When he delivered his first-ever speech on regulatory policy this week, economics minister and Social Democrat (SPD) leader Sigmar Gabriel could have picked an easier venue. He spoke in the old university town of Freiburg at the Walter Eucken Institute, home to many supporters of former Chancellor Ludwig Erhard and his social market economic policies.
Mr. Erhard, economics minister from 1949 to 1963, is considered the father of Germany’s economic reform after World War II. He favored a regulatory policy that was based on fair competition, entrepreneurial freedom and compassion with the less fortunate members of society.
Mr. Gabriel, who is also vice chancellor and a possible contender to succeed Chancellor Angela Merkel after elections in 2017, is in a bind over economic policies. He is trying to defend the interests of businesses and the economy without alienating support from left-leaning social-democratic party members and voters.
His party has fallen in election polls, despite a string of measures designed to please his electorate, such as retirement at 63 and a national minimum wage.
Early last year, President Joachim Gauck spoke at the same institute and stood up for disdained “neoliberalism.” He railed against too much regulation and declared himself in favor of more competition. Applause from guardians of a social market economy was a given.
Mr. Gauck was speaking at a time when the coalition of Chancellor Merkel’s Christian Democrats and Mr. Gabriel’s Social Democrats had been working tirelessly on upcoming laws for early retirement, a minimum wage and changes in Germany’s transition to renewable energies. Chancellor Merkel and her economic advisors did not follow Mr. Gauck’s warning, and the reforms became reality.