Germany's 'debt queen' kicks austerity to the curb

BERLIN — Reuters

Hannalore Kraft’s style contrasts with Angela Merkel, dubbed “Mutti” – or “mummy” – by German media because of her undisputed grip on power, but who often looks stiff when meeting voters face to face. (Tobias Schwarz/Reuters/Tobias Schwarz/Reuters)

Her rivals call her Germany's “debt queen,” but Hannelore Kraft's victory in a state election on the weekend has driven speculation she could challenge Chancellor Angela Merkel as the mother of a nation famed for its frugality.

Ms. Kraft's ready smile and common touch helped her turn around the fortunes of her centre-left Social Democrats (SPD) in Sunday’s vote in North Rhine-Westphalia and she was re-elected premier of Germany's most populous state.

Story continues below ad

The defeat comes just one week after France and Greece voted out pro-austerity leaders – and Ms. Kraft’s victory can been as a precursor for national elections. While many see it as a rebuke of Ms. Merkel’s pro-austerity program, others say the results were mainly due to an inept campaign by Norbert Röttgen, the German Environment Minister. This is the worst post-war defeat in the state for his party, Ms. Merkel’s Christian Democratic Union (CDU).

The SPD won 39.1 per cent against 26.3 per cent for the CDU.

Ms. Kraft’s style contrasts with Ms. Merkel, dubbed “Mutti” – or “mummy” – by German media because of her undisputed grip on power but who often looks stiff when meeting voters face to face.

An economist and business consultant whose father was a tram-worker, Ms. Kraft has nowhere near the political experience of Ms. Merkel, who has been in power since 2005, even though, at 50, Ms. Kraft is only seven years Ms. Merkel’s junior. But Ms. Kraft has earned a reputation for political pragmatism, just like the conservative chancellor who will fight for a third term in 16 months' time; and Ms. Kraft has an earthy charm Ms. Merkel lacks.

Ms. Kraft gave her victory speech in a disco, not somewhere Ms. Merkel would choose, breaking into song and thanking her mother for doing the ironing during the campaign. “To be honest, I am totally kaput,” she told supporters.

On the campaign trail, she mingled with shoppers and chatted about day-to-day concerns, drawing on her own family's experience such as the time when her husband was unemployed.

One tongue-in-cheek campaign poster “ Currywurst ist SPD” – roughly translated as “Curry sausage: That's the SPD” in reference to the working-class delicacy – rams home Ms. Kraft's election message that she is close to ordinary people.

For two years before Sunday's vote, the personable blonde with a penchant for puzzles and quiz games led a minority state government with the Greens, winning opposition support for school reform, an end to tuition fees and more childcare funds.

Even Ms. Merkel paid tribute to Ms. Kraft's campaign, telling a news conference on Monday alongside her sorry candidate, Mr. Röttgen: “The SPD's victory was clearly down to their leading candidate so I congratulate them on this success.”

Ms. Kraft's political priorities – a minimum wage, education reform and boosting North Rhine-Westphalia business appeal – are linked to the economy. Yet her biggest vulnerability is fiscal management and that could yet dent any hopes of higher office.

The CDU has homed in on North Rhine-Westphalia’s record debt pile of 180-billion euros and calls Ms. Kraft the “debt queen” although the debts were built up over many years.

It is unclear if she will deliver on the state's obligations to cut debt under Germany's new “debt brake” law which is attracting plenty of attention as the euro zone debt crisis continues to bubble.

Her failure to get her 2012 budget plans passed after a court ruled a supplementary budget for 2010 unconstitutional forced her to call an early election and left her exposed to charges of fiscal incompetence.

What the papers say

German newspapers weigh in on Angela Merkel and Hannelore Kraft:

The centre-left broadsheet, Süddeutsche Zeitung

Angela Merkel is frequently referred to as the savings chancellor. But she is mostly interested in seeing Europe save – not Germany. Her rejection of tax cuts is, at the end of the day, hardly comparable to an austerity plan involving deep pay cuts or steep pension reductions. And both women espouse noble motives: Ms. Kraft refers to her spending as preventative politics. Ms. Merkel claims to be spending so as not to idle the economic motor in the only large European economy that is still growing.

The conservative daily Die Welt

One year ago, the constitutional court ruled that the 2010 supplementary budget put forward by the Social Democrats and the Green Party was unconstitutional: a singular occurrence in the history of postwar Germany. But that didn't slow down the “queen of debt.” As if she had never heard of the dilemmas facing the welfare state, Ms. Kraft stuck undaunted to the Social Democratic philosophical principles of the past. And she really believed in her ability to market renewed borrowing as start-up funding for future growth and development.”