Germany's 22 September general election, widely predicted as the deathknell for the ruling Red-Green coalition, has suddenly become a result that is too close to call.
Chancellor Gerhard Schröder has narrowed the gap with a campaign that focuses on opposing war on Iraq.
The result will have a profound impact on the political make-up of Europe. Schröder's 'new middle' policies, closely modelled on the Blairite 'third way', were an integral part of the 'pink wave' of electoral successes for social democratic parties in the 1990s. With deep disillusionment in that project the wave has receded, the French Socialist Party being the most significant victim of the backlash. The German economic crisis which has seen growth flatline in the past year, leading to unemployment of over 4 million (one in ten of the workforce), remains Schröder's biggest obstacle to hanging on to office. It is the issue that the Tory Christian Democrats led by Edmund Stoiber have made most political capital out of, sometimes linked to anti-immigrant racism.
Schröder's central response to this has been the Hartz Report, a document encouraging labour market flexibility. Its key proposals are to relax regulations controlling temporary work and to increase the pressure on the unemployed. This dogmatically neoliberal response is easily ridiculed by Stoiber, who pointed out in their first televised debate that in eastern Germany there are only 7,000 vacancies and 1.5 million jobless.
Although still on the right of social democracy, Schröder has been forced to appeal to the left in the face of electoral meltdown. So he used the floods to postpone a planned cut in the top rate of income tax. He also took up the bosses' federation (BDI) on their highly qualified suggestion that companies could contribute towards post-flood reconstruction. They instantly received howls of outrage from their members, but Schröder used the opportunity to increase corporation tax by 1.5 percent for next year. It is unlikely that he would otherwise have had the courage to initiate proposals which Stoiber described as 'poison for the economy', and they are of a very limited nature. But they indicate the pressure the government is under from the left.
If the decline in support for the Social Democrats has been sharp since they were elected in 1998, then that of their Green coalition partners has been even more so. They were previously at the heart of the protest movement, but most of their leadership backed the Balkan and Afghan wars. Their share of the youth vote slumped from 23 to 9 percent. The extent of disillusionment with mainstream politics is such that only a few weeks before the election 46 percent of people were undecided who to vote for.
The Greens' rediscovery of their pacifist roots is a tribute primarily to the May anti-war mobilisation against George Bush, which was very young. The movement is being geared towards 14 September, the date of a demonstration 'against capital and war', and to the European Social Forum in Florence. A weakness in the German peace movement has been the failure to counter Islamophobic politics through practical mobilisation. This will be a key battle for socialists in Germany, whatever the election result.