Democratic Party’s left flank is merely a tactical ruse or a statement of policy, it is plain that he joined the club of political leaders who intend to give politics a greater role in shaping the globalisation process.

Schroeder emerged strengthened from a three-day congress of his ruling Social Democrat party (SDP) after months of intra-party bickering over his attempts to steer a “new centre” (Neue Mitte), poor showing in opinion polls and electoral setbacks.

Schroeder’s opening speech to the party congress criticised capitalistic globalisation, insisting policy should not be dictated by “speculators and financial acrobats”. He also said he was determined to intervene in the economy to save jobs where necessary.

The SDP annual party congress was seen as Schroeder’s last chance to win back the alienated left-wing of his party and reassert himself as party leader.

In Berlin Schroeder was reelected as party chairman with a greater share of the vote than in April when he replaced former finance minister Oskar Lafontaine who resigned suddenly early this year over differences with the Chancellor over his “middle way” in German politics.

A visibly chuffed Chancellor told party delegates Tuesday “I really hadn’t expected such a pleasing result”, after he won 86 per cent of the vote, compared to 76 per cent at a special party conference in April.

In the run up to the party congress the Chancellor’s political authority had been weakened by six humiliating defeats for the SPD in state elections and his attempts to push through an economic austerity package which made the party deeply unpopular with the electorate and the party’s left flank.

Lafontaine had twisted the knife, putting the blame for the party’s abysmal performance saying recently “of course we could have prevented these electoral defeats if we had continued the policies that we set out with at the beginning of the year.”

He was referring to the traditional SDP policies of a strong welfare state which the party’s left wing is seeking to protect against Schroeder’s “new middle” way modelled on the centrist policies of Britain’s Labour party under prime minister Tony Blair rather than the French policies that Lafontaine and other SDP old guard favour.

Schroeder even invited French Socialist prime minister Lionel Jospin to address the congress, having reiterated his party’s ideological links with the French socialists, just as Lafontaine did in the past. Blair was not invited – a tactical move seen as removing the red rag to the left- wing bull.

Schroeder’s aim was to reverse his deep unpopularity with the electorate and his party’s old guard. The first months of Schroeder’s chancellorship, which overturned 16 years of conservative Christian Democrat rule in September 1998, were seen as lacking in direction.

Schroeder’s attempts to steer a “new middle” course were derided as a “new muddle”.

In the German parliament the Bundestag in September opposition leader Wolfgang Shaeuble (CDU) thundered; “you’re barely a year in office and all the trust is gone. Your own supporters are horrified. There is no consistent line. Only zigzagging and hot air.”

His words were not seen as political point-scoring, but statement of fact after weeks of humiliating electoral defeats for the SPD.

On September 5, in state elections in Saarland, the SPD lost the majority it had enjoyed for 14 years. On the same day it was defeated in the eastern state of Brandenburg.

In municipal elections in North Rhine-Westfalia the same month, the results were equally depressing. SPD bastions such as Dortmund which it had ruled for 53 years and Cologne, which it had controlled for four decades, fell to the conservatives.

In the state elections in Thuringia and Saxony that month, the gloom deepened at SPD headquarters as the conservatives increased their majority and the former communist Party of Democratic Socialism pushed the Schroeder’s party into third place.

The reason for the SPD’s drubbing was clear – Schroeder’s focus on financial austerity, particularly reform of welfare and pensions which was seen as a betrayal of traditional SPD values of social justice.

Disaffected SDP voters which brought Schroeder to power nationally were turning to the ex-communists who promised higher welfare spending. There was even dark talk within the party left flank of ditching Schroeder as party leader in favour of Defence minister Rudolf Scharping.

Political analysts saw the party congress this week as Schroeder’s last ditch attempt to woo back the SPD traditionalists.

A series of die-hard socialist interventions in the weeks leading up to the congress, as well as the fateful eclipsing of the conservative opposition by a party- funding scandal surrounding former chancellor Helmut Kohl conspired to present Schroeder again as clean and socialist to the party faithful.

In the weeks before the congress the Chancellor horrified adherents to the “New Centre” and big business whom he had tried to woo with his “Neue Mitte” pronouncements, by agreeing to a bailout of the country’s second largest construction firm, Philipp Holzman whose imminent collapse threatened some 30,000 jobs.

“Politicians have a responsibility to avert fundamental crises in society,” he told the congress. But the markets were unimpressed.

“All I want to say about the recent intervention in Germany is that it does not enhance the image that we want to have of being an increasingly market-driven economy across the euro area,” said Wim Duisenberg, the Dutch president of the European Central Bank.

Analysts blamed Schroeder’s intervention for the sell-off and subsequent weakening of the euro currency.

Schroeder also spoke out in support of the German company Mannesmann which is facing a hostile takeover bid from Britain’s Vodaphone Airtouch – this was also seen as the Chancellor’s support for German jobs in the face of “globalisation” and gained him more kudos with the party’s left.

Nevertheless, Schroeder was still able to execute a perfect backflip just minutes later by insisting on economic reform including a cap on pensions and the austerity package and reaffirming the “Neue Mitte” as a modernising force.

A day later he used his new-found popularity with the left wing and pleasing majority which returned him as party leader to appeal to the left not to endanger the party’s unity by demanding “impossible measures” such as reintroducing the wealth tax.

The tax was rejected by the party at the congress this week – a clear and visible victory for Schroeder.

Said one analyst “even if he decides to go back (to his old policies) his behaviour at the party conference has shown that, whatever he does, he cannot at least ignore the party left wing as he did in the past.”