Merkel in Danger as Fight to Succeed Her Runs Out of Control

(Bloomberg) -- A 1920s-themed Berlin ballroom packed with several hundred supporters was the unlikely stage for Chancellor Angela Merkel’s conservative nemesis to unveil his comeback bid.

“I’m ready to do this,” Friedrich Merz told the audience when someone asked whether he was going to enter the race for the leadership of Merkel’s party and run to succeed her as chancellor in Germany’s next election.

The supervisory board chairman of BlackRock Inc.’s German unit, who is leaving the post to focus on politics, sprinkled his speech late Thursday with criticism of Merkel’s climate policy and her response to European proposals by France, suggesting she’s too cautious. He also expressed “a lot of respect” for the four-term chancellor, who has said she won’t run again in 2021.

Still, there’s no mistaking it: Merz is back and that’s bad news for Merkel. Her plan to serve out her term through 2021 may run into trouble if her longtime critic finally wins the party chairmanship. And it’s not the only risk. Another leading contender -- Health Minister Jens Spahn -- has also gone on the attack, with Merkel seen as weakened by the collapse of her succession plan.

Merz, 64, comes from the conservative wing of the Christian Democratic Union and has been a harsh critic of Merkel’s more centrist approach ever since she fired him as her caucus leader in 2002.

His first comeback attempt failed in 2018 when he narrowly lost the contest for the CDU leadership against Merkel’s protege Annegret Kramp-Karrenbauer. Now, the chance for revenge is coming into sight again.

Merkel’s team is alarmed about the prospect of Merz becoming party leader, according to one official with knowledge of their thinking. They are hoping that North Rhine-Westphalia state premier Armin Laschet will strike a deal with Spahn to avoid an open power struggle.

What worries Merkel is that Merz could force an unpredictable three-way contest by seizing the initiative early and pressing his claim with members, the official said.

Adding further complexity to the situation, Spahn -- a frequent Merkel critic in the past -- is giving no signs of playing nice. He called on the CDU to emancipate itself from Merkel.

“We have to look forward”, Spahn said in an interview with Spiegel magazine. “After so many years marked by Angela Merkel, the CDU has to learn to walk again.”

His choice of words is highly provocative, as they echo Merkel’s 1999 attack on Helmut Kohl, when the former chancellor was damaged by a party finance scandal. Her assault at the time contributed to his downfall and paved the way for her rise.

Polling Tension

Merz has an early edge in the race. Seven out of 10 CDU supporters see him as a good chancellor candidate, and across the political spectrum he’s ahead of his rivals with 40% approval, compared with Laschet’s 30% and Spahn’s 24%, according to an Infratest dimap poll conducted for public broadcaster ARD.

Still, just tossing Merkel aside would be dangerous. Given her public support, the CDU could lose about 2.4 million voters, or nearly a quarter of its support, after she steps down, according to a Forsa poll published in German business newspaper Handelsblatt.

Parliamentary President Wolfgang Schaeuble, the elder statesman of German politics, said the CDU should stick to the process laid out by Kramp-Karrenbauer.

“She will now talk with all those within the CDU who have shown interest,” and then discuss the situation with the Bavarian sister party, he said in an interview with Deutschlandfunk radio on Friday. The former finance minister, who supported Merz in the party leadership race in 2018, didn’t want to publicly voice his support for Merz when asked by the interviewer.

After returning to his BlackRock post after his defeat by Kramp-Karrenbauer in December 2018, Merz has continued to snipe at Merkel’s leadership.

Her “passivity and lack of leadership” are hanging over Germany like a “fog,” Merz said in October after the party suffered historic losses in elections for the eastern state of Thuringia. “I just cannot imagine that this way of governing in Germany will go on for another two years,” he said.

It’s also difficult to imagine Merkel remaining chancellor long if Merz takes control of her party machinery.

Pro-Market Reputation

A succession that looked stitched up for Merkel loyalist Kramp-Karrenbauer was blown wide open this week when the fallout from that defeat in Thuringia prompted Kramp-Karrenbauer to resign. As local parties maneuvered to piece together a majority in the fragmented state legislature, the CDU ended up voting alongside the far-right Alternative for Germany, or AfD, for the first time ever.

The incident triggered nationwide outrage and when the local party leader brushed off Kramp-Karrenbauer’s attempts to bring him into line, Merkel was forced to step in and restore order.

From Merkel’s perspective, the best candidate would be Laschet, a moderate who would most likely continue her liberal policies on refugees and workers’ rights. But Laschet, who stayed out of the last race, has not signaled whether he will run. If he did, he would risk his position as premier of Germany’s most populous state.

Merz, in contrast, has nothing to lose. Already wealthy from his business career, he has announced he’ll step down from BlackRock at the end of March.

As CDU leader, he would push for a much more market-oriented economic policy and restrictions on immigration. During his first campaign about 15 months ago, Merz pledged to regain voters lost to the AfD by focusing on Germany’s national identity.

Under Kramp-Karrenbauer, the opposite happened. The AfD made inroads in a series of state elections in eastern Germany while the CDU descended into infighting over how to respond to the threat.

In a sign that he’s already taking on the challenge, Merz will speak at a traditional CDU event in Thuringia on Feb. 26 marking Ash Wednesday, putting himself at the epicenter of the crisis that opened the door for his return.

©2020 Bloomberg L.P.