The coalition negotiations between the social democratic SPD and conservative right CDU/CSU are going surprisingly smoothly, almost harmoniously. Lars Klingbeil, co-chairman of the SPD, explains that he and CDU leader Friedrich Merz get along well.

A Shadow of its Former Self

An settlement on the coalition agreement could be reached shortly, it is said. The SPD leader rejects criticism of the renewed formation of a government with the CDU: “When history knocks, you have to open the door.” One has to take responsibility for Germany.

The smooth transition to the next grand coalition called GroKo – the fourth since the end of the red-green coalition in 2005 between SPD and Greens – obscures the reality of what is actually happening. Unable to renew itself, the SPD is making itself obsolete and vanishing as a relevant political force because it refuses to look at the writing on the wall. It is somewhat reminiscent of the end of the ruling SED party in the former GDR, which the citizens ended up running away from.

The SPD is now a shadow of its former self. The election result of 16.4 percent is an historic disaster in a long string of disasters in recent decades.

No Sense of Crisis

The party ended up with the worst result since the party was named the “Social Democratic Party of Germany” in 1890 and was pushed into third place by the far-right AfD with almost 21 percent of the vote. Only twelve percent of workers voted SPD.

A degradation. But the party leadership is acting as if nothing had happened – most of the media follow suit. There is no atmosphere of crisis.

Chancellor Olaf Scholz may have withdrawn, but otherwise the same people who are responsible for the disaster are basically being sent into the race, including Lars Klingbeil, the second chairperson Saskia Esken, labor secretary Hubertus Heil and defense minister Boris Pistorius.

How the SPD Refeudalizes Society

They are now negotiating and courting for new posts. The SPD degenerated into a mere party machine longing for power, status und participation in governments, without vision, concept, strategy, while the base continues to dwindle.

Above all, there is a lack of awareness about the dire straits. Without analysis and self-reflection, without drawing conclusions from the misery, going further downhill will be unavoidable.

Under its leadership, the SPD managed to steer the “progressive coalition” of the last years, the so called traffic light government with Liberals and Greens, into social stagnation. According to social researcher Christoph Butterwegge, this coalition has even led to setbacks in distribution policy and accelerated the “refeudalization of society”. It was indeed a coalition of regression that is leaving Germany more unequal and polarized:

“While poverty is gradually creeping up into the middle class, wealth is becoming concentrated in fewer and fewer hands,” says Butterwegge.

The Coalition of Regression at Work

The SPD-led coalition government responded to the explosion in prices and rents, the advancing recession and deindustrialization, and rising unemployment with unjust relief packages, a total failure in pension policy, a loss of purchasing power for the minimum wage, a step backwards on the social welfare called “Bürgergeld”, including a further tightening of rules that compel recipients to take any offered job.

Furthermore, the climate protection law was watered down, while the greenhouse gas intensive natural gas was declared the energy miracle weapon, substituting Russian gas with dirty and costly LNG from mostly the US.

There is a system to this political failure since the Social Democrats adopted neoliberal policies under the chancellorship of Gerhard Schröder at the end of the 1990ies. Now the party establishment is putting all one’s eggs on a reform of the debt brake basket, as if this would solve the serious problems in Germany that many people are worrying about.

The Debt Issue

The debt brake was written into the constitution in 2009 and restricts structural budget deficits to 0,35% of GDP, in effect an austerity measure. It was damaging to the German economy and infrastructure – and therefore to abolish it would be a good thing. But more debt will not by itself solve the distribution problem, the widening gap between rich and poor, the extreme concentration of wealth in the upper class and the growing material frustration in the middle and lower classes, who are disconnected from prosperity and growth. To do that, a U-turn in tax policy would be needed.

Moreover, in a night and fog action before the new Bundestag was even constituted, only the military budget was exempted from the debt brake. This is in many ways the most problematic area, which has already reached record levels, and brings little in the way of economic and social benefits (a large part of the last 100 billion euro special fund for the Bundeswehr is spend on weapons from the USA), not to mention the damage to the climate that is associated with it.

In contrast, investments in infrastructure are being outsourced to a special fund. However, whether the 500 billion euros agreed on will be spent over the next twelve years on meaningful social, economic and societal challenges (the SPD had to be reminded by the Greens, for example, of the investment task of switching to renewables, whereby climate-damaging measures dominate the coalition guidelines laid out so far), whether the sum is sufficient at all in view of the underinvestment in the past and the recessive tendencies (after all, it is ultimately only around 40 billion euros per year), and whether the funds are actually additional investments or just replace tasks from the normal federal budget, that remains to be seen.

Who Pays?

After the rushed “constitutional amendment”, the SPD is now in the weaker position and on the defensive – and will have to beg when it comes to the design of the investments.

In a government with the much stronger CDU/CSU counterpart, led by the former Blackrock supervisory board chairman in Germany, financial industry lobbyist and populist Friedrich Merz, who is flirting with the AfD, a social democratic policy will hardly be able to evolve. Rather, a conservative turnaround is to be expected.

The additional debt and its repayment will naturally burden the budget and therefore the society if the financing is not provided by additional tax revenues from corporations, large fortunes and inheritances, capital gains, extreme salaries and luxury goods.

The Upper Echelons Will Be Spared

But that is unlikely to happen. The Merz team has already made it clear that it wants tax breaks for companies, but will not accept tax increases that affect the upper classes.

In addition, internal pressure is increasing on Merz to take tough action now that the debt brake has been loosened, accompanied by a plunge in the polls, where the CDU/CSU are now only one percentage point ahead of the AfD.

Therefore, the negotiating partners want to take harsher action against citizens receiving social assistance and against refugees. The SPD is standing by helplessly.

Once again, cuts and burdens are threatening the poorer and middle classes of the population. The price for further social stagnation and regression could be paid by the SPD at the next election.

From 1972 Downhill

The traditional party, once internationally renowned and highly popular, is sitting on a dying branch. In the European elections in the middle of last year, the SPD only managed a lousy 13.9 percent of the vote. Anyone who thinks rock bottom must be reached should remember that the same was said in the past.

It is also wrong to believe that the problems can be solved with a few adjustments. Rather, the SPD has been in an intensifying existential crisis for decades, one that has political roots and goes deep into its foundations.

Since 1972, the SPD has been on a downward trajectory. At that time, social democrat Willy Brandt won around 46 percent of the vote and ascended to a popular chancellor. After that, it went steadily downhill to just over 16 percent.

There was only a short pause in the 1990s in the wake of reunification, after 16 years of governments under CDU leader Helmut Kohl (and the associated desire for renewal), rising unemployment and the SPD’s promise of a turnaround.

The Crash Course of Agenda 2010

After their election victory in 1998, the Social Democrats pushed through the neoliberal Agenda 2010 and Hartz IV reforms that cut unemployment benefits. Instead of social modernization and a renewal, Germans in the east and west faced cuts to social services, pressure on the middle class and tax breaks for the wealthy.

Since then, the SPD has continued to decline, while the neoliberal course has been firmly adhered to. In 1998, more than 20 million Germans voted for the SPD in the Bundestag election; today, there are only about eight. In the last federal election, the SPD received mere 20 percent of the vote even in its former stronghold, the biggest German state North Rhine-Westphalia.

Since then, membership has also dwindled. In 1990, they were around one million. Today there are only 357,000, around a third of the former figure.

Last year, the CDU even overtook the SPD and is now the party with the most members, with 365,000. Meanwhile, the Left Party has doubled its membership to 110,000 since mid-2024 – with a clear progressive agenda, from social issues to climate change and refugee protection.

The Base Is Dying

In addition, there is a drastic aging of the membership, which can also be seen among the voters. The party is dying out, while young people are going other ways. Marco Bülow, a long-standing SPD member of the German parliament until he left the party in frustration in 2018, estimates that, in addition, only about ten percent of members are active at all and participate in the wider decision-making process.

The SPD used to be a vibrant political platform. From the beginning of the 20th century until the Nazis seized power, it ran publishing houses and newspapers, organized meeting places and discussion groups, and maintained a network of social and educational organizations. It was a party driven by workers.

Later, local party groups, trade unions and works councils were able to actively participate from the bottom up, and intellectuals were also attracted by Brandt’s motto “Let’s risk more democracy”. Today, much of this has been destroyed or only exists in rudimentary form.

Bülow speaks of a hierarchical leadership from above that is hollowing out the party from within. The SPD is dying at the base or has already died in parts, although many “Genossen” are doing committed work at the community level.

Germans Left of the SPD

There are, of course, a number of reasons why social democracy is in decline. But the core of the problem is that the SPD no longer offers or advocates progressive, social democratic policies.

Rather, like the Conservatives and Liberals, it is pursuing a course that goes against the preferences of the majority of the population. Most Germans demand social balance, a fair taxation of wealth, and a functioning welfare state that takes care of its citizens. They want a just republic.

But SPD’s realpolitik has long since ceased to follow this. This is not only true for Germany. The crisis of social democracy can be observed in many European countries, albeit in different forms. It started with the enforcement of so-called financial capitalism and the globalization for investors and corporations.

Class War: We Win!

This took place in the 1970s under the leadership of US President Ronald Reagan and British Prime Minister Margaret Thatcher. The financial industry was deregulated so that investors and companies could fuel competition across national borders for the lowest labor standards and wages.

This led to outsourcing, deindustrialization, mass unemployment, commercialization of public services and a weakening of trade unions, while the countries of the Global South became “workbenches” for the rich countries, which are simultaneously plagued by exploitation, the breaking of social structures, debt regimes and environmental pollution due to profit pressures.

The SPD and other social democratic parties adapted to the neoliberal dogma. Instead of fighting for a fair economic and trade architecture geared towards the working population, they surrendered to the “lack of alternatives”. They continued to try to reach compromises with capital and business – and increasingly lost the power struggle, which was very successfully waged by the other side.

More and more, the business community dissolved the social contract. After the Euro zone austerity program of the Troika under leadership of the German government, the then head of the European Central Bank, Mario Draghi, declared: “The European social model has already gone”. The US financial investor and billionaire Warren Buffet summed it up well in 2006: “There is class warfare, that’s true, but it’s my class, the rich class, that is waging war, and we are winning.”

The Social Democrats as Warriors

The SPD bears a large share of the responsibility for this class struggle in Germany – and beyond that, in the EU – turning out favorably for the upper class and poorly for the rest. Through legal regulations in the early 2000s, it created one of the largest low-wage sectors in the EU, with many millions of workers, further reduced taxes for the rich, and dismantled the welfare state and social security systems.

Four SPD government participations later, Germany has the greatest inequality of wealth in Europe, with rampant poverty and homelessness, a deteriorating infrastructure and growing political frustration. In the end, the SPD received 16.4 percent of the vote, while the AfD received 20.8 percent.

In May 2020, when the party leftists Saskia Esken and Norbert Walter-Borjans were elected to the leadership, the economist and sociologist Oliver Nachtwey warned that this would not protect the SPD from its own abolition:

“Their belated and cautious change of course thus merely represents the next stage in the ongoing ‘modernization’ of the SPD, which threatens to end in its complete dissolution.”

A mass party has become an “functionaries’ bureaucracy that is only managing its own misery,” he said.

A Social Democratic Palace Coup?

The only alternative to decline would be a vibrant renewal of social democracy that not only preaches values but also incorporates them into real politics. Claudia Sheinbaum in Mexico, Luiz Inácio Lula da Silva in Brazil, Jean-Luc Mélenchon in France, Jeremy Corbyn in the UK or Bernie Sanders in the US show how such policies could look like.

To do so, the party would only have to follow what is in its name, what has made it great and successful. It will not be possible without a radical tax reversal and redistribution of wealth, nor without a commitment to coalitions with social democratic forces such as the Left Party.

A palace coup would be needed for such a U-turn, which could be stimulated by civil society, movements and the grassroots. No easy task, of course. In 2017, one could observe how even the first tentative attempts were nipped in the bud.

Martin Schulz, the SPD’s then chancellor candidate, spoke of higher inheritance tax and higher top tax rates, which led to an upswing in the polls. However, he was quickly brought back on track by the establishment, and the SPD ended up with a disastrous 20.5 percent result.

GroKo logic and betrayal of 1919

As long as the social-democratic turnaround does not take place, the SPD leadership will fall again in line with the grand coalition (GroKo) logic and this time with the right-wing conservative Merz government, while Lars Klingbeil could become the gravedigger of the SPD.

Historically, some of this is reminiscent of the SPD’s approval of the war loans for the First World War and the brutal suppression of workers’ uprisings by the social-democratic leadership elite in 1919, while it aligned itself more and more with the bourgeois class.

After that, the SPD plummeted in the elections, lost its appeal to workers, and thus also paved the way for the Nazis’ rise to power. Today, the SPD is once again participating in military loans and anti-social stamping down, against “parasites” and dissidenting voices, in order to stay in power.

A dangerous game with fire.

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