The High Price Of Victory

Germans glued to their TV sets Sunday night called it a political thriller: the tightest election cliffhanger in their nation's history. When votes were counted in the early hours of the morning, incumbent Chancellor Gerhard Schroder had managed--just--to cling to power.

His party, the left-wing Social Democrats, came out ahead by a minuscule 9,000 votes over the conservatives led by the challenger, Bavaria's governor Edmund Stoiber. With each party getting 38.5 percent of the vote, it was only the surprisingly robust showing of Schroder's coalition partner, the environmentalist Green Party, that will give him an 11-seat majority in Germany's parliament, the Bundestag.

But another four years of Schroder may turn out costly for Germany. First, relations with the country's allies have seldom been more chilly. With Germany's economy tanking and his party trailing in the polls, Schroder this summer picked a fight with U.S. President George W. Bush and much of the rest of Europe to bolster his standing at home. Playing on Germans' almost religious fear of war, he ruled out any German support for military action against Iraq--even under a U.N. mandate. The sudden move worked at home: 74 percent of Germans agree with him, and the Social Democrats surged in the polls. But abroad, it leaves Germany isolated. Schroder didn't just anger Washington. Though much of Europe shares his concerns that war with Iraq could create more problems than it solves, Schroder's defiant stance sabotaged the chance of any common EU position on Iraq. Several European leaders, including France's Jacques Chirac and Spain's Jose Maria Azner, made it clear that they wanted Schroder to lose--an unprecedented move in an ally's election campaign.

Schroder's campaign also had a distasteful undercurrent of anti-Americanism, crowned by his justice minister's reported remark last week that likened Bush's policy on Iraq with the methods of Adolf Hitler. The mood is so frosty that both Condoleezza Rice and Donald Rumsfeld this weekend called America's relations with Germany "poisoned." Not since World War II has Germany's government been this isolated on a major international issue, and seldom has its chancellor been so thoroughly disliked abroad. With a new leadership under Stoiber, fixing Germany's soured relations would have been much easier than it will be now.

Now Schroder has to pick up the pieces. He began quickly, announcing today that the controversial justice minister, Herta Daubler-Gmelin, will lose her job in the new government. His spin doctors have been busy playing down their boss's shrill rhetoric: it was all campaign tactics, they say, and now that it's over Schroder will find a way to mend broken ties. Meanwhile, Joschka Fischer, the popular Green foreign minister, already struck a new chord on relations with Washington, reminding Germans of the importance of their country's friendship with America. Iraq may also be less an issue than meets the eye--it's highly unlikely Washington would ever ask Germany's ill-equipped military to join the fight, anyway. And so far, Germany has been one of America's staunchest supporters in the war on terror. Still, Schroder insists he won't budge from his position on German involvement in Iraq. "We have nothing to change from what we said before the election," he told reporters.

The last thing Germany needs is trouble with its allies. The country has much more important problems to deal with: what was once Europe's most dynamic economy is now one of its worst economic laggards. Unemployment, at 9 percent, is close to a record high, and the country trails the rest of Europe in both GDP growth and job creation. Instead of deregulating an economy overburdened by bureaucracy and high taxes, over the past four years Schroder has gone into the opposite direction, expanding job-killing labor market regulations and welfare spending even more. While no reformer, Stoiber at least ran on a marginally more business-friendly platform, and had promised to undo the worst of Schroder's policies. Blasting out at Bush worked remarkably well in distracting from Schroder's miserable record on the economy. But it won't get Germans back to work.

Despite the campaign's often shrill talk, the really nasty rhetoric didn't get very far. Even if Schroder scored points among pacifist Germans with his strict anti-war stance, many voters clearly didn't feel comfortable with his campaign's anti-American undertone. The justice minister's shocking Bush-Hitler comparison--a comment she later claimed had been misreported--helped melt away the lead the Social Democrats' still had last week. The communists, running on a hardline soak-the-rich and anti-war platform, were booted out of parliament, and other fringe parties of the left and right hardly got any votes at all. The pro-business Free Democrats scared away a lot of middle-of-the-road voters when deputy leader Jurgen Mollemann--forced to step down on Monday--began railing against Israel and prominent members of Germany's Jewish community. Demagoguery, in this election, didn't pay. At least that was one piece of good news for Germans and their neighbors.

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