Olaf Scholz

Has the SPD Found its Own Merkel?

  • Why it matters

    Why it matters

    With less than a year to German federal elections, the Social Democrats are still not quite sure who is going to take on Angela Merkel. Hamburg’s popular mayor has an outside chance of becoming their candidate.

  • Facts

    Facts

    • Federal elections must be held by October 2017. The country is currently ruled by a “grand coalition” of the Social Democrats and Christian Democrats, but they will be rivals at the election.
    • Olaf Scholz has been governing mayor of Hamburg since 2011, and enjoys sky-high popularity within the city-state.
    • Social Democratic leader Sigmar Gabriel has long delayed confirming his candidacy for federal chancellor next years. Now possible rivals are circling.
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    Audio

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German Chancellor Merkel and Britain’s Prime Minister Cameron pose for photo as they are welcomed by Hamburg’s Mayor Scholz and his wife before traditional historic banquet “Matthiae-Mahlzeit” (St. Matthew’s Day Banquet) at town hall in Hamburg
Olaf Scholz served as labor minister in Angela Merkel's first government. Source: Reuters

Olaf Scholz, the mayor of Hamburg, is riding high these days: local opinion polls show 75 percent of Hamburgers happy with his work. If there were elections next summer, he would easily win an absolute majority for the center-left Social Democrats, or SPD.

There are of course elections next year, but they are at a federal level. There, the SPD is doing much worse, with poll ratings stuck in the low 20s, a terrible performance for a party once dominant across much of the country.

In a variety of coalitions, the Social Democrats currently govern nine of Germany’s 16 federal states. Among the nine SPD state premiers, the 58-year-old Mr. Scholz is the stand-out performer. His most spectacular success has probably been the rescue of the Elbphilharmonie concert hall. Mr. Scholz inherited a complete mess of a project, with building suspended and costs spiraling on the ambitious riverside concert hall. But he has steered the building to successful completion, with the spectacular structure now hailed as an architectural wonder and a new Hamburg symbol. Albeit one that cost 10 times the original estimate.

Construction of new housing has accelerated since Mr. Scholz took office in March 2011, responding to the city’s serious housing crisis. Mr. Scholz aims to have 10,000 new apartments built annually, 3,000 of them social housing. On a federal level, Mr. Scholz’s interventions have revealed him to be a shrewd pragmatist, able to cut deals with politicians from other parties, especially the center-right Christian Democrats, the SPD’s federal coalition partners.

“Olaf Scholz is clear, reliable and only talks when he has to. And he means what he says.”

Torsten Albig, SPD state premier of Schleswig-Holstein.

Recent coalition agreements on federal-state finances and on reforming Germany’s inheritance tax are said to have benefited greatly from his input. Under the German constitution, the upper house of parliament is made up of representatives from state governments.

“We had to achieve a majority for a law that still divided opinions,” was Mr. Scholz’s own, dry verdict on the inheritance tax deal, which he helped pushed through by constantly repeating the grim alternative. A failure to reach agreement would have been “a total humiliation by politicians,” he said.

Mr. Scholz’s mantra goes: politicians should solve problems, step by step, and not talk too much while negotiations are ongoing. “I want to achieve something in negotiations, not in interviews,” he told journalists at the time of the federal-state deal. In breaks from the drawn-out negotiations, while other politicians chatted with the media, Mr. Scholz could be seen sipping coffee alone, keeping his own counsel.

In the north of Germany, that sort of reserved behavior is a virtue. “Scholz is clear, reliable and only talks when he has to. And means what he says,” said Torsten Albig, the SPD state premier of Hamburg’s neighboring state of Schleswig-Holstein. Mr. Scholz is a sober supporter of business-friendly policies, in the tradition of the SPD’s right wing. Could this be enough to beat another centrist, the Christian Democrat chancellor Angela Merkel, in next year’s federal elections?

“Sure, he could do the job of chancellor,” say Mr. Scholz’s colleagues. But the same people immediately say that, although being chancellor wouldn’t be a problem, becoming chancellor would. “South of Hanover, Scholz is a hard sell,” has become a truism among his own circle. The city of Hanover is often seen as marking the southern boundary of northern Germany. It isn’t much good, they say, that Mr. Scholz would eventually grow on voters, if he puts them off in the first place.

SPD-Parteitag in Berlin: Scholz zum Generalsekretär gewählt
Former Chancellor Gerhard Schröder congratulating him on his elections as SPD general secretary in 2002. Source: DPA

Martin Schulz, another prominent SPD figure, has recently attracted loud calls to stand as the party’s candidate for chancellor next year. At federal elections, the main parties put forward a chancellor candidate, not always the current party leader. Mr. Schulz, now the president of the European parliament, last week announced a return to German domestic politics. But there have been no public calls for Mr. Scholz to stand. And, in truth, Mr. Scholz has only given the vaguest hints that he might.

“They love me in southern Germany,” says Mr. Scholz, with self-conscious irony. But the results of internal party elections tell a different story: while 97 percent of Hamburg SPD members voted him to be their leader, only 67 percent of the party nationwide voted for him to to be deputy leader of the federal party. On the left, he is instinctively disliked, as a right-winger closely associated with pushing through the SPD welfare and labor reforms of early 2000s, implemented by former Chancellor Gerhard Schröder. At the same time, more business-friendly and centrist elements in the SPD find him far too cold.

As labor minister in the first of Chancellor Merkel’s CDU-SPD coalition from 2005 to 2009, Mr. Scholz maintained the value of pensions even as net wages were falling. During the financial crisis of 2008, he encouraged employers to cut working time, not jobs: This is now a tactic widely praised internationally, including by the IMF, for getting through recessions.

In 2013 he favored a second coalition with the CDU saying it would be worth it, if only for a federal minimum wage. Unlike Mr. Gabriel and Mr. Schulz, Mr. Scholz is not from a poor background, but from a wealthy liberal family. Joining the SPD while still at school, he then studied law, specializing in labor law. His first political office was as Hamburg interior minister in 2001, when he made a name as a hardliner.

28-p4-poll-01

Even then, he was convinced that citizens’ sense of security is undermined if they feel the state is losing control over criminals. “Of course it was not good that, for a while, we lost the control we should have had,” Mr. Scholz says about the 2015 refugee crisis. But both the state and society at large reacted with speed and flexibility, he adds.

This November, his Hamburg government will pass a new package of security laws: a “clean-up offensive” meant to change the impression that the city’s problem districts have been neglected. An increased number of administrative tribunals is meant to speed up asylum processing, including final decisions to deport.

Recognizing problems and working out solutions: in Hamburg, Mr. Scholz’s approach has even helped to stem the rise of the Alternative for Germany, or AfD. In many other states, the populist right-wing party has soared to electoral success, but in Hamburg, its support remains below 5 percent in the polls. Even Ms. Merkel has not managed that. Another reason, why Mr. Scholz is taken seriously by some as a possible SPD chancellor candidate.

 

Donata Riedel covers politics and economic policy for Handelsblatt. To contact the author: riedel@handelsblatt.com.

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