SPD duo aim to lead Germany out of 'neoliberal wilderness'

Germany’s centre-left Social Democrats (SPD) should seek a path out of the “neoliberal wilderness” and pull the plug on their support for Angela Merkel’s government unless it loosens its purse strings and seeks more investment in public services and infrastructure, the underdog duo vying for the leadership of the party have said.

Founded in 1863, the world’s oldest social democratic party has been a central pillar of Germany’s postwar political order, but as a junior partner to Merkel’s CDU its fortunes have declined dramatically in recent years, dropping to historic lows in the European elections this year.

Following the resignation of Andrea Nahles as SPD chair in June, two relatively little-known politicians, Norbert Walter-Borjans and Saskia Esken, standing as a joint ticket, have emerged as surprise leadership contenders from the leftwing of the party.

They are up against Germany’s vice-chancellor, Olaf Scholz, and Klara Geywitz, from east Germany, in a run-off vote whose result will be announced on 30 November.

In an interview with three European newspapers – the Guardian, El País and La Republicca – the pair said that if they won they would seek a reorientation of the SPD along traditional leftwing principles that would probably put the party on a collision course with Merkel’s conservatives.

“We took a turn into a neoliberal wilderness”, said Walter-Borjans, 67, whom German media have likened to the US Democrat Bernie Sanders. “There were advisers who also impressed on us Social Democrats that everything works best once it is privatised, if you lower taxes for high earners and increase VAT for those who earn less.”

He said that to win back voters’ trust, the SPD needed to “face up to the mistakes made in the past”, which also included its tacit support for austerity measures in Europe. “The SPD has allowed itself to be dragged into this framing where Germany is always the paymaster. But you have to look at the other side of the picture too, which is that the economic weakness of partner states in the European Union has weakened the euro and strengthened exports. And whose exports are they? Germany’s.”

Some polls predict SPD members will elevate Walter-Borjans and Esken from relative obscurity into one of the most influential positions in European politics, possibly because the so-called “grand coalition” with Merkel’s CDU remains highly unpopular, especially with younger Social Democrats.

Walter-Borjans in particular is seen as a rising star because his backstory speaks of strong principles and an appetite for risk-taking. In his former role as finance minister in North-Rhine Westphalia, he paid €19m for CDs containing whistleblowers’ data on thousands of Swiss bank clients who were not paying their fair share of tax – prompting thousands of people to turn themselves in to the authorities and pay back €7.2bn in taxes.

Critics point out that when he left his old job in 2017 the debt pile was 60% higher than when he started.

The two politicians would not be drawn on whether joining the governing alliance was one of the mistakes they would seek to reverse. Instead, they signalled that the SPD under their leadership would make the government’s survival dependent on a number of policy shifts, especially in relation to the current prioritisation of balanced budgets over economic stimulus.

“If the economy does indeed enter a downturn then we will need to make massive investments. Because our infrastructure is not in a good state, and nor is our digital infrastructure nor our schools. We have to question the black zero,” Walter-Borjans said, referring to the commitment to balancing the federal budget. “If that doesn’t work with our coalition partner then that’s not a good sign.”

Saskia Esken, from Baden-Württemberg, who specialises in digital policy, said the government had “left [the French president Emmanuel] Macron’s outreached hand hanging midair” and failed to come up with ways to reform Europe. “We have to develop Europe further, we have to go beyond the economic union. In some parts we have already gone beyond it, but we have to look at a social union, and a union of tax and financial policy.”

Walter-Borjans said Europe needed to work harder to crack down on tax evasion schemes, especially in the post-Brexit era. “Irrespective of whether Great Britain is inside or outside [the EU], there are already too many gaps, whether they are in Luxembourg, Madeira or Malta,” he said. “I believe that we need a reform of the EU in this respect, starting with a strengthening of the European parliament over the question of unanimous decision-making. Currently there is always the option of someone using their veto, which has left us stuck.”