analysis
Showdown in the Bundestag
Appearance of a driven man: The Chancellor must now deal with these seven problems
Chancellor Olaf Scholz: Under pressure even within his own ranks
© Kay Nietfeld / DPA
The economy? Isn’t picking up. His own party? Is constraining him. In the midst of what is probably the most difficult phase of his chancellorship, Olaf Scholz has to explain his course in the Bundestag at midday. And that too.
Summer holidays. What most Germans are probably thinking about right now is far away, very far away, for the Chancellor.
He has just a few days left to draw up a budget for the coming year with Christian Lindner and Robert Habeck. The cabinet meeting on July 3 is already being canceled by the traffic light coalition. What is actually the normal business of a government has become a squaring of the circle for Scholz. It is important to save money and get the economy going, to reshuffle jobs, but not to alienate anyone again like the farmers recently did, to comply with the debt brake and still appease the SPD.
His party is particularly nervous at the moment: it is slipping further and further in the polls, the east is facing serious bankruptcy in the autumn, and extremist politicians have established themselves on both the left and the right, poaching in the social democrats’ circles. So much for the situation in which Scholz has to make his government statement in the Bundestag at midday. Actually, he is speaking about the upcoming European Council and NATO summit, but of course the budget is also supposed to play a role, as we hear. It is the appearance of someone driven.
Where is he under pressure? And where does he have to deliver?
The faction frustration
When Olaf Scholz stands at the lectern, he will look into the expectant faces of his faction. In an unprecedented move, the three very different SPD wings have formulated a common stance in the budget tussle – and with it a not very subtle task for Scholz. In a joint statement, special investments and a renewed suspension of the debt brake are called for – all things that the FDP rejects. This makes a compromise more difficult and puts the Chancellor under pressure in the negotiations. The faction currents assert that they are united in supporting Scholz. Does Scholz see it that way too?
The basic bubbling
And if it does end up being a budget cut? Then we’ll just vote against it. At least that’s what the SPD party leftists from the “Forum DL21” have in mind, which is currently preparing a member’s petition on the budget: If there are sensitive cuts in areas such as education or affordable housing, then the SPD cannot agree to the budget. Before all party members can vote, a number of hurdles still have to be overcome, explained co-initiator and DL21 board member Jan Dieren in the star-Interview. But the message to the Chancellor is already clear: He should not take any chances.
The trouble with the economy
Scholz has been at loggerheads with the business world for months, and industry boss Siegfried Russwurm recently complained about “two lost years”. What the CEOs want: lower taxes, less bureaucracy, more investment. What Scholz says about this: It’s our turn, but unfortunately it won’t happen overnight. The Chancellor is annoyed by the lamentations from the business world, but without a better relationship with the managers, his re-election is unlikely to work. They have long been eyeing CDU leader Friedrich Merz as a possible partner.
The many company bankruptcies
When it comes to the economic situation, the Chancellery is practicing whitewashing. Inflation? Down. Purchasing power? Up. Things are getting better – that is the tenor in Scholz’s camp. Unfortunately, just in time for his appearance, a new shocking figure made the rounds. Company bankruptcies have shot up: 11,000 bankruptcies were counted in the first half of 2024, 30 percent more than in the same period last year. The fact that the traffic light coalition is deciding on an “economic turnaround” as Christian Lindner wants is suddenly also in the Chancellor’s interest.
The unwieldy coalition partner
An economic turnaround is all well and good – but it doesn’t plug a budget hole. And that remains the Chancellor’s core problem. He needs an agreement on this in the traffic light coalition, otherwise that’s it for the government. The Greens and SPD have lots of ideas about how to get new money, special funds, exemptions from the debt brake. But Lindner and the FDP are blocking anything that looks like budgetary trickery. This is already about the next election campaign. Governing may be exhausting. But we stand by our principles, that is the liberal message.
The poor overall mood
Try it: type “Olaf Scholz” and “confidence” into Google – you will be amazed at how often the Chancellor advises, calls for or promotes this. This may well be necessary, as the many crises are weighing heavily on society’s mood, especially before the three state elections in East Germany, which, according to the polls, suggest ill fortunes for the comrades. And what if the head of government is also moaning…?
But it could also be Scholz’s optimism. The weak result in the EU elections was a blow to all the traffic light parties, especially the SPD. No one there wants to go into the election campaign with a budget cut. No one needs more bad vibes, and Scholz certainly doesn’t.
The missing Plan B
The traffic light leaders had already given the impression that they were prepared for anything and had a plan B in their pocket. Well, then the budget hammer fell from Karlsruhe and the coalition fell into a deep crisis. Scholz was also taken aback by the verdict. So: where is the plan B now?
That’s what SPD MP Tim Klüssendorf wanted to know from the Chancellor in an internal parliamentary group meeting. But this time, the stakes are much higher. If the budget doesn’t work out, then this coalition probably won’t work out either – the scenario of new elections is floating around Berlin. After the damned EU election campaign, the only question is whether the SPD is prepared for an election campaign soon. Impression: probably not.