Oct. 1 (Bloomberg) -- German Social Democrat Peer Steinbrueck attacked Chancellor Angela Merkel’s austerity-focused euro-crisis policy after he was nominated by party leadership to challenge her in next year’s election.
Promising that “it won’t be a boring campaign,” Steinbrueck took issue with Merkel’s Christian Democratic-led government as burdened by coalition infighting and bereft of orientation. While conceding Merkel’s popularity, Steinbrueck pledged that the SPD will bolster bank regulation and ensure equality with a “renaissance of the social market economy.”
Merkel’s Cabinet “is one of the worst -- if not the worst -- in the history of the Federal Republic,” Steinbrueck told reporters today in Berlin. “That the chancellor has remained relatively above the fray lies in a very clever maneuver in which she has elevated herself presidentially.”
Steinbrueck, the 65-year-old former finance minister who spearheaded bank rescues in Merkel’s first government, will face an uphill climb in challenging the popular chancellor in elections late next year. The SPD’s leadership selected Steinbrueck unanimously after two other possible candidates, former Foreign Minister Frank-Walter Steinmeier and SPD Chairman Sigmar Gabriel, decided not to run.
A party congress will ratify the choice in December.
Steinbrueck pilloried Merkel’s crisis-fighting agenda as too focused on the “symptom” -- gaping public debt -- rather than the causes of the three-year-old debt crisis.
“Certainly, state debt is an issue, but concentration of the entire analysis on sovereign debt doesn’t embrace the entire problem in Europe,” Steinbrueck said. “We’re dealing with huge divergences in competitiveness, in structural challenges.”
He said a “large part” of the crisis has to do with bank failures and touted again his plan for more aggressive bank regulation, including a separation of banks’ investment banking and deposit businesses; a ban on naked short selling; and stiffer rules for hedge funds and private equity.
While Steinbrueck stopped short of ruling out another “grand coalition” with Merkel’s CDU-led bloc, he said the SPD won’t seek out a combination “we neither strive for nor want.” The party’s aim is to lead a government with the Green Party, reprising a combination led by former Chancellor Gerhard Schroeder from 1998 to 2005.
Steinbrueck identified a “certain lack of principle” in Merkel’s government, borrowing a party colleague’s metaphor during the 2005-2009 grand coalition of the chancellor piloting a plane -- “technically, she controls the plane excellently.”
“I can sleep well and I feel very safe,” Steinbrueck said. “But I don’t know where I’m going to land with her.”
Former Deutsche Bank AG Chief Executive Officer Josef Ackermann told ARD television last night that Steinbrueck’s bank plan to separate businesses risks damaging German lenders.
“If Germany goes it alone, it would damage German banks on the world stage,” Ackermann said late yesterday. “The rating would suffer. It requires other funding and you don’t have the safety and stability of the entire banking system.”
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