Merkel Challenger Jumps on Macron Bandwagon Promising EU Growth

(Bloomberg) -- German Social Democrat Martin Schulz said he would join France's Emmanuel Macron in leading an investment boom in Europe to buttress the region's economy if he's elected to replace Angela Merkel as chancellor in September.

President-elect Macron, a “reform-minded and ambitious” candidate, requires a “similar energy” from Germany to spur much-needed growth in the European Union, Schulz told a group of business leaders Monday at the Chamber of Commerce and Industry of Berlin.

“This year presents a unique opportunity to bring about the political conditions for this breakthrough,” Schulz, a former president of the European Parliament, told the group in the German capital. “Germany and France can once again become the engine of Europe. France has taken the first step.”

Coming off a stinging regional election defeat on Sunday as Macron celebrated victory, Schulz sought to regain ground ceded since he injected fresh momentum into his Social Democrats with his surprise appointment as Merkel's challenger in January. His challenge is to mark out his party's differences after four years of coalition with Merkel's Christian Democratic-led bloc.

Schulz, 61, a one-time bookseller, portrayed himself in the speech as a former businessman and political moderate who would work to increase public-infrastructure spending and overcome an investment logjam in Europe's largest economy. He also stressed his credentials as a committed European, saying Germany will only flourish within a functioning single currency and the EU's single market.

Attacks Schaeuble

Lambasting a tax cut promised by German Finance Minister Wolfgang Schaeuble for after the federal election, Schulz said he would engage in neither “unfulfillable social promises nor unfulfillable tax-cut promises.” As a Social Democrat, Schulz said he would adhere to his party's position adopted after World War II, embracing Germany's social market economy, which foresees “as much market as possible; as much state as necessary.”

Although Germany's SPD has yet to finalize an economic platform for the Sept. 24 ballot, Schulz called for stabilizing Germany's statutory pension system by establishing a lower limit for benefits and a cap on contributions. He also called for parity between employers and employees for health-care contributions, a policy that could raise costs especially for small businesses.

Polls suggest the Social Democratic surge that party witnessed under Schulz at the start of the year has subsided. The SPD is polling at 28-31 percent compared to 34-37 percent for Merkel's bloc.

Germany's Surplus

Schulz didn't explicitly address possible coalition partners should the SPD win the most votes in September, though he appeared to make a nod toward concerns among business owners that his party will align with the anti-capitalist Left Party.

“Under my leadership there will only be a coalition in Berlin that's pro-European and that's governed by economic reason,” Schulz said.

Schulz joined Merkel and Schaeuble in defending Germany's gaping trade surplus against critics -- including Macron -- whom he called “wrong.” Trade balance can be achieved in the long run by addressing the investment backlog, he said.

“We don't need to be ashamed of being successful,” Schulz said.“ Our exports are a result of the good work that's done in our country.”

To contact the reporter on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Tony Czuczka