German Opposition Lambastes Scholz in Election Broadside
(Bloomberg) -- German conservative leader Friedrich Merz launched his election bid with a stinging attack on Chancellor Olaf Scholz, calling the Social Democrat a “lightweight” and accusing him of sowing division in Europe’s biggest economy.
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Merz, who heads the center-right CDU/CSU alliance, delivered a robust speech in the lower house of parliament in Berlin Wednesday moments after Scholz had made his own statement setting out his case for reelection ahead of the Feb. 23 snap vote.
Scholz confirmed the timeline for the national ballot, which is being brought forward from September after he dismantled his ruling coalition with the Greens and the Free Democrats last week. After a prolonged spat over borrowing rules, he sacked Christian Lindner, the fiscally hawkish FDP finance minister, depriving his government of a parliamentary majority.
“This is about whether we move forward strongly like our partners worldwide, investing in the future and holding our country together — or whether we play one against the other at the cost of our future, at the cost of our unity,” Scholz told a rowdy Bundestag chamber.
His message to voters was that Germany must invest more in its security and continue its support for Ukraine but not at the expense of pensions and social benefits. Neglecting those, he warned, could help drive support for “populists and extremists” and risked “tearing our country apart.”
Merz, whose conservative group has a big lead in opinion polls, fired back, accusing Scholz of being responsible for polarization in Germany and calling his tactics in ending the ruling coalition “simply unworthy of a chancellor.”
“You obviously live in your own cosmos, in your own world,” Merz said. “You have not understood what is happening out there in the country at the moment.”
He also ridiculed Scholz’s relationship with Donald Trump. “Don’t think you have any authority to talk to this new president,” Merz said. “He will drop you like a lightweight.”
Scholz initially wanted the election to be brought forward to March to give his minority government more time to seek parliamentary approval for a number of outstanding bills.
After coming under pressure from the Greens, opposition parties and industry lobbies, among others, he agreed to submit to a confidence vote on Dec. 16 that will pave the way for the election.
The political turmoil in Berlin comes with Germany mired in a prolonged period of stagnation and its manufacturers, including the key car sector, are struggling with waning global demand and facing disruptive transformations.
Germany’s economy will hardly grow next year, as underlying problems add to cyclical weakness, Scholz’s independent panel of advisers warned in a report published Wednesday.
Scholz ended his governing alliance on the same day that Donald Trump declared victory in the US election. The president-elect has raised doubts about further military support for Ukraine and stoked fears about a damaging trade war with China and Europe.
Opinion polls show Merz’s alliance is leading with more than 30%, putting it in a strong position to win back the chancellery after it lost narrowly to Scholz’s SPD party three years ago. Backing for the SPD is at about 16% in third place, behind the far-right Alternative for Germany.
The Greens are at about 11% in fourth, while a new far-left party — the Alliance Sahra Wagenknecht — is fifth with roughly 8%.
The FDP is polling as low as 3%, down from 11.5% in the 2021 election, putting it in danger of missing the 5% threshold for getting into parliament.
Lindner, the FDP chairman, joined Merz in laying into Scholz in the Bundestag on Wednesday, saying the coalition was doomed because of vastly different assessments of the challenges facing the country.
“The Scholz government collapsed because we in the cabinet were no longer talking about the same country,” Lindner said.
Foreign Minister Annalena Baerbock, whose Greens colleague Robert Habeck is the party’s chancellor candidate, echoed Scholz in calling for unity as a bulwark against extremism. Habeck was unable to attend Wednesday’s debate as he was stuck in Lisbon due to a technical fault with the government aircraft.
“Incidentally, that’s what we call teamwork,” she told lawmakers. “The next weeks and months are about securing peace in Europe.”
Coalition negotiations in Germany typically take several months which means that the next government may not be in place before April at the earliest.
What Bloomberg Economics Says...
“While the short-term impact of a power vacuum should not be overstated, the absence of a mandate to govern will also constrain Germany’s ability to respond to unfolding events, like the restoration of President-elect Donald Trump to the White House.”
—Martin Ademmer, Antonio Barroso and Jamie Rush, economists. For full note, click here
As things stand, a CDU/CSU-led “grand coalition” with the Social Democrats looks the likeliest outcome, with possibly the Greens as a junior partner.
Bundesbank President Joachim Nagel added his voice to calls for a stable government in Berlin ready to tackle Germany’s numerous challenges.
“Companies, private households and the financial markets want reliability, especially when it comes to longer-term investment decisions,” Nagel was quoted as saying in an interview with Die Zeit newspaper published Wednesday.
“A clear message is important,” he added. “Politics must face its tasks, it must create trust and a reliable framework.”
--With assistance from Patrick Donahue and Jenni Thier.
(Updates with additional quotes starting in fifth paragraph.)
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