August 24, 2005

Schroeder comeback fizzles as German vote nears

By Noah Barkin

MAGDEBURG, Germany (Reuters) - A grinning Gerhard Schroeder
leapt onto a giant stage in this 1,200-year-old German city on
the River Elbe this week to thumping music and applause from
several thousand Social Democratic (SPD) supporters.

But by the end of his 40-minute stump speech, loud whistles
and jeers from a distant fenced-off crowd of angry protesters
had drowned out the cheers and twisted the German chancellor's
confident smile into a tense glare.

With only weeks to go until a September 18 election that
Schroeder himself brought forward by a year, the chancellor is
still hoping for the kind of dramatic eleventh-hour comeback
that won him a second term three years ago.

Then, voters looked beyond high unemployment and rewarded
Schroeder for his opposition to the Iraq war and deft handling
of floods in east Germany. But with today's voters firmly
focused on economic issues, his message is falling on deaf

This was underscored at his speech in Magdeburg, where
Schroeder reminded voters once again of his Iraq war stance and
suggested that a conservative government led by his rival
Angela Merkel would have sent German troops to Baghdad.

"Everyone appreciates the position he took on Iraq but it
simply isn't as important now," said Mona, 24, an industrial
engineering student who joined friends in Magdeburg's central
square to listen to Schroeder.

"People want to hear about domestic issues like jobs, and
on that he seems to have run out of things to say."


Opinion polls over the past week have offered Schroeder few
reasons for optimism. After steadily narrowing the gap with
Merkel's Christian Democrats (CDU) for much of the summer, the
SPD campaign seems to have hit a wall.

The CDU's advantage has stabilized at 12-14 points and the
party has even seen a recent improvement in some surveys -- a
sign that Bavarian premier Edmund Stoiber's recent disparaging
comments about east Germans have done them little damage.

Meanwhile, Merkel's bold move to name radical tax reform
advocate Paul Kirchhof as her shadow finance minister looks to
be paying off.

"Germany's chancellor-in-waiting Angela Merkel seems to
have regained the political initiative," wrote Bank of America
economist Holger Schmieding in a research note on Tuesday.

Many in Magdeburg, a city of 232,000 in the former
communist east where one in five people are without work, seem
willing to give Merkel -- herself an easterner -- a chance.

In 2002, voters in the city, the state capital of
Saxony-Anhalt, solidly backed Schroeder. But last year
Magdeburg became a focal point for protests against his labor
market reforms.

Steffen Ruetzel, a 26-year old doctoral student in
economics, said he now believed the CDU was the only party
capable of getting Germany out of its economic predicament.

Unemployment is hovering near post-war highs at 11.6
percent of the workforce and despite recent signs of a pickup,
the economy is only expected to grow by 1 percent this year.

"If the CDU can push through their reform program, they
have a chance of improving things," Ruetzel said after
listening to Schroeder. "Schroeder is trying to divert
attention to other issues because his ideas on the economy are

Schroeder's feisty speech on Monday evening demonstrated he
will not go down without a fight.

Many Germans are now focusing on a televised debate between
Schroeder and Merkel on September 4 as the chancellor's last
chance to breathe life into his struggling campaign.