Germany’s Scholz Calls for Spending Boost in Bid for Chancellor

(Bloomberg) --

German Social Democratic chancellor candidate Olaf Scholz sketched out a fiscally expansive blueprint for the country’s technological and ecological transformation should he manage to revive his party’s fortunes and succeed Angela Merkel after September’s election.

Scholz, the vice chancellor and finance minister in the current conservative-led ruling coalition, introduced a program Sunday dubbed “Social. Digital. Climate-Neutral.” It calls for significant spending in coming years to finance technology infrastructure and cleaner energy and he hopes it will help persuade voters that he’s the best person to run Germany after Merkel steps aside following more than a decade and a half in power.

The SPD’s stance on spending marks a contrast with Merkel’s conservative CDU/CSU, which is sticking firmly to its traditional position that Germany needs to restore constitutional limits on borrowing that have been temporarily suspended to deal with the coronavirus crisis.

“It’s about how we can carry out missions for the future which will ensure that in the next 10, 20, 30 years we have good jobs and a climate-neutral economy,” Scholz said in a virtual presentation before a meeting of the SPD leadership to discuss the program. “After more than 200 years of industrial history based on fossil resources, we must unleash the biggest ecological and technical revolution Germany has seen.”

How Merkel’s Legacy Will Test Whoever Succeeds Her: QuickTake

SPD co-leader Saskia Esken, speaking alongside Scholz, said an “austerity budget” will not help Germany put the pandemic behind it or tackle the challenges of the future, and that opening the spending taps should not be limited to stimulus in times of emergency.

Scholz is a contender in the race to take charge of Europe’s biggest economy and steer it out of the pandemic-induced slump, as well as shape its role in a European Union dealing with challenges ranging from an increasingly assertive China to revitalizing the transatlantic relationship.

Based on current polling, becoming Germany’s next chancellor will be a considerable challenge for the 62-year-old former mayor of Hamburg. The SPD, which has suffered a string of electoral setbacks in recent years, trails in third place on around 15%, with the Greens on about 17% and Merkel’s conservative CDU/CSU bloc on 37%.

The most likely outcome of the election as things stand is a conservative-led coalition with the environmentalist Greens. For Scholz to become chancellor, he would probably have to persuade the Greens and the Left party to join the SPD in a three-way administration, though the chances of that happening appear relatively remote.

Traditionally one of Germany’s two main political forces, the SPD has been hemorrhaging voters for years. They last won an election outright under former Chancellor Gerhard Schroeder in 2002 with around 40% of the vote. In the most recent election in 2017, they took only just over 20%, reluctantly becoming junior partners in coalition with Merkel for a third time.

Many party officials opposed the move, arguing that it would have been better to go into opposition and try to rebuild after years of Merkel domination.

Read more: CDU/CSU Gains Most in German Election Polling Average

Scholz is seen as a safe pair of hands as finance minister, and has been at the forefront of the government’s efforts to offset the impact of the pandemic on the economy.

However, he has come under some pressure over last year’s collapse of Wirecard AG. A parliamentary inquiry is underway in Berlin looking into the government’s apparent failure to pursue warnings about the electronic payments company and Scholz will be called to in coming months.

Scholz has been critical recently of Germany’s decision -- pushed by Merkel -- to cede responsibility for sourcing Covid-19 vaccines to the European Commission, saying more shots should have been secured earlier.

He has been trying to raise his profile among voters and exploit the fact that the CDU/CSU has yet to name its candidate to succeed Merkel. Either Armin Laschet, who won last month’s CDU leadership election, or popular Bavarian Premier Markus Soeder, head of the CSU sister party in the southern state, are likely to get the nomination.

On a personal level, Scholz regularly comes in third in surveys of chancellor preference, behind Greens’ co-leader Robert Habeck in second and either Laschet or Soeder first.

“We have started early because we know that are playing catchup,” Scholz said Sunday. “The closer the election comes, the clearer it will be that the SPD has what it takes to get a mandate from the people.”

©2021 Bloomberg L.P.