Why Chancellor Scholz is this government’s biggest problem

After the short Easter break, a little progress can be reported: The wordy search for who is responsible for Germany’s ongoing crisis has finally reached where it has belonged for more than a year: in the Chancellery. Respectively the Chancellor himself, thanks to Siegfried Russwurm.

“The seriousness of the situation is apparently underestimated in the Chancellery,” said the President of the BDI industry association this week with his colleagues in the “Süddeutsche Zeitung”. The conversations with the Economics Minister or the Finance Minister are regular and intensive, but “we often hear the quote from the Chancellor recently: ‘The complaint is the merchant’s song’.” In this way, one could “dismiss” the view of the economy, said Russwurm in frustration, but that’s the way it is: his association provides concrete reform proposals, “Answer from the Chancellery: none so far.” The BDI also made 442 suggestions for reducing bureaucracy, of which the government adopted eleven. Russwurm’s verdict on two years of the traffic light government under the leadership of Olaf Scholz: “They were two lost years – even if some of the decisions were made incorrectly beforehand.”

Now you always have to assume that industrial lobbyists have a certain degree of self-interest and opportunism, and a government doesn’t always have to implement everything that an industrial association demands all day long. Especially with the large industrial groups that are organized in an association like the BDI, the particular interest often takes precedence over the interest of the general public, including the general economy – see the high subsidies for individual chip companies (which Russwurm predictably defended).

Unusual billing

Nevertheless, it must be noted that association presidents and top managers are extremely reluctant to mess with the top boss; they would rather work on individual ministers. This fine differentiation is also clever because, despite all the criticism, you can hope that someone higher up, i.e. in the Chancellery, will always answer the phone if you really have an urgent concern. In this respect, Russwurm’s sharp reckoning with the Chancellor was actually unusual. His sentences reveal that the frustration in the economy runs deep – and that it is no longer tied to the usual fault lines, but rather specifically to a person and an office. As I said, this is a huge gain in honesty.

The motif of the absent chancellor basically runs through the entire period of government of this traffic light coalition. The SPD, FDP and Greens had barely been in business for six weeks when the first commentators were already asking: “Where is Olaf Scholz?” His absence was justified at the time – not incomprehensibly – by the more pressing problem of war and peace in Europe, which required a lot of diplomacy beyond the cameras and microphones. But if one is honest, the absence of the Chancellor has remained a fundamental puzzle (and fundamental problem) of this coalition, which can no longer be explained away by more important tasks.

Rather, Scholz’s silence about the various conflicts in his coalition over the past year has taken on something surreal. All the small-scale discussions and arguments always ran along fairly predictable lines of conflict: Lindner against Habeck, Lindner against Paus, Habeck against Wissing, and so on. Only the top boss, who is supposed to hold it all together and lead it and whose favorite sentence recently is: “I have decided that…” – he did not play a major role in the tiring bickering of his coalition partners.

Scholz lets things go

It is obvious that Scholz’s demonstrative restraint is often not due to his great wisdom, which he likes to boast about, for example in the conflict with Russia and possible arms deliveries to Ukraine. A simpler motive is more likely: he obviously has no idea, no plan or orientation on many issues himself, and if he does have them, he keeps them to himself because he doesn’t know how to use them in his SPD, in its traffic light alliance or in interaction with the opposition and the states.

You can even sort the controversial topics that fill the news almost every day according to this: Of course, the former Labor and Social Affairs Minister Scholz knows that in an aging society, state pension benefits cannot be continually expanded because otherwise the system would become unfinanceable. Of course, Scholz also knows that a state transfer system like the new citizens’ money will have acceptance problems if the benefits are too generous. But he allows the opposite to happen because he has bowed to his SPD, which only comes with this program, but which he cannot do without.

Scholz will also know that a project like the tiresome basic child welfare system no longer fits the times when money is tight everywhere and the planned additional expenditure flows primarily into the development of new administrative structures and not into better services. But he lets things go because he doesn’t want to annoy the Greens and actually has to fear their foreseeable retaliation when it comes to pensions, true to the old balance of terror according to which this coalition works: an eye for an eye, a tooth for a tooth.

And Scholz – despite his offer for a “Germany Pact” from last autumn – fails to win over the opposition for a major state reform: a reform of public administration, new structures in federalism and finances between the federal and state governments. All of this would be a prerequisite for a really major reform package that would reduce bureaucracy, simplify administrative processes and create financial scope for investments and tax relief. In other words, the economic program that would improve the general conditions in Germany and bring reliability that so many companies are urgently waiting for.

The finance minister alone cannot do this, nor can the economics minister. It would be Scholz’s job alone. Unfortunately, based on the experiences of the past 24 months, it is unlikely that he will actually take up this task again.