Schröder’s surprise

With the chancellor having reacted to electoral defeat by dropping a political bombshell, the fallout may be even bigger than he expects

IS IT a desperate act of self-destruction, by a politician who has been trapped and deprived of all escape routes? A brilliant manoeuvre to discipline left-wing dissenters within his party, and catch the opposition off guard? Or is it the act of a statesman who wants to save his country more than a year of political stalemate?

All these interpretations were doing the rounds for many days after Germany's chancellor, Gerhard Schroder, announced that he would try to bring forward parliamentary elections by a year, probably to September 18th, following the crushing defeat of his Social Democrats (SPD) in elections in their heartland of North Rhine-Westphalia, the country's most populous state. “Germans should declare by whom they wish to be governed,” Mr Schroder said in a brief, bitter statement.

Whatever Mr Schroder's motives, he has pushed Germany into an election campaign that looks certain to be one of the toughest in post-war history. Within hours, politicians sounded as if they were already on the trail. And everybody agreed: this will be a Richtungswahl - an election that decides which way Germany is to go. According to Franz Müntefering, the SPD's boss, it will pit “market radicalism” against “social progress”.

What is more, the early elections may well reshape the political scene, with the Greens as the main loser; they could end up out of power and without a partner. The Social Democrats (SPD) want to campaign on their own; this dooms the “red-green” coalition, which has governed since 1998. What is more, Oskar Lafontaine, the former SPD chairman, has decided to leave his party and try to coax ex-communists (the PDS) in the east and a new left-wing party in the west into forming a new organisation, which would certainly make it into parliament. And it is just possible that the neo-Nazi National Democrats (NPD) may clear the 5% threshold.

It was a remarkable turn of events, even for political insiders. Most thought Mr Schroder would ride out the storm, hoping that the economy would recover later this year or early next, and that his economic-reform package, known as Agenda 2010, would finally yield tangible results. Rather than doing anything dramatic, the thinking went, he would move a bit to the left to placate the malcontents, but not enough to endanger his reforms. And later this year he might shuffle his cabinet. But in the end, the defeat in the state election was too devastating: the SPD won only 37.1% of the vote, its worst result in 50 years. Mr Schroder and Mr Müntefering had little choice but to seek early elections. Otherwise they would have been forced to fight a losing battle on two fronts until autumn 2006, when the next federal elections were scheduled to be held: this would have meant 16 months of agony, during which time the SPD could have fallen apart and seen its popularity plunge even further.

One front would have opened up within the SPD. Mr Schroder's government has only a slim majority in parliament, and a sizeable SPD faction sees his reforms as an unwelcome attack on the welfare system. Encouraged by Mr Müntefering's recent outburst against global investors, leftists have been devising measures they would like to see run alongside, or even replace, Agenda 2010. Another front would have opened in the Bundesrat, Germany's upper house, representing its 16 states. Because the SPD is still committed to “grand coalitions” with the Christian Democrats (CDU) in some states, the opposition does not have a two-thirds majority in the upper house, which would allow it to block some 60% of legislation, including the budget. But there is always the possibility that a premier who sits on top of one of these grand coalitions will jump ship - and allow his state to vote with the opposition in the Bundesrat instead of abstaining.

With his decision to seek early elections, Mr Schroder has managed to escape both traps. But many things must fall into place for him to have a chance of a third term; most of them are out of his control. And his own popularity - most Germans still want him as chancellor - is unlikely to save him this time. For one thing, early elections could be blocked either by the president, Horst Kohler, or the Constitutional Court. According to the constitution, the government cannot dissolve parliament. It needs to hold a vote of confidence, and then lose, for elections to be possible. And, as the Constitutional Court ruled after Helmut Kohl took the same route in 1982, the vote cannot be a fake. A chancellor, the judges said, needs to have real doubts whether he still has the support of a majority in parliament. What makes things easier is the fact that some SPD parliamentarians have let it be known that they won't support Mr Schroder in some reforms that are still in the pipeline.

More importantly, early elections may not be enough to discipline the SPD, or to keep a new left-wing party from becoming a force to be reckoned with. The SPD's left wing is still pushing hard not to run on Agenda 2010, which for them is the main reason for their party's decline. But Mr Schroder and Mr Müntefering only want to complement it with a set of even more social-democratic measures. As for a new left-wing party, it could win around 6% of votes, at least some of them from the SPD.

Even more decisive will be how the opposition reacts. Mr Schroder must have hoped that it would start bickering over its candidate for chancellor and its programme, as it has often done before. But since time is now of the essence, the opposite seems to be happening. It is almost a given that the CDU and its Bavarian sister party, the Christian Social Union (CSU), will name Angela Merkel, the CDU's boss, as their leader. Finally, there is the economy. It would certainly help if it were to pick up in the months to come. But this seems highly unlikely. Although growth was 1% in the first quarter and unemployment has dropped to somewhat below 5m, no economist predicts a quick improvement. Growth in the first quarter was driven mainly by exports, which are likely to weaken, while domestic consumption and investment are still lacklustre. To add insult to injury, the federal budget deficit is skyrocketing.

If Mr Schroder has hardly any chance of winning, is there yet another reason for his move? Some observers think so: one possible outcome, they say, is that the CDU/CSU could be forced to form a grand coalition with the SPD. If the former communists or a new left-wing party and perhaps even the NPD make it into parliament, both the current government and opposition camps could wind up without a parliamentary majority. This scenario is rather far-fetched. But even if it doesn't come to pass, calling early elections may still have been the right decision. If the SPD wins at least a respectable result, Mr Müntefering should be able to rebuild it in opposition. In any case, the vote should allow Mr Schroder a graceful exit - and a decent place in history as a statesman who started reforms and knew when to quit.

With the chancellor having reacted to electoral defeat by dropping a political bombshell, the fallout may be even bigger than he expects.

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