Porsche’s Hometown Offers Clues to Germany’s Post-Merkel Future

When the Green leader of Germany’s third-largest state flouted Chancellor Angela Merkel’s coronavirus plan earlier this year, it was the latest sign that the former fringe party is confident enough to challenge the authority of her conservative bloc.

“I am fully in line with Merkel, but I have my own way,” Winfried Kretschmann said in a national TV appearance, explaining the move with a mix of independence and respect that’s cementing support among local voters.

In a state election on Sunday, the 72-year-old former student radical and anti-nuclear activist is on track to build out his advantage and secure a third term running Baden-Wuerttemberg -- an industrial powerhouse in Germany’s southwest known for fast cars and cuckoo clocks.

Porsche’s Hometown Offers Clues to Germany’s Post-Merkel Future

Current polls suggest Merkel’s Christian Democratic Union is set for its worst performance ever in the state. The historic defeat would come with the party on the back foot over a scandal involving claims of politicians profiting off the coronavirus pandemic. If trends continue, the Greens’ unusual strength in Baden-Wuerttemberg could be a sign of things to come.

CDU officials in Berlin fear the Greens could abandon their alliance in the state and instead form a coalition with the Social Democrats and the pro-business Free Democrats, according to people familiar with the party’s deliberations.

That would leave Merkel’s party out of government in Stuttgart -- the state capital and hometown of Porsche and Mercedes-Benz -- for only the third time since World War II, a tough setback ahead of September’s national election.

Falling out with the Greens in a region that represents about 15% of the German economy and 13% of the population could ultimately raise questions about the likeliest coalition in Berlin after Merkel steps down.

CDU officials are increasingly concerned that the “Merkel bonus” will evaporate as it moves closer to the September vote, especially if she continues to struggle with the pandemic, said the people, who asked not to be identified because the discussions are internal.

While similar three-way alliances are unlikely on the federal level, sidelining the CDU in Baden-Wuerttemberg would signal the Greens are ready to battle Germany’s biggest party for control in the post-Merkel era.

Porsche’s Hometown Offers Clues to Germany’s Post-Merkel Future

The scandal over allegations that politicians in Merkel’s bloc benefited financially from face-mask contracts is a significant blow. Two officials, including one from Baden-Wuerttemberg, have resigned in recent days, hitting the group just before the weekend’s elections.

Citizens of Rhineland-Palatinate are likewise voting on Sunday, and with corruption claims swirling, the CDU is expected to lose support in that SPD-led western state as well.

Porsche’s Hometown Offers Clues to Germany’s Post-Merkel Future

For the national election, the conservative bloc is also anxious about how voters will react to the group’s chancellor candidate. The choice -- which will make it even clearer that Merkel is no longer the face of the bloc -- is between the CDU’s new chief Armin Laschet and Markus Soeder, the head of the Bavarian CSU sister party. A decision is expected by late May.

Around the same time, the Greens will choose their own contender. Co-leaders Annalena Baerbock and Robert Habeck are both seen as capable challengers.

“We can perform miracles” and do nothing less than transform Germany, Baerbock said at a party convention in November.

The Greens -- who served as the junior partner to the Social Democrats under Gerhard Schroeder -- have surged in recent years, bolstered by widespread German concerns about climate change. They were briefly neck-and-neck with the CDU/CSU before the coronavirus crisis.

A successful run this election cycle could have a ripple effect across Europe and chart a path for other environmental groups to push for power.

The cornerstone of the party’s national campaign involves a plan to invest 500 billion euros ($600 billion) over 10 years -- equivalent to an annual boost of about 1.5% to Europe’s largest economy.

While the CDU squirms at the prospect of more borrowing, the Greens want to finance the transition to a clean economy by raising debt and taxing big tech companies and the wealthy, who tend to vote for the conservatives.

Kretschmann, a former school teacher and devout Catholic, played a key role in the party’s mainstream shift. He was the first Green state premier, when elected in 2011. Despite initial fears of anti-auto policies, his pragmatic approach has contributed to the second-lowest unemployment rate in Germany’s 16 states.

Porsche’s Hometown Offers Clues to Germany’s Post-Merkel Future

The party is now involved in 11 regional governments, but Baden-Wuerttemberg is the only coalition it leads.

Heading into the state’s vote, the Greens’ support has risen to 32% from 30.3% in the 2016 state election, according to a poll by INSA. The CDU, which once regular won majorities there, could decline to a new low of 25% from 27%.

Despite policy differences, Kretschmann is an advocate for an alliance between the Greens and the CDU/CSU on the national level. He says the mix could help in the fight against climate change, which will only be successful if it “promises prosperity and doesn’t create fear,” he said this week on ZDF television.

“Two important parties from different camps would come together,” Kretschmann said. “That’s not a bad thing in difficult times.”

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.