Schröder Links "Political Fate" to Reforms

On Friday, Schröder’s center-left coalition of Social Democrats (SPD) and Greens passed sweeping reforms to Germany’s health care system. But six left-wing SPD parliamentarians voted against the legislation – nearly robbing the government of its own so-called “Chancellor” majority.

With a number of highly contentious reform bills still to be passed by the lower house of parliament, the Bundestag, Schröder on Tuesday explicitly said the future and success of his government would be measured on whether it managed to overhaul the country’s bloated welfare system and moribund economy.

“I want to consciously tie my political fate to the implementation of these reforms,” Schröder said in a speech at the German Academy of Sciences in Berlin. “If we don't do it by Christmas, I fear we will never do it.”

Many of the SPD rebels accuse Schröder of betraying the party’s roots by pushing reforms that will effectively trim the welfare state, lower taxes and scale back pensions. They also blame the reform course for pushing the SPD to new lows in opinion polls and routing the party in a number of state elections.

Stagnant economy

But in light of Germany’s stagnant growth and chronically high unemployment, Schröder has decided he has no alternative other than to push forward with his so-called ‘Agenda 2010’ reform package.

Schröder likely hopes his rhetoric will encourage the left-wing backbenchers to toe the government’s line. However, the move is a calculated gamble by the Chancellor, since other reforms yet to be brought before parliament are even more controversial than the health care legislation.

The next key vote will come on October 17, when bills trimming unemployment and welfare benefits reaches the floor. Since the heath reforms plans were co-sponsored by the opposition conservatives, there was never any doubt that the legislation would pass. But from here on out, the ruling coalition will be counting on every one of its MPs to back the government.

Upping the ante

Some observers believe Schröder may have raised the political ante too far too fast with his latest comments. “In the coming votes, where the opposition has already said they’re against them, it will determine the survival of the coalition. He needs to keep his power dry for that,” Professor Ulrich von Alemann at the Heinrich-Heine University in Düsseldorf told German ARD television.

Unfortunately for Schröder, some MPs have already announced they will oppose the next reforms unless there are changes. And perhaps more ominously, it appears that resistance could come from Schröder’s junior coalition partner the Greens as well as his own SPD backbenchers. That could increase pressure on the Chancellor to water-down his Agenda 2010.

“We won’t change the Agenda 2010, but rather modify it in a few points,” the leader of left-wing SPD parliamentarians Michael Müller said on Wednesday. “If we can reasonably and rationally explain it all and possibly even improve things here or there then we’ll have a unified parliamentary group.”