German elections: A Houdini runs out of tricks

Gerhard Schroder's ruling Social Democrats plumb new depths

NEVER underestimate Mr Schroder. The chancellor could turn things around, just as in September 2002, when he used the Iraq issue and floods in the east to stage a spectacular comeback and win the federal elections. That was the view even of opposition leaders before the European elections. But Mr Schroder's Social Democrats (SPD) did so badly that observers are now asking if Mr Schroder can cling to office until the next federal election, due in September 2006. Some are even wondering if the SPD, the country's oldest political group, can survive.

The European elections may not be fully representative, because of the low turnout of just 43%. Yet in some ways, the SPD's 21.5% showing, its worst in a national poll since the Federal Republic of Germany was founded in 1949, is worse than it seems. In parts of the industrial Ruhr, the party sank by over 15 points, as its core supporters stayed at home. In cities such as Berlin, Frankfurt and Munich, the Greens are now stronger than the SPD. In Thuringia, where state elections were held, the SPD won a mere 14.5%, and the (former communist) PDS surged to 26% (the Greens failed to reach the 5% threshold in Thuringia).

Yet Mr Schroder is unlikely to throw in the towel - for now. He is not the type to give up easily, and there is no obvious successor. Wolfgang Clement, the economics minister, would push more radical measures than Mr Schroder's pro-market Agenda 2010 reforms, which are already unpopular. Another possible replacement, Peter Struck, the defence minister, has health problems. Franz Muntefering, who took over from Mr Schroder as SPD chairman in March, still has work to do to stabilise the party. Nor is Mr Schroder poised to change tack over Agenda 2010. “I can only carry on with this policy and I only want to carry on with this policy,” he said this week.

The chancellor's options are limited. A cabinet reshuffle expected later this year is in danger of being written off as window-dressing. The government could try to give Agenda 2010 a more caring touch: next month the cabinet will have a special meeting to discuss reforms to Germany's health-insurance system. But besides these actions, Mr Schroder can do little more than hope that Agenda 2010 starts yielding positive results - and, above all, that economic recovery at last takes hold.

Yet Mr Schroder may be running out of time. The economy still looks moribund. And if the SPD continues to flop in elections, especially in the crucial May 2005 elections in North Rhine-Westphalia, Germany's biggest state and a traditional party stronghold, he will come under new pressure to make way for somebody else, most likely Mr Muntefering. If the opposition Christian Democrats win North Rhine-Westphalia, they will have a two-thirds majority in the Bundesrat, the upper house, and would then be able to block almost all legislation, even the budget.

It is hard not to feel some sympathy for Mr Schroder. His government has at last started to tackle some of the reforms that Germany badly needs. If the SPD is being punished more than it deserves, it is, says the Suddeutsche Zeitung, because it has become the scapegoat for everything that Germans think is rotten in their country. It is also the victim of ambivalence over reforms: most Germans favour them, so long as they hit people other than themselves. The opposition should not crow too soon, for it could one day find itself in a similarly uncomfortable position.

Analysis of the results of the EP elections in Germany, June 2004.