German SPD Gives Merkel a Reprieve But Signals Tough Talks Ahead

Birgit Jennen
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German SPD Gives Merkel a Reprieve But Signals Tough Talks Ahead

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The new leaders of Germany’s Social Democratic Party signaled a readiness to stick with Chancellor Angela Merkel’s government but pledged a tough stance in defending a list of fresh demands.

Saskia Esken and Norbert Walter-Borjans, a pair of outspoken government critics and Berlin outsiders, were confirmed as party leaders during a convention in Berlin on Friday. They had won a leadership contest last weekend against a tandem led by coalition loyalist Olaf Scholz, Merkel’s finance minister and vice chancellor.

Their unexpected victory threw the future of Merkel’s rule into doubt. But they subsequently softened their stance and put forward a list of legislative proposals that was approved by the convention late on Friday. The motion sets out conditions for the party to remain in government, including an increase in the minimum wage, additional investments, and tougher action on climate change.

“I was and I remain skeptical about the coalition,” Esken told delegates. “We are giving the coalition a chance to continue. Nothing more and nothing less, however long it may last.”

In a speech aimed at her own leftist constituents, Esken made demands that went beyond what the party leadership had agreed the day before, saying that a 12 euro ($13) minimum wage is the minimum the SPD should strive for and that “massive” investments are required.

Official SPD Wish List

Walter-Borjans and Esken both adopted a tough tone that could herald difficult negotiations, questioning Merkel’s commitment to a balanced budget and mocking calls for increased defense spending by the leader of her Christian Democratic Party.

Germany needs a development and investment program, at least 10 years long and worth an additional 45 billion euros ($50 billion) per year, Walter-Borjans said. “If the black zero and the break on debt stand in the way of a better future for our children, then it must go,” he said in reference to Germany’s zero-deficit spending policy.

A former finance minister from North-Rhine Westphalia, Walter-Borjans signaled an SPD shift to the left, saying it once again needs to become the party of income redistribution. He called for increased controls of big business and criticized calls by CDU chief Annegret Kramp-Karrenbauer for more defense spending.

“AKK wants a European aircraft carrier. With us Social Democrats that won’t be built,” he told delegates. Finance Minister Scholz, who has stuck to fiscal discipline despite calls for increased spending, reaped strong applause when he was mentioned by the party’s outgoing interim leader but was mentioned only in passing by the incoming duo.

The three-day convention marks the SPD’s latest effort to get itself on track after reluctantly entering a coalition to support Merkel for her fourth term two years ago. While the party’s leaders have softened their campaign pledges, they will still be under pressure from a restive base and negotiations with Merkel’s bloc won’t be easy.

Reopening a climate package that took months to secure may find little support from the CDU and its Bavarian sister party, the CSU. Equally, increasing the minimum wage could become a major bone of contention.

The head of the Christian Democratic-led bloc in the Bundestag, Ralph Brinkhaus, congratulated the new SPD chief, bidding for “good and constructive” cooperation with them.

Pushing too hard could be risky as pulling out of the coalition could trigger a snap election. That could be disastrous with support for the SPD on par with the far-right AfD. The CDU, led by the embattled Kramp-Karrenbauer, also has little incentive to seek an early national ballot, and Merkel is keen to see out her tenure, especially with Germany set to hold the rotating European Union presidency in the second half of next year.

The dynamics of the convention will give an indication of how much time Merkel has left, even if the SPD’s new leadership is stepping back from the brink for the time being.

(Updates with delagates’ approval of coalition demands in third paragraph)

--With assistance from Chris Reiter.

To contact the reporter on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, ;Chad Thomas at cthomas16@bloomberg.net, Raymond Colitt, Iain Rogers

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