Gerhard Schroeder was at it again. "Take the military options off the table," he roared at a campaign rally in Hannover. "We've all seen they're no good!"
Bashing George W. Bush worked the last time the German chancellor was locked in an uphill election battle, in 2002 on the eve of the Iraq war. So he was understandably tempted to try it again, this time hoping to ride to victory in next month's ballot by denouncing possible U.S. military action in Iran. And like last time, the salvo appeared to catch his opponent, now Angela Merkel, off guard. More than 80 percent of Germans support Schroeder's antiwar stance, she knew, and reject her own pro-U.S. foreign policy. What to do? Waffle, obviously. A spokesman lashed out at Schroeder and called for unity with Washington, while Merkel herself said she agreed with Schroeder.
This election should have been a slam dunk for Merkel. Her opponent, after all, presides over record 12 percent unemployment, five straight years of close-to-zero economic growth and an epidemic of angst over Germany's prospects. Even some of his own cabinet ministers treat the chancellor like a lame duck, openly speculating about political alliances in a post-Schroeder era. By rights, these should be ideal circumstances for any opposition. Why, then, are Merkel and her Christian Democrats in such disarray?
Amid intramural bickering, the party has seen its once resounding majority in the polls continue to melt away, down from a 20-point margin in June to just 12 today (42 percent for the CDU to the SPD's 30 percent). Meanwhile, in Germany's depressed east, the CDU is running neck and neck with the Linkspartei, a new anti-establishment protest group that's grown out of the old East German communists and now speaks for 10 percent of the nation's voters. That arithmetic makes it practically impossible for Schroeder to come out on top. But it also puts the odds near even that Merkel will fail to get her own majority and be forced to rule in a paralyzing "grand coalition" with Schroeder's dysfunctional SPD.
Merkel hasn't helped her chances. Early on, she seemed poorly prepared, twice in interviews confusing net and gross wages--a trifle, perhaps, but bad for a candidate running on her claim to mastery of economic issues. An uncharismatic speaker on the stump, Merkel's refusal to agree to more than one TV debate with the telegenic Schroeder has been widely interpreted as an admission of weakness. Merkel, who has never campaigned for more than a Bundestag seat, has steadied in recent weeks and seems more at ease. Because she's so widely perceived as less media-savvy than Schroeder, she may even score a surprise victory in the Sept. 4 debate.
So far, however, "Merkel has not convinced Germans she can do any better than Schroeder," says Thomas Petersen of the Allensbach polling institute. It doesn't help that the election platform Merkel unveiled in late July, trumpeted as a grand "Change of Politics," turned out to be disappointingly weak."It goes in the right direction, but many of the specifics are minor and vague," says economist Michael Burda of Berlin's Humboldt University. Its most controversial plank is a 2 percent cut in payroll taxes--dutifully "refinanced" by a matching increase in the sales tax--instead of the bold cuts in state expenditures that experts such as Burda call for. The strict worker protections that make German companies loath to hire would be relaxed--but only for companies employing fewer than 20 workers. In a recent interview, Merkel insisted she, too, rejects capitalism in favor of Germany's tried-and-true "social market economy." Some of this, surely, is part of the political give-and-take required to gain power in Germany. Too much talk of reform would likely scare off Germany's disillusioned voters. On the other hand, Merkel came to power in her party by promising the fundamental economic changes required to get Germany growing again. With all her current to-ing and fro-ing, it takes an act of faith to believe she still clings to those principles.
Still, the real fault seems to lie with her party, and less with Merkel herself. The head of the CDU's querulous Bavarian sister party, the Christian Social Union, is Edmund Stoiber, who just barely lost to Schroeder in 2002. Thundering against "frustrated" East Germans and their appetite for expensive state subsidies, he risks alienating a key segment of the electorate while playing to his home audience back in Bavaria. Meanwhile, a pair of powerful CDU state governors, whose own ambitions for the candidacy were thwarted by Merkel's rise, have stood back from her campaign, creating the impression that she lacks the allies needed to govern in Germany's complex federal system of regional checks and balances.
If Merkel has reason to be suspicious of her party, the party also seems to be suspicious of her. As an outsider from the East, who joined the party only in 1990, she lacks what Germans call the "barn smell" of a deeply traditional, apparatchik-dominated CDU. Merkel's pronouncements that Germany needs profound change also rub much of the CDU the wrong way. Many of the rank and file are as wedded as Social Democrats are to the idea of Father State's taking care of all their needs. Stoiber's CSU, especially, is often to the left even of the socialists on many issues--and played a key role in watering down Merkel's pro-reform campaign platform. "They have the welfare state in their bones just like everyone else," says Warnfried Dettling, a former CDU speechwriter and strategist.
If Merkel is elected, the biggest question is thus whether her party will follow her. Her strength is that, as an East German, she retains an outsider's critical eye for tradition. But in this, she may be out of step not only with her own party but with the German people. It's an open question whether she will have the nerve to tell Germans the truth they absolutely do not want to hear: that their venerated "social market economy," stuck halfway between socialism and capitalism, no longer works and that it might be time to try something new. And if she does do so, it's even less clear who within her party would stand by her. Unlike other reform parties--say, Britain's Tories before Thatcher, or Reagan-era Republicans--the CDU seems utterly devoid of maverick, neukonservative thinkers defining a new, post-welfare-state political culture for Germany. The future of German reform, it seems, now hinges on the political will and skills of one woman and a small circle of intimates.
And so the mixed signals go on. Last Wednesday, Merkel presented her long-awaited shadow cabinet, including a highly respected radical flat-taxer for Finance minister, increasing the likelihood of finally reforming what the OECD describes as the world's most complex and inefficient tax system. Her candidate for the Labor Ministry, however, is a market skeptic best known for his recent call to reinstate the protectionist crafts guilds that even the socialists have abandoned.
There are still three weeks to go in the campaign, and Merkel may yet find her stride. Certainly it would be wrong to write her off. Odds are that she will become chancellor next month, whatever the coalition. But make no mistake: that's when the real contest begins.