Eco-Nerds Go Mainstream, Driving German Greens to Brink of Power

(Bloomberg) -- When the scruffy Greens marched into German parliament nearly four decades ago in jeans and sneakers, they were sidelined and ridiculed. Today, they have a legitimate shot at governing Europe’s largest economy.

For the first time, the Greens overtook Angela Merkel’s ruling Christian Democrat-led bloc this month in polls to become the No. 1 political party. Robert Habeck, their stubble-cheeked co-chairman, would thrash Merkel’s heir apparent, garnering more than twice as many supporters saying they want him as chancellor.

With Merkel’s coalition government hanging by a thread, the possibility of a Green chancellor is a frequent topic of discussion in the streets, elevators and newspapers of the German capital. Born out of the anti-nuclear movement of the 1970s, the party is not nearly as radical as when it proposed in 1998 more than tripling gasoline prices or, in 2013, banning meat consumption in canteens every Thursday. But many investors still get the jitters at the thought of an environment-first party at the wheel of Europe’s most powerful country.

“The Greens are still in part a prohibition party that wants to use strict regulation to steer the economy,” said Carsten Brzeski, chief economist at ING Germany. “A Green-led government would be difficult for business to handle.”

The Green surge was fueled by their transformation from a group of eco-fanatics into a people’s party palatable to more Germans, especially educated urbanites. At the same time, they benefited from disillusionment with the ruling parties dragging their feet on issues from gender and income inequality to climate.

Indeed, Merkel’s protege and leader of the CDU party, Annegret Kramp-Karrenbauer -- widely known as AKK -- inadvertently pushed centrist supporters into the Green camp when she played up conservative values to lure back voters from the far-right AfD. Only days after hundreds of thousands of people participated in #FridaysForFuture pro-climate rallies, she ridiculed the movement saying her children wouldn’t be allowed to skip school to protest. She further antagonized German youth when she proposed tougher Internet regulation in response to a 20-something blogger who got over 14 million views for a video bashing CDU policies.

Christian Democratic campaign strategists are already worried about a possible duel between AKK and Habeck, said a person familiar with the matter, who declined to be identified because the discussion is private. Whereas the Green party leader is known as a down-to-earth speaker able to address concerns of mainstream voters, AKK has suffered a series of public mishaps. In a TV debate, AKK would most likely lose against the telegenic Habeck, the person said.

Unlike its radical roots, the current environmental party has proven pragmatic and shown it can balance pet issues with economic interests. In Baden-Wuerttemberg -- a traditionally conservative state in southwestern Germany and the heartland of the country’s auto industry -- Green Premier Winfried Kretschmann has governed since 2011. Now in his second term, he cooperates with the CDU as his junior partner.

A national Green government could potentially have far-reaching implications in transport, energy and other industries and would certainly “want to accelerate the coal phase-out,” said Coralie Laurencin, an energy analyst at researcher IHS Markit. That could mean a growing reliance on gas imports from Russia.

Stumbling Blocks

The Greens still have a long way to go to be able to claim power. Merkel has pledged to ride out her term until 2021, and fall elections in the three eastern states of Brandenburg, Thuringia and Saxony could stall the party’s momentum. Above-average unemployment, reliance on coal and resistance to immigration create tough conditions for the party, which languishes in fifth place in Saxony and Thuringia.

“There are still many stumbling blocks waiting for the Greens,” said Manfred Guellner, head of the polling institute Forsa.

Even if they don’t take power in the near future, the Greens have become a force to be reckoned with and will likely sway Merkel’s agenda. From family dinners to nightly talk shows, environmental topics have permeated public life in recent months and have become the number-one issue Germans care about, according to opinion polls.

Already there are signs the ruling party is reacting. In an unusual mea culpa, Merkel last week acknowledged her government had done too little to combat climate change. Only days after the Green party began targeting online retailers for the amount of returned goods they destroy, Merkel’s administration announced tighter regulation along the same lines.

Former Fringe

AKK took a different tack, reviving the alarmist strategy from years ago and underscoring concerns about her suitability to succeed Merkel.

“Those dreaming of a new government and voting for the Greens, need to know they may wake up with a left-wing party,” she told Bild am Sonntag newspaper.

While the government will do everything to show its tackling the environment issue, it could be too little too late to undercut the former fringe party.

“The current polls don’t allow a government without the Greens," said Sebastian Dullien, an economist at the University of Applied Sciences in Berlin. “A Green chancellor has moved entirely into the realm of the possible.”

--With assistance from Brian Parkin and Vanessa Dezem.

To contact the reporters on this story: Raymond Colitt in Berlin at rcolitt@bloomberg.net;Arne Delfs in Berlin at adelfs@bloomberg.net;Birgit Jennen in Berlin at bjennen1@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Chris Reiter, Iain Rogers

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