It was the latest shock: On June 26, Munich's Ifo Institute slashed its forecast for German growth by almost half, to 1.2%. But for the center-right Christian Democratic Union, the grim headlines have a silver lining. Probably only a downturn offers the once dominant CDU a chance to unseat Gerhard Schroder, the popular Social Democratic Chancellor in elections late next year. It's little wonder that CDU Chairman Angela Merkel has been trying to sell herself as an economic fixer-upper. On June 22, she unveiled a plan to revive growth with measures such as accelerated tax cuts and less regulation of the workforce.
But Merkel may have trouble convincing voters that she can lead the country out of its funk. The pastor's daughter from East Germany was supposed to be the new face of the CDU. Instead, her tenure has been marked by intraparty squabbles and a general sense of drift. Schroder, meanwhile, has successfully pulled off tax and pension reforms, stilled opposition in his ranks, and achieved high popularity with voters. "Schroder looks unbeatable," says Andreas Kiessling, a political scientist at the University of Munich's Germany Research Group. "But," he adds, "no one can say how it will look in a year."
The decelerating economy may yet sap Schroder's strength. Already, support for his SPD has fallen below 40% for the first time in a year, according to Berlin's Forsa institute. But is Merkel the CDU's best hope to dethrone him? There are growing signs that conservatives will turn instead to Edmund Stoiber, prime minister of the state of Bavaria. His strongman image and pro-growth record could tap voter longing for a decisive leader if conditions continue to slip. "This could be Stoiber's hour," says Oliver Krieg, director of political research at Emnid, an opinion research firm in Bielefeld.
"PRINCE." Stoiber already beats Merkel in the polls. According to Forsa, Merkel would muster 28% of the votes vs. Schroder's 52%. Stoiber would lose, too, but he scores 34%, vs. 47% for Schroder, and the elections are a long time off. Besides, most other CDU leaders have been tainted by the party's campaign-finance scandal and are not expected to run. In a recent Emnid poll, 76% of German conservatives think Stoiber would mount the best challenge to Schroder. There will be a party convention early next year to choose a candidate.
That's an amazing turnaround for Stoiber. He was once considered too conservative and too, well, Bavarian to be a national candidate. He's known as the "prince" of Bavaria, whose people are still stereotyped as coarse country folk in lederhosen who drink wheat beer with breakfast. Besides, Stoiber technically doesn't even belong to the CDU. He is head of the Catholic Christian Social Union, which exists only in Bavaria and makes common cause with the CDU at the national level.
So the shift toward Stoiber shows just how scared the CDU is of a rout in 2002. It isn't just the chancellorship that's at risk. Without a strong lead candidate, dozens of parliament members could lose their seats.
Stoiber, 59, earned a tough-guy image and a national reputation in the '90s with calls to limit immigration and skepticism about the euro. He has toned down the rhetoric in recent years, and his Bavarian roots could help. Bavaria's unemployment rate is about 5%, half the national average. Prime minister since 1993, Stoiber can take some of the credit for turning Bavarian cities such as Munich and Nuremberg into high-tech and media centers. He has given startups cheap loans and cut red tape. He would also lure business support with his calls for deeper tax cuts and deregulation of labor, which he proposed before Merkel.
So far, Stoiber has made no overt campaign moves. That may represent genuine reluctance, but it's also smart politics. Earlier Merkel challengers such as Friedrich Merz, head of the CDU delegation in parliament, damaged their chances by appearing disloyal.
Months of maneuvering lie ahead before the CDU picks its candidate early next year, and analysts figure Stoiber won't agree to be a designated loser like Britain's William Hague, the Tory who lost so miserably against Prime Minister Tony Blair in the June election. Stoiber will run only if he thinks he can win. It's a long shot now, but a year is forever in politics. This prince knows how to get power--and keep it. By Jack Ewing in Frankfurt