A screen displays the Christian Democratic Union (CDU) logo during a campaign rally ahead of Hesse state election in Fulda, Germany. (Photographer: Krisztian Bocsi/Bloomberg)

BlackRock's Merz Joins Race to Succeed Merkel as Party Head

(Bloomberg) -- Friedrich Merz, supervisory board chairman of BlackRock Inc.’s German asset management unit, joined the race to lead the country’s biggest party as Chancellor Angela Merkel steps down from the post.

Merz’s candidacy signals a bid to shift Germany’s Christian Democratic Union toward a more socially conservative stance after many of Merkel’s critics said she moved the party too far to the left, losing core voters. An ally of the party’s pro-business wing, Merz also heads a public-policy group committed to boosting ties between the U.S. and Germany.

“We need a new start and renewal in the CDU, with experienced as well as younger leadership,” Merz, 62, said in a statement on Tuesday. “I’m prepared to take responsibility.”

After dominating German politics since World War II, the CDU is being squeezed by the polarization that’s driving voters both to the Green party and the anti-immigration Alternative for Germany. Hobbled by a refugee crisis that provoked a nationalist backlash, Merkel bowed out as CDU chairwoman on Monday and said she won’t seek a fifth term as chancellor in 2021.

Merz, a Merkel adversary since she defeated him for a top party post 16 years ago, adds to a growing field of contenders that may set off a battle for the party’s soul at a convention in December.

Convention ‘Showdown’

Also in the running are Health Minister Jens Spahn, a critic of Merkel’s open-borders migration policy, and CDU general secretary Annegret Kramp-Karrenbauer, a Merkel protegee who’s considered the chancellor’s favored candidate.

“It’s going to be a real showdown,” Josef Janning, senior fellow at the European Council on Foreign Relations in Berlin, told Bloomberg Radio. “The real battles are won at the center, not on the fringes.”

From his perch outside politics, Merz has repeatedly criticized Merkel’s policies and remains popular in parts of the CDU. He’s known for once presenting a plan to simplify Germany’s income-tax system so it would “fit on a beer coaster.”

Merkel made an enemy of Merz in 2002 when, two years into her run as CDU chairwoman, she ousted him as parliamentary caucus leader. With the Social Democrats in power at the time, that made Merkel the opposition leader, a position she used as a springboard to the chancellery three years later.

Atlantic Bridge

After Merz left politics in 2009, he went into business and became head of “Atlantik-Bruecke,” a group of influential policy makers and executives that’s committed to boosting ties between the U.S. and Germany. He’s held the BlackRock post in Frankfurt since 2016.

He caused a stir as CDU parliamentary leader in 2000 when he embraced the political slogan “Leitkultur,” a German word referring to the need for a dominant culture in the nation.

In February, Merz blasted Merkel’s latest coalition government deal with the Social Democrats as a “humiliation” for the CDU for accommodating too many of the junior partner’s policy goals.

He’s committed to the trans-Atlantic partnership, a factor that still counts for many in the CDU and could provide a bridge to the Trump administration.

“Friedrich Merz is probably one of the best connected Germans in Washington,” said Jan Kallmorgen, head of Berlin Global Advisers, a political-risk consultancy. That “could be helpful for Merkel’s international role,” despite their animosity, he said.

©2018 Bloomberg L.P.