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Analysis: Germany's Scholz bets on experience in uphill election battle

[June 14, 2021] By Michael Nienaber

BERLIN (Reuters) - German Finance Minister Olaf Scholz is hoping to overcome his party's poor ratings to win this summer's election by attacking Chancellor Angela Merkel's conservatives as a club for lobbyists while presenting himself as an experienced crisis manager.

With Merkel not running in the Sept. 26 vote and centre-right candidate Armin Laschet struggling to unite the CDU/CSU alliance, Scholz sees a chance of ending 16 years of conservative rule.

But public demand for change, personified by 40-year-old Annalena Baerbock from the Greens, and doubts about his credibility following two business scandals could prevent Scholz, 63, from becoming the next leader of Europe's biggest economy.

His main challenge will be to translate good personal ratings into support for his centre-left Social Democrats (SPD), polling third behind the conservatives and Greens.

Scholz told Reuters that opinion polls suggested the SPD was "within striking distance" of its rivals.

"That's why we're confident that in the coming weeks and months, we'll reach the strength needed to get the mandate and lead the next coalition government," he said.

Polls put the SPD on 14-16%, behind the conservatives on 27-28% and the Greens on 20-22%. However, 48% of Germans view Scholz as the best candidate to become chancellor, clearly ahead of Laschet's 43% and Baerbock's 28%.

So far, Scholz has avoided personal attacks on his rivals, though other SPD politicians have questioned Laschet's ability to make tough decisions and Baerbock's experience.

PANDEMIC

As finance minister, Scholz's response to the COVID-19 pandemic was described as excellent by the International Monetary Fund.

During his three-and-a-half years in the post, Scholz ditched balanced budgets at home and helped create the European Union's pandemic recovery fund, overcoming Merkel's resistance to the bloc's unprecedented debt plans.

With France, Scholz drove efforts to introduce a global corporate minimum tax and new tax rules for tech giants.

Scholz has denounced the CDU/CSU alliance, his current coalition partner, as being too close to business groups such as the real estate industry.

He said the coalition had agreed that landlords and tenants should share additional heating costs caused by an increase in a levy on carbon dioxide (CO2) this year.

"But it was blocked by the real estate lobby which has the CDU/CSU parliamentary group firmly under its thumb," Scholz told Reuters.

By casting himself as a level-headed man of action who is not only getting things done, but also promoting social justice more than the Greens, Scholz hopes to attract voters who fear being left behind in the shift towards a more carbon neutral economy following the pandemic.

"There is much at stake in the coming years. If we don't do this right now, we will jeopardize the foundations of our prosperity," Scholz told an audience in Berlin.

Scholz has also lambasted the Greens for proposing more increases in the CO2 levy, which would mean higher fuel costs for motorists.

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German Chancellor Angela Merkel and Finance Minister Olaf Scholz wear protective masks as they attend the weekly cabinet meeting at the Chancellery in Berlin, Germany, January 20, 2021. REUTERS/Fabrizio Bensch/Pool/File Photo

"Anyone who just keeps pushing up fuel prices shows how indifferent he is to the needs of citizens," Scholz said.

As chancellor, Scholz would increase the minimum wage, tighten rent controls and maintain high public investment in greener and more digital infrastructure.

FINAL SPRINT

Scholz is counting on a final sprint which would see his party overtake the Greens to become the second-strongest party, enabling a coalition with the Greens and the Free Democrats (FDP).

"The closer the election comes, the more voters will look at who is actually running and who really brings the skills to lead this country through difficult times. And this is where Scholz can score against both Baerbock and Laschet," a close aide said.

Some observers have their doubts.

"This strategy is simply based on the principle of hope - namely hoping for the mistakes and weaknesses of the other candidates. And that probably won't be enough," said Albrecht von Lucke, a political analyst.

By presenting himself as the candidate with the most experience and as a continuity figure, Scholz is positioning himself as Merkel's natural successor.

"But that in itself won't work to attract centrist voters from the CDU as Laschet himself is far too much of a Merkel type," Lucke added.

Scholz's attacks on the CDU/CSU alliance over its ties to lobby groups could backfire as it might remind voters of Scholz's role in the bankruptcy of payments company Wirecard and a tax avoidance scandal at the Warburg bank.

Lawmakers grilled Scholz on both scandals, but failed to find a smoking gun. Scholz has denied any political interference or other wrongdoing.

As the coronavirus crisis fades, unexpected events abroad - such as the Gaza conflict or the Belarus airliner hijacking - could influence the German election.

"If something big happened, Scholz could score as he is perceived as the most experienced crisis manager," Lucke said.

This could hurt the Greens as Baerbock is seen as less experienced.

"But whether such a wild card effect in foreign policy would ultimately be enough to overtake Laschet, I dare to doubt very much," said Lucke.

(Reporting by Michael Nienaber; Editing by Giles Elgood)

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