What Worries Germany

But some of Germany's nervousness may be due to the way globalization is presented to them. In the 1990s, the big political parties urged Germans to knuckle under and absorb tough reforms in order to compete better in the global marketplace. Today they're more inclined to tell voters what they want to hear. The SPD, which suffered a series of electoral losses after its then Chancellor Gerhard Schröder introduced economic reforms in the early 2000s, now stresses its socially sensitive side. The centerpiece of the party's recent campaign was the call for a "decent and fair" nationwide minimum wage. Some SPD MPs have qualms about the proposal, but, as one senior SPD parliamentarian conceded — on condition of anonymity — the party had little choice if it wanted to win back core supporters after asking them to endure years of sacrifice. "You can only push the voters so much," he says.

One major catalyst for the shift to the left has been the advent in west German politics of the Left Party, or Die Linke. Though it has become home to dissatisfied former Social Democrats like co-chairman Oskar Lafontaine, the party has its deepest roots in the ruling communist party of the old East Germany, and until now its influence has been largely limited to east German states, where it draws up to 28% of the vote. The party advocates a generous welfare state and the redistribution of wealth; it sharply questions the advantages of globalization and opposes German military involvement in "new imperial wars" such as Afghanistan. The Left Party's ascent, analysts say, has pulled the larger SPD away from its more centrist positions. Its addition to Germany's roster of small parties also means a further splintering of support for the main parties, which could complicate future coalition-building.

Germany's leftward shift, political scientist Neugebauer says, places new strains on the grand coalition government in Berlin. More mindful than ever of their differences, the SPD and CDU are unlikely to agree to any major reforms before the next federal elections in 2009. The results of the state elections have given the SPD's controversial minimum-wage campaign a shot in the arm, increasing fears among some economists that the measure will be adopted — and could drive up unemployment.

All of which might sound like terrible news for Chancellor Merkel. In the German press, the win in Lower Saxony was overshadowed by the debacle in Hesse, where the Christian Democrats saw their share of the popular vote fall by 12 percentage points. But the blame was largely directed at Koch, whose promise to crack down on "young criminal immigrants" seemed to alienate moderate voters. Nationally, the CDU enjoys up to 40% support, compared to 30% for the SPD. And Merkel herself is still popular. Almost three times as many Germans say they would back her in a direct vote for Chancellor against her most likely SPD rival, party Chairman Kurt Beck.

But Merkel, too, feels the lure of the left. She protested during the recent campaign about car-company executives pulling down "American-style" compensation packages when workers were seeing only minimal wage increases — hardly a typical complaint for a conservative politician. And she has shied away from openly opposing the SPD's popular minimum-wage proposal, despite her party's qualms. Elga Bartsch, an economist at Morgan Stanley in London, says the government's unwillingness to push for more economic reforms is short-sighted, arguing: "Germany's politicians need to do a better job of explaining how the world has really changed." True enough. But if that explanation demands that German voters meekly accept what comes their way, they may not be in the mood to listen.