Chancellor Candidate Deutsche Bank has Little Hope for Martin Schulz

Martin Schulz's nomination to oppose Chancellor Angela Merkel in October's elections has re-energized the Social Democratic Party and already led to positive opinion poll numbers. However, Deutsche Bank analysts aren't quite so optimistic.
Martin Schulz is the Social Democratic Party's nominee to oppose Angela Merkel in this year's national elections in Germany.

Deutsche Bank's research division sees little chance for Martin Schulz to move into the Chancellery after this fall's general elections. While the bank's analysts believe Mr. Schulz's nomination as the SPD's frontrunner has the potential to boost his party's election campaign, they see the possibility of his candidacy "derailing" chancellor Angela Merkel as unlikely.

Their analysis appeared in the bank's monthly English-language "Focus Germany" report, which assesses economic policy and German politics.

The report, entitled "New SPD Frontrunner Unlikely to Defeat Merkel", nevertheless praises Mr. Schulz for his "rhetorical skills and track record as a successful campaigner in the 2014 European election." The analysts also point out that Mr. Schulz "has frequently made his mark as a proponent of traditional social-democratic ideas, i.e. solidarity and social justice." They also cite surveys which suggest Mr. Schulz's chances of success against Ms. Merkel are better than those of Sigmar Gabriel, the country's vice chancellor who until late last month had been expected to carry the party's mantle into the election.

"For quite some time the SPD has been struggling with poor approval ratings," the report said, adding that the party lags on average 15 percentage points behind Ms. Merkel's Christian Democrats. The SPD currently polls at 26 percent. The authors see indications that Mr. Schulz might help that number grow.

However, the nomination of Mr. Schulz, a former European Parliament President, could pose some risks for the SPD, the authors write. These mostly center on Mr. Schulz's lack of experience in a major government position. The report assesses Mr. Schulz's previous political engagement in Strasbourg and Brussels as centering on compromise, not making difficult executive decisions.

The analysts further predict that the SPD would need an enormous upswing in popularity to be able to topple Ms. Merkel and form a coalition with the Greens and the Left Party. This is seen as unlikely.

Instead, the analysts widely expect another "grand coalition between the country's two major parties.

"If the SPD were to moderately gain support in the next months and thus be able to spoil the CDU/CSU's prospect for a coalition with the Greens, Mr. Schulz and his party would likely be confronted with the CDU/CSU’s request to participate in a renewed grand coalition," the report concludes, adding Mr. Schulz would not likely resist such an alliance.


Felix Holtermann is an editor at the Handelsblatt finance desk. To contact the author: [email protected]