German politics. Playing it long

Both Chancellor Schroder and his main rival put deep reform before voters' whims

IN POLITICS, as many a leader has learned, a week is a long time. And in Germany these days, 24 hours seems an eternity. Before the weekend, Chancellor Gerhard Schroder was being called a comeback kid after his Social Democrats (SPD) perked up in the polls. By the start of the week, pundits said they had peaked; Angela Merkel and her opposition Christian Democrats (CDU) were rising again.

Yet when you speak to Mr Schroder and Ms Merkel these days, both seem sanguine. “Opinions are increasingly based on momentary impressions and thus change ever more quickly. You can never be guaranteed that your popularity will remain high,” says the chancellor, puffing on a cigar. His rival, too, is unfazed by her ratings. She seems almost to have anticipated that her lead was destined to narrow.

Politicians need to be good actors, of course. But if Mr Schroder and Ms Merkel aren't excited, it is also because both see a longer-term mission - to advance reform in the teeth of public scepticism. Neither is easily distracted by daily ups and downs. “The more short-termist public opinion is, the more you have to stay on long-term track,” vows Mr Schroder - and Ms Merkel would agree. Not long ago, he would have caused guffaws by saying that. In his first six years in office, Mr Schroder seemed a lightweight who changed course easily. Yet his opposition to the Iraq war (resented in Washington but liked at home) and his refusal to ditch labour-market reforms - the so-called Hartz laws - have changed his image. His reforms have won some acceptance; he has gained freedom by quitting the SPD leadership; and he cuts more ice abroad. Finally, he has got some gravitas.

Paradoxically, the summer's protests in eastern Germany against the Hartz reforms have helped him. The rallies spurred him to correct one big failure - communication - and explain the reforms' purpose. The unrest, which has petered out, also enabled the chancellor to show his steadfast face; it did no harm when he was pelted with eggs. Could this political revival offer an opportunity to deepen the reforms? Easier said than done, says Mr Schroder. Much of his Agenda 2010 package, including the Hartz reforms, remains to be implemented and, if need be, corrected. Pushing ahead now, he adds, could backfire: the reforms under way are already weakening desire for change, and society can only digest so much at a time.

His rival is undergoing a Hartz experience of her own. She was brave enough, in late 2003, to put a sensitive issue at the top of her reform agenda: the financing of statutory health care, which in its current form is becoming a prohibitive tax on labour. Instead of health-care contributions based on a worker's wage, Ms Merkel wants a flat-rate premium, with tax-financed subsidies for the poor. At first, her party seemed to back this. But recently feet have turned cold. The leaders of the Christian Social Union (CSU), the CDU's sister party in Bavaria, oppose the flat-rate premium, calling it unjust and a hard sell. Edmund Stoiber, the CSU leader who was a candidate for chancellor in 2002, is using the issue to harass Ms Merkel - perhaps because he wants another go at the top job. The two centre-right parties have tried and failed to make up, which helps explain the opposition's recent drop in the polls.

Yet Ms Merkel seems unmoved, not least because she sees deep reform as a sort of shock therapy. Compared with the speed of globalisation, she argues, Germany's reforms are too slow. Her health-care reform would show people they must rebuild the house, not remodel it. Germany now has the “choice between controlled change or an uncontrolled drop in living standards.”

Who will be left standing after the general elections in September 2006? Given the recent volatility, pundits are cautious. But for now, things look better for Mr Schroder. Both government and opposition are considered incompetent, says Manfred Gullner of Forsa, a pollster. This makes the popularity of their leaders an even bigger factor. Forsa says 45% of Germans now prefer Mr Schroder as chancellor, against 28% for Ms Merkel. In the summer, both still hovered around 35%.

Ms Merkel also has an image problem in her own party. She is a childless, remarried woman from eastern Germany, and a Protestant who had a life before politics: in all respects, the opposite of a typical west German conservative. And her rise has made a gang of regional leaders jealous. So Ms Merkel, some say, would find it easier to become chancellor than to be nominated for that job by her party.

Events in the state of Baden-Wurttemberg could give a strong sign of how willing Germany's conservatives are to give unconventional women a chance. On October 25th, after pressure from younger politicians, the state's premier, Erwin Teufel, said he would resign next April. There are two bidders to succeed him: one is Annette Schavan, an independent-minded lady. Most likely, the party will hold a primary of sorts to choose between the two candidates. A similar procedure may then be used to determine who will be candidate for chancellor.

Meanwhile, the economic fundamentals are against Mr Schroder - and he still could fall into what he calls the “gap” between the implementation of painful reforms and the harvest of benefits. Unemployment may reach a politically devastating 5m next year - because of slower growth, but also as an effect of the Hartz reforms, since more people will be counted as unemployed. Still, after a period in which Mr Schroder and his party were counted out, all bets are off. This is true not just for general elections in 2006, but also for next year's regional polls in Schleswig-Holstein and North Rhine-Westphalia. The scales may yet be tipped by external events. Some in the Schroder camp are said to be hoping George Bush will win another term - and give Mr Schroder something else to oppose, as firmly as he resisted the Iraq war.

Both Chancellor Schröder and his main rival, CDU leader Angela Merkel, put deep reform before voters' whims.

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