Germany in political limbo after Social Democrats' narrow win

For a moment, it felt like he was already chancellor. As Olaf Scholz stood on the stage surrounded by euphoric followers chanting his name and celebrating him as if he were the next leader of Germany, he was the clear winner of the night.

Scholz had just done the unthinkable — carry his long moribund centre-left Social Democrats to victory, however narrow, in elections Sunday that were the most volatile in a generation.

But if winning wasn’t hard enough, the hardest part may be yet to come.

Scholz, an affable but disciplined politician, most recently served as the vice chancellor and finance minister in the outgoing government of Chancellor Angela Merkel. Although he leads the party opposing her conservative Christian Democratic Union, he came out on top by persuading voters that he was not so much an agent of change as one of stability and continuity. In a race without an incumbent, he ran as one.

It is a balancing act that may be hard to sustain for a one-time socialist who today is firmly rooted in the centre of a fast-changing political landscape.

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It’s not that Germans have suddenly shifted left. In fact, 3 in 4 Germans did not vote for his party at all, and Scholz campaigned on raising the minimum wage, strengthening German industry and fighting climate change — all mainstream positions.

Despite earning the most votes, Scholz is not yet assured of becoming chancellor. And if he does, he risks being absorbed in wrangling among multiple coalition partners, not to speak of rebellious factions within his own party.

On Monday, as his conservative rival continued to insist that he would work to form a government, the momentum seemed to swing behind Scholz as it became increasingly evident that he had the strongest hand to play in coalition talks involving two other parties. “The voters have spoken,” he told reporters confidently.

Still, his task will not be an easy one.

Scholz has been a familiar face in German politics for more than two decades and served in several governments. But even now, it’s hard to know what kind of a chancellor he would be.

A fiery young socialist in the 1970s, he gradually mellowed into a post-ideological centrist. Today, he is to the right of significant parts of his party — not unlike US President Joe Biden, to whom he is sometimes compared. He lost his party’s leadership contest two years ago to two leftists.

His party’s surprise revival in the election rested heavily on his own personal popularity. But many warn that Scholz’s appeal does not solve the deeper problems and divisions that have plagued the Social Democrats, known by their German initialism SPD.

“None of the claims of staleness or political irrelevance levelled at the SPD over the past few years have gone away,” the newspaper Süddeutsche Zeitung wrote Monday.

Or as Thomas Kleine-Brockhoff of the German Marshall Fund put it: “Social Democrats aren’t offering a new package, they’re offering a centrist who makes you forget the party behind it.”

Like many of its sister parties elsewhere in Europe, Germany’s Social Democrats have been in crisis for years, losing traditional working-class voters to the extremes on the left and right and young urban voters to the Greens.

Now, Scholz will not only have to satisfy his own leftist party base, but he must also deal with a wholly new political landscape.

Instead of two dominant parties competing to go into coalition with one partner, four midsize parties are now jockeying for a place in government. For the first time since the 1950s, the next chancellor will have to get at least three different parties behind a governing deal — that’s how Scholz’s conservative runner-up, Armin Laschet, could theoretically still beat him to the top job.

A new era in politics has officially begun in Germany — and it looks messy. Germany’s political landscape, long a place of sleepy stability where several chancellors stayed on for more than a decade, has fractured into multiple parties that no longer differ all that much in size.

“There is a structural shift going on that I don’t think we have understood yet,” said Kleine-Brockhoff. “We are confronted with a change in the party system that we didn’t see coming just weeks ago. A multidimensional chess game has opened.”

Scholz is walking into a fiendishly complicated process where the power to decide who will become the next leader lies almost more with the two smaller parties that will be part of any future administration: the progressive Greens, who at 14.8% had the best result in their history; and the pro-business Free Democrats, with 11.5%. Together, these two kingmakers are now stronger than either of the two main parties.

In another first, the Free Democrats signalled they would hold talks with the Greens first before turning to the larger parties.

The Free Democrats have never been shy about their preference to govern with the conservatives. The Greens are a much more natural fit with the Social Democrats, but might see advantages in negotiating with a weaker candidate. On the state level they have co-governed successfully with the Christian Democrats for years.

Meanwhile, Laschet, whose unpopularity and campaign blunders sent his party crashing 9 percentage points to its lowest election result ever, said he would not concede on “moral” grounds, ignoring a growing number of calls from his own camp to accept defeat.

“No one should behave as if they alone can build a government,” Laschet told reporters Monday. “You become chancellor if you can build a majority.”

It would not be the first time that someone who lost the popular vote became chancellor. In 1969, 1976 and 1980, Willy Brandt and Helmut Schmidt, both centre-left chancellors, formed coalition governments having lost the popular vote. But both got upward of 40% of the vote and did not face the complex multiparty negotiations now getting underway in Germany.

Several conservatives urged Laschet to concede Monday.

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“It was a defeat,” said Volker Bouffier, governor of the state of Hesse, adding that others were now called upon to form a government.

Ellen Demuth, another conservative lawmaker, warned Laschet that his refusal to concede was hurting his party further. “You have lost,” Demuth tweeted. “Please recognize that. Avoid further hurting the CDU and resign.”

The state leader of the conservative youth wing was equally adamant. “We need a true renewal,” said Marcus Mündlein and that, he said, could be successful only if Laschet “bears the consequences of this loss in trust and steps down.”

An opinion poll released after the election showed that more than half of Germans preferred a coalition led by Scholz, compared with a third who said they wanted Laschet at the helm. Asked who they preferred as chancellor, 62% opted for Scholz, compared with 16% for Laschet.

Some argued that a Scholz-led government would present his party with an opportunity to revive its declining fortunes.

“It’s a momentous moment for German social democracy which was on the verge of eternal decline,” Kleine-Brockhoff said. “Mr. Scholz will have a very powerful position because he alone is the reason his party won.”