The SPD’s big missed opportunity

Yesterday saw the first clash in the German parliament between Chancellor Merkel and the newly designated “chancellor candidate” of the SPD, Peer Steinbrück. The occasion was a debate about the euro crisis. The new Merkel was on display. Solidarity was writ large. Greece, so her fervent wish, should stay in the euro area. The currency union is a symbol of the Nobel-prize-winning good that is European integration.

Steinbrück was reasonably effective. In essence he said that if the new Merkel had been in evidence back in early 2010 the whole crisis would not have blown out of control. He was right to argue that. It is what many progressive economists said at the time, publicly and also ‘privately’ to the SPD.

It was good advice the party just didn’t take. The SPD failed to take a clear and consistent line in the months that followed. Most fatefully of all it allowed itself to be an accessory to the blunder of insisting on the haircut of Greek bondholders. The failure to stake out a position opposed to the  Conservative-Liberal coalition was a huge strategic error. It was obvious that the German government’s own position would prove untenable.

Merkel’s post 2010 strategy has completely and utterly failed. She has had to backtrack on almost everything she has said, and meanwhile the crisis has deepened and the cost to German taxpayers has risen. She ought by all rights to be political toast. Yet she leads the polls. Partly this reflects her consummate political skills. But the failure of the main German opposition party to make a stand for European solidarity – even if it would have been unpopular with some elements of its voter base – was not only bad for Europe, it decisively limits the party’s room for manouvre.

A clever rhetorician such as Steinbrück will scratch the Teflon Chancellor somewhat. But the mistakes of the past prevent him from landing a knock-out punch.


  1. Chris Peeters says

    I agree with Andrew on the lacking consistency of the SPD-position.
    I guess that Steinbruck expects a crisis in spring 2013, and wants to blame it on Merkel.
    See e.g. an article by Munchau in todays FT: ‘The banking union will not end Europe’s crisis’.
    What will happen in a crisis is that Southern Europe -Hollande first- will demand German solidarity, with no banking union in place and no democratic control on the spending of rescue money.

    That should be the moment to ask Hollande for steps in the direction of a political union.
    I don’t believe Hollande wants such steps. Once the German money is accepted there will be thousand arguments to stall that development. So we should be ready to use a crisis: it is unacceptable that European banks are saved with European money without democratic control. At the European level!

    The only moment when France will accept such a transfer of power is when its economic existence is threatened.