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“Schroder has ‘no chance’ in general election.”

This headline in the Financial Times on May 26 summarizes what pundits and pollsters are increasingly concluding about the German national elections in September.  With unemployment at a post-war high of 5.2 million and its business-climate index dropping for the fourth consecutive month, Germany appears poised to turn out two-term Chancellor Gerhard Schroder. 

According to Forsa, one of Germany’s leading polling groups, Schroder’s ruling Social Democratic Party (SPD) scores 28% nationwide against 49% for the duo of the conservative Christian Democratic Union (CDU) and its smaller, Bavarian-based sister party, the Christian Social Union (CSU).  The same survey showed the far-left Greens, Schroder’s partner in government, getting 8%, and the Free Democratic Party (FDP), which almost always goes along with the CDU, with 7%. 

“The CDU is in a state of euphoria right now and its lead will soften, but not enough,” Forsa head Manfred Gullner told FT, concluding, “The SPD has no chance to win this election.” 

Should Schroder be only the second post-war German leader to be ousted at the polls, it is likely that CDU leader Angela Merkel will become not only Germany’s first female chancellor, but, at 51, also the youngest person to hold the office since World War II. 

More dramatically, Merkel, a Protestant pastor’s daughter, would be the first chancellor from the former East Germany, where she spent the first 35 years of her life under a Communist dictatorship. 

Merkel has said, “I have no role model.”  But she is inevitably compared to Britain’s Margaret Thatcher, because, like Thatcher, Merkel offers a right-of-center agenda that includes tax cuts and decentralization of government.  She also appears unafraid to address issues long taboo in German politics, notably stemming the tide of illegal immigration and encouraging the use of nuclear power. 

At recent party conferences, the CDU under Merkel has called for a major cut in Germany’s corporate tax, which is the highest in the world after the U.S. and Japan.  Merkel also proposes a complete overhaul of the nation’s costly healthcare system, including a flat-rate health premium to replace the current income-related insurance payments.  (Predictably, this has led to charges from Schroder’s SDP that rich and poor would pay the same premium.)

In a country where years of sweetheart agreements with unions have made it very difficult for employers to fire anyone, Merkel supports ending national collective bargaining deals and replacing them with localized agreements. 

In contrast to Schroder, Merkel has been vocal in opposing Turkey’s bid to join the European Union.  “Inviting Turkey to become a candidate for European Union membership was a mistake,” she said.  “There are differences of values.  We do not have the same understanding of human rights.  Try opening a Christian church in Istanbul.” 

In a country with a long history of liberal immigration policies, Merkel says it is time for tighter restrictions. 

Merkel also supports better efforts at assimilating immigrants.  “The notion of multiculturalism has failed,” she told an interviewer.  “Anyone coming here must respect our constitution and tolerate our Western and Christian roots.” 

In 2002, Schroder and his party won in a photo finish after a campaign based in large part on U.S.-bashing and opposing the war in Iraq.  Schroder is now badly trailing an opposition party led by one of the few German politicians who supported the U.S. on Iraq.  With a “Chancellor Merkel,” Germany may well, Thatcher-style, move closer to the U.S. at the same time it is moving toward a more free-market society.