In a surprise result in December 2019, Finance Minister and Vice Chancellor of Germany, Olaf Scholz, was defeated in his bid to become SPD leader by two little-known left wingers, Saskia Esken and Norbert Walter-Borjans. Scholz had been tipped to win the leadership with his running partner Klara Geywitz.
The leadership defeat was reported as the biggest defeat of Scholz’s career. However, he could still stand to be Chancellor candidate for the SPD in the 2021 election, and he is in a good position to do this – his popularity has shot up during the corona crisis. He quickly delivered a 1.2 trillion economic rescue package, an important plank of the government’s highly popular corona measures. He is the only SPD politician with improved approval; his rating in early April was 63% (+17), only one point lower than Merkel, whose popularity ratings were also vastly improved. Compare that to the SPD party leaders: Infratest dimap, for example, found that only 41% even know who Walter-Borjans is and the party’s ratings remain low, at around 16%.
Even before the corona crisis, Scholz had always been one of the most popular SPD politicians amongst the public; but he hasn’t always been popular within his own party, as the leadership election results showed. Die Zeit reported that many in his party think of him as a ‘1.7 metre high empathy-free zone’ and that party people do not regard him a ‘one of us’. This idea of Scholz lacking empathy surfaced again during the corona crisis, when EU help for the countries especially badly hit by the virus was discussed: Green politician Jürgen Trittin said in an interview with the Welt, “Germany is now only represented by one face in the eyes of Italy and Spain. Olaf Scholz: without empathy in the face of a pandemic.” However, this accusation has also been recently rebuffed: the Zeit, for example, wrote that since the corona crisis started, “if you listen closely and look closely, you can now discover something publicly in Scholz that you usually only experience in smaller groups: empathy,” and “competent, calm, factual. Scholz decided a long time ago to embody pure reason in an ever crazier world. Politics without heat flow have made him a stranger in his own party…… Now, during the crisis, Scholz is also showing emotions, for example when he, obviously touched, is thanking doctors, nurses, carers and cashiers or giving people courage.” However, “the Emo-Scholz is only available in homeopathic doses. Scholz is said to remain Scholz.”
In the eyes of some on the left of the party, Scholz is hard to distinguish from the CDU: they argue that he is a party man who has brought deregulation and privatisation. His nickname, the Scholzomat, is one he earned at the turn of the century when he was General Secretary of the party and defending the controversial Hartz IV welfare reforms – which are very unpopular amongst left wing members – in what was seen as a robotic and jargon-laden way. Moreover, on becoming Finance Minister in 2018, he made it clear that he would adhere to his Conservative predecessor Wolfgang Schäuble’s ‘black zero’ policy (a balanced budget). While this was approved of by his CDU/ CSU coalition partners, it was not universally popular in his own party members, some of whom called him ‘Olaf Schäuble’. An FT profile of Scholz noted that, ”He is one of the party’s financial experts and a notoriously tough negotiator. He sums up his credo: “I can only distribute what I have earned’.”
As the corona crisis hit, Scholz’s caution was vindicated: Germany had the money available to protect its economy from the worst of the effects of the virus. In an interview with the Zeit, he said “There has been occasional criticism in the past that I have continued to insist on balanced budgets and have reduced the debt ratio. I have always said that this is not an end in itself, but should give us the necessary strength when a crisis comes. Today, thanks to our solid public finances, we can do our utmost to fight the crisis.” The government’s handling of the crisis has met with widespread approval, not least because of the loans and grants Scholz quickly made widely available to businesses, as well as short work, which means that employees who are temporarily laid off or or have their hours cut to zero, still receive between 60 – 67% of their salary.
A lawyer specialising in labour law, Scholz was first elected as an MP in 1998 and was General Secretary of the party from 2002 – 2004. He was Minister of Labour and Social Affairs 2007 – 9 in Merkel’s first grand coalition government, and mayor of Hamburg from 2011 until March 2018, when he became Federal Finance Minister.
In Hamburg, Scholz was respected more than loved according to the Hamburger Abendblatt, but his time as mayor was filled with successes. Hamburg was the first German state to offer free childcare to all parents, and Scholz’s time also saw more than 10,000 new housing units being built every year, in an effort to make housing affordable. He expanded the public subway system, and presided over the building of the concert hall, the Elbphilharmonie (the project went ten times over the original budget but is seen as a cultural highlight of the city). Scholz was criticised in July 2017, however, when violent riots broke out in Hamburg during the G20 summit and it was argued that he had underestimated the potential for problems.
Following the SPD’s disastrous 2017 election performance, Scholz became acting leader of the party, before Andrea Nahles was elected. Scholz published his own proposals for reforming the party, (contained in the commandingly, if not snappily, titled ‘No excuses! Answer new questions for the future! Clear principles!”) ahead of the party’s own devastatingly honest ‘Learning from Mistakes’ report. He was one of the most important supporters of entering a new coalition with Merkel’s CDU. The decision was highly controversial since many in the party were worried that being in another coalition with Merkel would make it impossible for the party to establish a clear, separate identity.
Scholz has had many successes as Finance Minister, including winning an agreement for a basic pension for low income earners, and a significant rise in the minimum wage. These announcements are particularly designed to appeal to voters in eastern Germany, where the SPD is polling in single figures.
His other main area of interest is Europe. He has argued that Europe is Germany’s most important national interest, and that there should be strengthened economic convergence. He believes that Germany should push forward projects to continue strengthening solidarity in Europe, including European-wide unemployment protection and minimum wages, so that Europe can tackle wage dumping and tax dumping.
Scholz’s defeat in his leadership bid was seen as criticism of the centrist course he has always pursued. However the new SPD leaders, whose election signalled a leftwards turn for the party, have so far failed to make any ground amongst the electorate, coming only 18th and 18th in a January poll of most popular politicans – well below Scholz. In contrast, Scholz’s successor in Hamburg, Peter Tschentscher, who is a moderate in the mould of Scholz, bucked the national trend and won the Hamburg election for the SPD at the end of February.
Since the SPD’s current leaders have both declared that they will not stand to be Chancellor candidates in 2021, the future is wide open for Scholz.