GERMANY’S GENERAL election season kicked off yesterday when Peer Steinbrück, the Social Democrat (SPD) former finance minister, announced his challenge to unseat German chancellor Angela Merkel.
Mr Steinbrück’s official nomination will follow on Monday, promising a lively 12 months in the otherwise sedate world of German politics. The 65-year-old Hamburg native, known for his quick wits, motor mouth and prickly personality, could not be more different from the cautious Dr Merkel, a Christian Democrat (CDU).
Viewed as an SPD centrist, Mr Steinbrück vowed yesterday to restore a “social equilibrium” to Germany’s domestic and European politics. His intention: to placate SPD suspicious left-wingers and steal back centrist, middle-class voters from the ruling CDU.
The Merkel-Steinbrück duel promises to be interesting as they learned each other’s strengths and weaknesses when working together in the 2005-2009 grand coalition.
Days after the Republic announced its bank guarantee scheme in September 2008 it was Dr Merkel and Mr Steinbrück who, wearing stricken expressions, appeared on TV to assure Germans that their savings, too, were safe.
As finance minister Mr Steinbrück had many dealings with the Republic, mostly involving the rescue of German-owned banks operating in the IFSC. He sees a link between their misadventures and the State’s low corporate tax rate. In June he described the tax rate as an “unacceptable” source of “ruinous and unfair competition” that should be tackled.
Mr Steinbrück’s chances of election success in Germany depend largely on how he positions himself both to a wider public and SPD members. He is one of the few leading party figures not to have disowned unpopular Gerhard Schröder-era reforms or Blair-Schröder third-way politics. Aware that this raises the hackles of the resurgent SPD left wing, he promised recently to make fairer euro zone reform a cornerstone of his campaign.
This week he unveiled a proposal to force banks to finance their own €200 billion bailout fund, shifting from taxpayers to financial institutions the cost and risk of a future collapse.
It remains to be seen if his campaign will be enough to unseat Dr Merkel who, coming to the end of her second term, still enjoys two-thirds popularity in polls. Her SPD challenger has been one of her loudest critics in the euro zone crisis, accusing her of irritating markets and annoying European partners by “turning many pirouettes and performing many about-faces”.
A Stern magazine poll has put just four points between the CDU-led coalition and an SPD-Green alternative. But another CDU-SPD grand coalition could be the only option with a parliamentary majority.
Yesterday Mr Steinbrück insisted he wanted a complete change. “I accept the challenge to replace this government – not just partially – but to replace it completely with an SPD-Green government,” he said.
