Quo Vadis, CDU?

Ever since the CDU was kicked out of office by current Chancellor Gerhard Schröder’s Social Democrats, the party has been lacking a coherent strategy — especially when it comes to the economy.

The root causes for this go back quite a ways. During his 16 years as Chancellor, Helmut Kohl had one preferred way of fighting off any challenges by the opposition. He successively moved the CDU from the moderate right to the political center — and then from there further to the left on economic matters.

This creeping “social democratization” of the CDU’s economic agenda ensured that voters received the goodies an SPD government would have offered them — while everybody could delude themselves that the “conservatives” were in power.

But what once appeared to be a shrewd tactic for preserving their political power has now come back to haunt the CDU.

The party has clearly lost its profile as Germany’s market-oriented party on economic matters — and has become virtually indistinguishable from the old-line Social Democrats.

You would think that, now out of power, it would be in the best interest of the party to “re-invent” itself and aggressively reposition its economic platform to the right of the SPD. But the new CDU leadership — led by Angela Merkel, an member of the Bundestag from the former East Germany — apparently has decided that such a bold move is not in the party’s best interest.

It looks as though the CDU would rather position its economic agenda to the left of the SPD’s new, very pragmatic course on issues ranging from tax reform to work permits for highly skilled foreigners.

Just consider this recent statement by Merkel: “Competition is neither good or bad.” Such an utterance, coming from the conservative party leader in the world’s third-largest economy, should set off alarms around the globe. It surely doesn’t sound like a conservative speaking. Even most left-of-center parties today would agree that, on balance, the benefits of competition far outweigh the costs.

The central question, of course, is this: What does it mean for Germany if the CDU indeed stays to the left of the SPD? The short answer — and the one that is potentially ominous for the rest of Europe — is that badly needed economic reforms in Germany are likely dead in the water.

Not only would the reformers in Chancellor Schröder’s SPD — such as Finance Minister Hans Eichel — have to fight the old-timers in their own party. They would also have to battle a CDU intent on slowing down the market-oriented modernization of Germany’s economic structures. The CDU’s not-so-subtle move to the left must be all the more astounding to corporate Germany, which — at least in the past — has viewed the CDU as its main political ally.

The bottom line is that the CDU might pick up some votes by advocating more populist economic policies,as the SPD once did when it was the minority party. But, in the middle and long term, it will lose its identity as a conservative party. Why vote CDU if you can just as easily get “the real deal” from the SPD?