Schröder Fires Himself

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What shall it profit a politician if he saves his economy but loses his job? With apologies to St. Mark, that's the dilemma faced right now by Gerhard Schröder. For the past several months, rank-and-file members of the German Chancellor's Social Democratic Party (SPD) have become enraged by the extremely necessary but extremely painful economic and labor reforms Schröder has pushed into law. "We have lost the confidence of our core voters," said Heiko Maas, the party leader in Saarland. Nearly 40,000 SPD members resigned from the party last year in protest. Last week, Schröder tried to stop the revolt by announcing that he is stepping down as the party's chairman — a wrenching move for so resourceful a politician. "I am not happy about giving up this office," he said, "but it is in the interest of the reform process in Germany."

Schröder is stepping down because the SPD faces humiliating defeats at the polls. There are 14 local, state and national elections in Germany this year — the first is a state ballot in Hamburg on Feb. 29 — and the party looks headed for disaster. According to a Forsa poll published last week by the magazine Stern, only 24% of voters support the SPD nationally — its lowest numbers since the 1950s — while 49% support the opposition Christian Democrats. "There were too many things that Schröder could not fulfill," says Peter Lösche, a political scientist at the University of Göttingen. "He could not meet the challenge of being Chancellor, being an international figure and steering the party through stormy times."

The vote in Hamburg, once considered a bastion of SPD support, will be an early measure of the looming SPD disaster. The CDU, which has ruled the city-state since 2001, leads the SPD by 48% to 28%, according to the Forsa poll. "We need a clear signal [from Schröder]: what reforms are still important," says Thomas Mirow, the SPD's leading candidate in Hamburg, who is trailing his CDU opponent in the polls.

In addition to Schröder's resignation, the secretary-general of the party, Olaf Scholz, is also leaving his post. Scholz has been an inept party leader prone to rhetorical gaffes. Last month he caused an uproar when he said that the party had already accomplished all its important reforms, a mistake that Schröder had to correct publicly. Replacing Schröder at the party's helm is Franz Müntefering, the current head of the SPD's faction in parliament. Not only is Müntefering an old hand at the SPD's convoluted politics, but he is not thought to harbor ambitions to become Chancellor himself, and thus poses no threat to Schröder.

By handing the reins of the party to Müntefering, Schröder hopes to get a more effective leader to deal with party rebels, including old-fashioned leftists who still believe in socialism as well as hard-line trade unionists. "In the middle term, the party will have to make more concessions to the left wing," said Ralph Solveen, an economist at Commerzbank. Jürgen Peters, the chairman of the giant IG Metall trade union, argues that the party has taken the wrong approach. "What is necessary is a policy that puts more emphasis on linking social reforms to social justice than it has done so far, and which puts the promotion of employment at the center," Peters said.

Schröder's reforms, adopted just before Christmas last year, hit hard at traditional SPD voters, especially union members and the elderly. He froze pension payments for a year, cut long-term unemployment benefits as a way to force the jobless to accept work, made it easier for companies to lay off employees, and imposed a quarterly €10 payment for visits to the doctor. The idea was to help lower state health-insurance costs, but it has worked far better than was planned: the number of doctor visits declined sharply in January, but there has as yet been no reduction in insurance premiums as promised.

Not surprisingly, the opposition depicted Schröder's resignation from the party chairmanship as a sign of weakness. "This is the beginning of the end of the Schröder government," said Angela Merkel, the cdu chairwoman. "It's a day of failure." Newspapers have been speculating that Schröder will take additional steps to shore up the government, possibly including a cabinet reshuffle. It has been suggested, for example, that Schröder might replace Finance Minister Hans Eichel, whom the public blames for many of the painful economic cutbacks. What's worrying is that economic experts believe Schröder's reforms last year were only a first step — and that a much more thorough dismantling of the welfare state is still needed. But the opposite message seems to be winning out. Schröder abandoned a reform of nursing care last month, saying the public's "pain threshold had been reached." If that's true, Schröder's pain may have only just begun.