Could NATO Be the Downfall of Angela Merkel’s Government?

Germany’s coalition government is shaky, and the Social Democratic Party (SPD) may be the first brick to crumble. Unhappy with its relative weakness—the center-left party has been overshadowed as a junior partner to Chancellor Angela Merkel’s conservative bloc during three out of her four terms—SPD politicians are desperately looking for ways to revive their party’s fortunes. To stave off existential losses during the European Union parliamentary and German state elections this year, the party is portraying itself as a crusader for welfare issues at the expense of Germany’s international credibility.

The SPD has tried to make its mark by shunning defense and security in favor of social spending. In an Infratest Dimap poll last month, only 3 percent of Germans said they believed that any budget increases should go to defense. Three-quarters of those polled chose education, health, or infrastructure. In turn, the SPD’s new strategy has yielded a small uptick in the polls.

At the same time, however, the party is alienating Germany’s allies. At the 2014 NATO summit in Wales, Germany pledged to dedicate 2 percent of GDP toward defense spending by 2024. But when the current government was sworn in last year, it quickly became clear that Germany was on course to reach only 1.5 percent. This isn’t a matter of low funds; Germany has had budget surpluses for five years running. The reluctance of the EU’s largest economy to invest in its military is thus perplexing. U.S. President Donald Trump has certainly fumed about its free-riding on NATO’s security guarantee.

German Defense Minister Ursula von der Leyen of the Christian Democratic Union had said that regardless of the 2 percent goal, her country was on course to expand its defense budget by 80 percent within a decade. (That would have taken spending near to 1.5 percent by 2024.) And now her cabinet colleague, Finance Minister Olaf Scholz of the SPD, has proposed shifting more funds to social spending while siphoning euros from defense and development aid in the next budget. Doing so would give Germany a failing grade on the Strategic Level Report it delivered to NATO earlier this year, which was meant to track Germany’s good faith in living up to its NATO obligations.

Why stoke the ire of Trump and further weaken European solidarity in a time when the Atlantic alliance is being challenged on many fronts? There is a logical explanation: Germany’s Constitution stipulates that the country run on a near-balanced budget, and the guiding star for German finance ministers of both major parties is to maintain the so-called black zero, never going into the red.

With the threat of U.S. automotive tariffs and a looming Brexit, there is a sense in Germany that recession is around the corner. Scholz has thus defended cuts, warning that the flush years are over. But in reality, this year’s budget process is turning into an election battleground. Notably, agencies receiving reductions in their requests are headed by conservatives, such as defense and development. Meanwhile, the draft budget allocates approximately 11 percent more funding for the SPD-run labor ministry.

Indeed, the SPD is using the budget planning process to tempt the breakup of the current coalition, and Scholz is positioning himself as a potential chancellor. In this attempt, the SPD is fighting for its life. Current polling numbers would disqualify Germany’s oldest political party as a major party. According to ZDF’s Politbarometer, the SPD is polling at 15 percent if parliamentary elections were held today. The conservatives have double the support, and the once-upstart Greens have eclipsed the SPD at 19 percent.

The SPD is being squeezed by the Greens on the left and is losing voters to the right-wing Alternative for Germany party. The party is constantly cast as a junior partner to Merkel, who still gets relatively high favorability ratings. All that irks SPD voters. In early March, an Emnid poll found that 73 percent of them would welcome a break-up of the grand coalition.

By betting on the welfare state and not rolling over to Trump, the SPD thinks it can gain some traction and differentiate itself from the conservatives. The SPD recently introduced its “Sozialstaat 2025,” a party platform that aims to end labor measures enacted under SPD Chancellor Gerhard Schröder in 2005, increase the newly created minimum wage, and establish a basic pension to prove its working-class roots. Its party leadership has also not minced words about the Trump administration’s provocations, even as Merkel has shown restraint.

Regardless of the SPD’s stance, voters have yet to be swayed. The supposed catchall party can’t even manage to capture one-fifth of the electorate. Instead of lurching to the left, the SPD should consider seizing the middle. That has been Merkel’s winning strategy, and now there is room to beat her party at it since her anointed successor, Annegret Kramp-Karrenbauer, has been trying show off her conservative credentials.

Reneging on Germany’s defense spending commitments is certainly risky for the country’s international reputation, but the SPD is facing crucial electoral tests next month. In addition to the EU parliamentary elections, the small state of Bremen will hold a state-level vote that will be make or break for the SPD. The party has held the area since 1946, and current polling puts it neck and neck with the conservatives.

Rather than antagonizing NATO allies, perhaps the best bet for the SPD would be taking a page out of its rivals’ playbook and undergoing further leadership change. Scholz certainly senses an opening—his bold move stakes his claim on being SPD’s chancellor candidate rather than automatically giving it to party leader Andrea Nahles. Scholz might not be the antidote for stagnant poll numbers. Perhaps a spell in the opposition could serve the party well while a fresh talent outside of Berlin is groomed for the future.