Gerhard Schroeder's long game in German politics

Gwynne Dyer, London

Gerhard Schroeder has already won, even if he has to give up being the chancellor of Germany. The "grand coalition" talks that begin on Oct. 17 between his Social Democratic Party (SPD) and the conservative Christian Democratic Union would make CDU leader Angela Merkel the new chancellor, but her cabinet would be exactly balanced between socialist and conservative members -- and the SPD would hold the key foreign, finance, justice and labor ministries. If those talks fail, Schroeder might even be back as chancellor.

Not bad going for a politician who never got the unemployment rate below ten percent during seven years in power. His cautious attempts to cut Germany's lavish social benefits and to make it easier for German companies to lay off workers led to a split in his own party, with the radical wing breaking away to form a new Left Party in alliance with the ex-Communists of former East Germany. Just three months ago, when he called a national election a year ahead of time, opinion polls put the conservatives 21 points ahead of the SPD. But Schroeder is the supreme political tactician of his generation.

He ruthlessly exploited every mistake Angela Merkel made during the campaign, and she made quite a few. The most damaging, perhaps, was to choose Paul Kirchhof, the country's best-known advocate of a "flat tax", as her shadow finance minister. Schroeder lampooned him as "the professor from Heidelberg" who wanted teachers, nurses and millionaires all to pay the same 25 percent in income tax, misrepresenting Kirchhof's pet idea as official CDU policy, and the numbers started to move.

By the time Germans voted on Sept. 18, Schroeder had appeared at an astonishing 120 rallies and the SPD had almost closed the gap, winning 34.3 percent of the votes to the CDU's 35.2 percent. Both of the major parties got a lower share of the vote than in almost any previous election, but the left as a whole, including the Greens, the SPD's partners in the outgoing coalition, and the new Left Party, won well over half the seats in the Bundestag.

Schroeder had vowed not to bring the breakaway Left Party into any SPD-led coalition, but Merkel was in an even worse position. Once Green Party leader Joschka Fischer ruled out any deal with the CDU, her only potential coalition partner was the right-wing Free Democratic Party (FDP), which won only 9.8 percent of the vote. "There is no majority for a neo-conservative government in Germany," Fischer was quick to point out. "This is a very important signal that we have to take into account in our conversations."

Fischer was implying that the only real option was a "grand coalition" between the two major parties, and after three weeks of haggling over who would be the chancellor in that coalition negotiations on a joint program will soon be getting underway. But the Greens would not even be a part of that coalition, so why did Fischer look just as pleased with the outcome as Schroeder himself?

In return for giving up the chancellorship, Schroeder has managed to win all the other cabinet positions that the SPD most cares about. The SPD will hold the foreign ministry, which means that Germany will not drop its opposition to the US invasion of Iraq, nor will Merkel be able to wreck the negotiations for Turkey's entry into the European Union. It will hold the finance ministry, which means the CDU's plans for radical tax changes must wait. It will hold the labor ministry, which means that Merkel's plans for radical reforms in the labor market will not happen.

Joschka Fischer is also happy, because the negotiations for a "grand coalition", which must conclude by Nov. 12, may not produce agreement on a joint program, in which case the president, Horst Koehler, would have two choices. He could nominate one of the major party leaders as chancellor and put it to a secret vote in the Bundestag. But Merkel would lose such a vote, given the overall "left" majority in the legislature, whereas Schroeder would almost certainly win it and go on to form a minority government with the Greens.

Or Koehler could just call a new election -- which the SPD would probably win, since the CDU would have no time to choose a more charismatic leader than the wooden Merkel. Either way, the signs point to a new SPD-Green minority government that depends on Left Party votes to get key legislation through the Bundestag. And even if the "grand coalition" happens, it would probably break down and lead to a new election and a similar outcome before very long. The master tactician wins again.

The only problem is that these combinations and permutations all lead to the same outcome: Something close to paralysis in the reform process. There will be no radical changes to break Germany out of its current pattern of slow growth and high unemployment. But then, that is what the Germans actually voted for.

Germany is already a very rich country, and even the unemployed don't suffer extreme deprivation. Rather than accept radical change and considerable sacrifice in a gamble that that might break the country out of its present pattern, most Germans would rather go on more or less as they are. And it is their country, after all.

The writer is a London-based independent journalist.