Germany's Social Democrats (SPD) have scented blood. Now that Chancellor Gerhard Schroeder has ceded power for the first time in his career by quitting as their leader, they want a leftward shift that will slow his reforms.
Schroeder, looking tired
and subdued since his surprise announcement last Friday, has no option but to listen.
He saved his government by handing the chairmanship of his restless, demoralized center-left SPD to a trusted and far more popular ally, Franz Muentefering, amid growing grassroots fury over his welfare cuts.
But now he has a boss. It is
a humiliating blow for the man who stood up to Washington over Iraq, achieved the near impossible by winning re-election in 2002 and gained parliamentary approval for landmark reforms in December.
Since last month a public outcry over higher doctors' fees and planned pension cuts, part of his "Agenda 2010" program, has proved too much for the SPD, which reluctantly backed the reforms it saw as hurting the man in the street.
"It's like on the Bounty," prominent SPD leftwinger Andrea Nahles said. "The party is close to mutiny."
For the moment, the SPD has been pacified by the appointment of a chairman it identifies with more closely than Schroeder.
Thomas Mayer, chief European economist at Deutsche Bank, said: "The party is not following Schroeder the way he had hoped a year ago. He won't reverse his reforms, but he'll have to adjust them and slow them down."
"He will have to make concessions to the left wing," he said.
The wrangling shows how difficult it is for Europe's largest economy to return to growth and adapt its welfare system to the rising cost of an aging population. France and Italy face similar challenges.
NEW TAXES, CABINET RESHUFFLE
Concessions are likely to include forcing companies to pay a "training tax" if they refuse to offer apprenticeships. Another measure may be to raise inheritance tax or introduce a wealth tax to ensure "little people" do not bear the brunt of reforms.
SPD officials are urging the government to start showing more "social justice." Whether Schroeder has the stomach for more health and pension reforms before the 2006 election is in doubt.
Speculation is also mounting that Schroeder cannot long resist calls for a Cabinet reshuffle to get rid of unpopular ministers including Finance Minister Hans Eichel.
Muentefering, a former metalworker who wears a red scarf to underscore his Socialist roots, is popular in the SPD even though he backed Schroeder's Agenda 2010.
He has said the reforms agreed so far would not be reversed. But he added the government would proceed more cautiously on reforms after failing to persuade the public of their necessity.
SCHROEDER'S FUTURE IN DOUBT
Schroeder wants Muentefering to act as a buffer between him and the party, to massage its troubled Socialist soul and persuade it of the need for reform.
That could give Schroeder breathing space, but his survival depends on how the SPD performs in a string of elections -- and on the economy, experiencing a mild, jobless recovery that is not being felt by ordinary people. New health charges and pension cuts are set to squeeze incomes.
Landslide state election defeats last year, the prospect of further routs this year and the worst opinion poll ratings on record -- around 25 percent -- have tarnished Schroeder's image as a vote-winner, his main hold on the party.
Analysts said he may not survive until the 2006 general election if he loses the 14 state, local and European elections this year, starting with a vote
in Hamburg on Feb. 29.
A state election defeat in the SPD's heartland of North Rhine-Westphalia in 2005 could bring him down, said Gero Neugebauer, political scientist at Berlin's Free University.
He could go sooner.
Schroeder, prone to impulsive actions, forced his SPD to back his reform agenda last year by threatening repeatedly to resign.
At the time, such threats had an impact. Now, with SPD members abandoning the party in thousands, it may be welcomed.
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