Germany’s Kingmaker Demands High Price to Crown Scholz

(Bloomberg) -- Germany’s Free Democrats stopped short of ruling out a coalition with front-runner Olaf Scholz, but the chairman of the pro-business party made it clear that the price for any alliance with the Social Democrats would be steep.

The comments show that Scholz’s unlikely surge to become the favorite to succeed Angela Merkel after the Sept. 26 election doesn’t mean his path to the chancellorship will be easy. With a fragmented political landscape after 16 years of Merkel rule, polls show that Scholz’s best shot to form a government is a cumbersome three-way alliance with the Green party and the FDP.

The SPD and the Greens have “completely different perspectives, completely different policy content” from the FDP, Christian Lindner, the party’s chief, said in a Bloomberg webinar on Thursday. An agreement would require “a lot of concessions” and is “not very realistic.”

“Mr. Scholz would have to make an attractive offer,” Lindner said, declining to specify his conditions. “For us, policy content is the decisive factor. There is no automatic tendency for one coalition or another.”

The gamesmanship underscores the reemergence of the FDP’s historic role as kingmaker in German politics. Although the party’s tax-cutting and budget-tightening agenda aligns more easily with Merkel’s Christian Democrat-led bloc, the FDP has supported four conservative and two Social Democratic chancellors since the end of World War II.

Even if an SPD administration with the Greens and FDP were possible, Scholz would face challenges in imposing his campaign promises to loosen Germany’s fabled fiscal discipline, raise taxes on the wealthy and ratchet up spending for infrastructure, climate protection and social programs.

In the final weeks of the campaign, Lindner said the party’s aim is to narrow the gap with the Greens, giving the FDP more leverage for coalition negotiations that will begin after the vote and could drag on for months.

“It’s up to the FDP to ensure that Germany will continue to be governed from the center and prevent a leftist shift,” the 42-year-old said, invoking warnings from the CDU-led bloc that Scholz could steer the country away from the political center by forming a government including the anti-capitalist Left party.

A potential prize for Lindner would be the Finance Ministry. The FDP chief rebutted a question on whether he’s eyeing the role, but drew a distinction with the Greens, saying the No. 3 party in the polls wants to “raise the tax burden” and loosen debt restrictions. That’s a clear contrast to the FDP’s preference for lower taxes and adhering to constitutional restrictions on debt.

Lindner repeated that his preference is for a government under CDU leader Armin Laschet, who’s lost his footing during a gaffe-prone campaign.

Despite the FDP’s conservative profile and internal pressure to swear off a coalition with the SPD and the Greens, Lindner -- who’s led the party since 2013 -- could come under pressure to back down if Scholz secures a clear mandate from voters.

Four years ago, Lindner torpedoed Merkel-led talks to form a three-way coalition with the Greens. Justifying the move, he declared at the time that “it’s better not to govern than to govern badly.”

His decision prompted grumbling in parts of the FDP and more than three months of further talks before the Social Democrats reluctantly joined another “grand” coalition. Lindner has vowed to return his party to government and could ill afford giving up a decision-making role for a second time.

The FDP once played the role of the third force in German politics. After supporting Chancellors Willy Brandt and Helmut Schmidt of the SPD over 13 years, the party switched sides in 1982 to back a CDU-led government, lifting Helmut Kohl into office until 1998. Merkel also governed with the FDP from 2009 to 2013.

An energetic speaker, Lindner took over the party following the collapse of the FDP’s support, resulting in the end of its coalition with Merkel and its ouster from the Bundestag. In 2017, he led the party back into parliament, and support has held at around 11% in recent months -- in line with its most recent result.

(Updates with new box on policy positions)

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.