Germany’s Next Election Campaign Is Already Getting Started

Germany’s Next Election Campaign Is Already Getting Started

Germany’s next election isn’t due until 2025 but campaigning is already up and running and Robert Habeck has seized the early initiative.

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(Bloomberg) — Germany’s next election isn’t due until 2025 but campaigning is already up and running and Robert Habeck has seized the early initiative.

The Greens’ economy minister fired his opening salvo late last month with a call for loosening budget restrictions — a direct attack on his regular sparring partner, the fiscally hawkish Finance Minister Christian Lindner of the Free Democrats.

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He followed that up this week with a foray into foreign policy, an issue that would typically be the reserve of Social Democrat Chancellor Olaf Scholz or Habeck’s Greens party rival, Foreign Minister Annalena Baerbock.

A video of what Habeck framed as his attempt to put the Israel-Hamas war into context rapidly spread on social media and won praise across the political spectrum, including from the right-wing tabloid Bild — Germany’s biggest-selling newspaper and a long-term critic of the vice chancellor.

The twin initiatives marked a surprising departure for someone who has repeatedly called for unity in the fractious three-way coalition. Party leaders had met just days earlier to discuss the focus for the second half of their term — and how to put an end to the public bickering that has damaged the government’s standing among voters.

Habeck has weighed into the budget-policy debate in the full knowledge that it will be one of the key issues in the election campaign, according to Cornelia Woll, president of the Berlin-based Hertie School and professor of international political economy.

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“Robert Habeck is aware that it’s difficult for him to assert himself at the moment,” Woll told Bloomberg. “The landing stage for the exchange of blows is therefore clear: the 2025 federal elections.”

The discord and sense of drift have paved the way for the rise of the far-right Alternative for Germany party, which has surged to second place in opinion polls behind the main opposition conservatives. But with two years until the next election, Habeck is shaping up as a potential challenger to Scholz and conservative leader Friedrich Merz.

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Read More: German Economy Chief Urges Broad Rethink of Budget Constraints

Habeck reiterated his case for more expansive government spending in a Bloomberg interview on Friday, while conceding that Europe’s biggest economy won’t loosen its fiscal stance under the current coalition, not least because lifting the constitutional debt brake would require a two-thirds majority in both houses of parliament.

“Thinking should be allowed in politics,” Habeck told Bloomberg Television’s Anna Edwards. “The gas from Russia has gone, China is a competitor, we see that wars are happening again — to ask if our budget rules, our European rules, our federal system are adjusted right is necessary.”

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The 54-year-old from the northern region of Schleswig-Holstein made way for Baerbock to run as the Greens’ chancellor candidate at the last election in 2021 and the party struggled to sustain its strong polling at the outset of the campaign. Next time around, Habeck is likely to get his shot.

To maximize his chances, he is going to have to find a way to get through another two years of the current coalition with his ambitions to upgrade the German economy constrained by the spending concerns of his partners.

When analysts were running coalition permutations ahead of the 2021 election, it seemed difficult to imagine that Habeck and Lindner, leader of the pro-business FDP, could coexist in the same government. Two years into that experiment, the chasm between them is out in the open.

Habeck wants state intervention to decarbonize the economy and billions of euros in subsidies to lure future industries like semiconductors.

With Scholz’s backing, Lindner has insisted on reinstating the debt brake to turn the page on the era of public spending that kept the economy afloat through the pandemic and the energy crisis. He repeatedly stresses that sound finances are the basis of Germany’s prosperity – and an anchor of stability for the wider European Union.

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In an interview with the Heilbronner Stimme newspaper last week, Lindner said German voters have a clear choice: “The grand experiment of planning at the Green table and, on the other hand, the free-market system that has been the foundation of prosperity for decades.”

As that ideological battles plays out around the German cabinet table, the economy is bumping along on the brink of recession, executives are despairing of getting a clear policy signal from Berlin and the AfD is building support for an assault on forthcoming regional and European elections.

Lindner and the FDP are aware of Germany’s economic problems but they argue that a spending splurge would risk making it worse. Their concern is that if investors judged the government was abandoning fiscal discipline it could lead to an increase in borrowing costs, dragging the economy deeper into its hole.

“We stick to the rules or we change them together,” Habeck told Bloomberg Friday. “But this is not going to happen, I guess, not on the budget.”

—With assistance from Chris Reiter.

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