Berlin Cable

May 05, 2022

A Sandwiched Scholz

Once again, Chancellor Olaf Scholz only moved after the pressure got too high. His smaller coalition partners are now in a good position to drive government policy.

Finance Minister Christian Lindner addresses the media along with German Chancellor Olaf Scholz and Economy and Climate Minister Robert Habeck during a news conference following a special German cabinet meeting at the government's guest house Schloss Meseberg in Meseberg, Gransee, Germany May 4, 2022.
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Yes, he can! After weeks of intra-coalition rumbling and open criticism describing Germany’s chancellor as a “ditherer” when it comes Ukraine policy, Olaf Scholz came out fighting in a speech he gave on May Day in Dusseldorf, facing a noisy crowd of peaceniks and coronavirus deniers who were calling him “warmonger” (“Kriegstreiber”) and worse.

He accepted that some people were taking a pacifist stance, Scholz told his hostile audience. Leaving his usual composed demeanor behind, he then added, stretching out his arm and pointing his finger to underline the last part: “However, it must sound cynical to a Ukrainian citizen when he is told to defend himself against Putin’s aggression without weapons. That is completely out of place (aus der Zeit gefallen)!” Russia had no business being in Ukraine, Scholz went on, calling on Russian President Vladimir Putin to “stop the fighting and remove your troops.”

It was the first statement since February 27, when he held the Zeitenwende (“historic shift”) speech in the Bundestag, in which the chancellor showed spirit and emotional involvement when dealing with the highly complex question that has become of central importance for German foreign policy: What is the right way to address Russia’s brutal war of aggression against Ukraine?

World War III?

Until last week, Scholz and some of his Social Democrats (SPD) clearly had doubts about the wisdom of helping Ukraine with heavy weapons, or at least of doing so out of the Bundeswehr arsenal. For a short while, Scholz and leading members of his party even argued that doing so would raise the specter of a nuclear World War III—an unwise line of argument. Did this really hinge on Germany sending a few tanks? Would, by this logic, the Kremlin now order a nuclear strike on Slovakia, which already had sent five T-72 tanks to Ukraine?

What’s more, the argument gave credit to Putin’s inflationary nuclear threats. It unsettled the German public and worked toward turning clear support for the delivery of heavy weapons into a stalemate: According to DeutschlandTrend, one of Germany’s leading pollsters, 45 percent of Germans were for, and the same number against, sending heavy weapons on April 28. Two weeks earlier, on April 14, 55 percent had been for, and 38 percent against it.

The chancellor’s stalling provoked resistance. Prominent MPs of his coalition partners, the Greens and pro-business Free Democrats (FDP), started to attack Scholz outright. The Green chairman of the European Affairs Committee in the Bundestag, Anton Hofreiter, told media that “the problem is the chancellery. Mr. Scholz talks of Zeitenwende, but he is putting it into practice in an insufficient way, we clearly need greater leadership,” adding: “We have to give Ukraine what it needs, and that includes heavy weapons.” Marie-Agnes Strack-Zimmermann, the outspoken FDP chair of the Bundestag Defense Committee, answered “yes” when asked by a radio interviewer whether there was a “ditherer in the chancellery.” She, too, demanded that Germany should do “all it can” to help Ukraine.

A Smarting SPD

This criticism was taken badly by the SPD parliamentary group, which also reeled from the “dis-invitation” to Kyiv of German President Frank-Walter Steinmeier, who had planned to visit together with his Polish, Estonian, Latvian, and Lithuanian counterparts. Scholz tried to deflect some of the heat by announcing that he had earmarked €2 billion for military assistance, the bulk of which was destined directly for Ukraine and also for the EU’s European Peace Facility, which helps Kyiv purchase weapons, with his finance minister, FDP leader Christian Lindner, backing Scholz up publicly.

Meanwhile, the opposition Christian Democrats (CDU/CSU), led by Friedrich Merz, put Scholz under further pressure by introducing a parliamentary motion in support of sending heavy weapons to Ukraine. This move, together with pressure from within the coalition, finally made the chancellor move. With only hours to go before the defense ministers of 40 nations met at the US Ramstein airbase for a meeting convened by US Defense Secretary Lloyd Austin on April 27 to organize military support for Ukraine, there came the U-turn.

Germany would send 50 “Gepard” anti-aircraft tanks as well as enabling Eastern European partners to send Soviet-made heavy weapons by replenishing their arsenals, the government announced. As with the core component of the Zeitenwende, the €100 billion “armed forces special fund” (Sondervermögen Bundeswehr), this had not been cleared in advance with the SPD MPs. Parliamentary leader Rolf Mützenich and SPD secretary-general Kevin Kühnert had defended the “no heavy weapons” line on radio news shows just that very morning.

On the Back Foot

Scholz’ coalition has thus passed its first serious “stress test,” and this has allowed some insights into its dynamics. One is the that the Greens are profiting from the current crisis. With approval rates of 56 percent each, Robert Habeck, the vice chancellor in charge of the economy and climate ministry, and Foreign Minister Annalean Baerbock are now Germany’s most popular politicians, according to DeutschlandTrend. In contrast, Scholz has lost 13 points and is registering 39 percent—not far off opposition leader Merz’ rating (33 percent). Merz upstaged the chancellor this week by traveling to Kyiv—something Scholz, as he explained at his government’s away day at Meseberg castle on Tuesday, he isn’t considering right now because of the Steinmeier snub. (“The German people feel the same,” Scholz claimed somewhat implausibly.) He may now travel together with Steinmeier, after an air-clearing phone conversation between the German and the Ukrainian president.

The whole sorry affair tells of Scholz’ need to keep his SPD together and on board, given that parts of the party are still struggling with the sudden turning away from years of an uncritical Russia policy that did not see the Putin regime for what it was. But it keeps the chancellor on the backfoot while his coalition partners spread their wings. Habeck in particular, who won plaudits for his open, “un-politician-like” communication style, has underpromised and overdelivered, getting Germany out of its dependency on Russian coal and oil much quicker than anticipated. An EU embargo on Russian oil is now imminent. And the Greens, as key proponents of pushing Germany’s in the carbon-neutral, green energy transformation, have almost a monopoly on the progressive parts of the government’s agenda.

Ready for the Crunch?

The FDP and its leader, Finance Minister Lindner, meanwhile, have enabled the Zeitenwende, inter alia by playing ball with the Sondervermögen Bundeswehr that now needs to be enshrined in the constitution to circumvent the “debt brake,” which is supposed to take effect again next year, limiting new debt to 0.35 percent of GDP. With the “additional 2022 budget” (Nachtragshaushalt) approved on April 27 covering exceptional costs caused by the war of around €40 billion added to the earlier budget plan, new debt this year will amount to something just shy of €140 billion, plus the Sondervermögen. In 2023, new debt is then supposed to dramatically drop to €7.3 billion. 

This looks ambitious to say the least and only has a vague chance of working if Lindner’s earlier ploy works out, of repurposing €60 billion in unused debt from 2021 to fight the effects of the COVID-19 pandemic for the special climate and transformation fund—another fund that avoids the debt break and a risky budgetary move that the CDU/CSU has taken to the constitutional court. A ruling against it would be a disaster for the government, damaging Scholz and Lindner and robbing Habeck of the necessary funds for the energy transition. Against this background, and having shown itself highly flexible on debt, the FDP will be in a position of basically controlling government policy in terms of having a veto power over debt and expenditure, given that the return of the debt brake is also enshrined in the coalition agreement.

Going forward, the smaller parties seem to be in the driving seat when it comes to defining what “new eras” in Germany’s foreign and defense policy will mean, not least with a view to its China policy. The Greens will continue to burnish their role a transformers-in-chief, while the FDP will act as the keeper of Germany’s fiscal rectitude. The SPD and its chancellor will struggle to define a clear role of their own.

Then again, Scholz, whose win “against all odds” in last year’s election has likely made him overconfident in his own judgement, may perhaps just need to show his May Day fighting spirit a few more times to turn things around again.

Henning Hoff is Executive Editor of INTERNATIONALE POLITIK QUARTERLY.

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