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OPINION & ANALYSIS

ANALYSIS: Will a controversial police raid influence the German election?

A plot line worthy of a Netflix political thriller has entered the German election campaign at the very last minute. Could it have a decisive impact on the result? Jörg Luyken looks a little deeper.

ANALYSIS: Will a controversial police raid influence the German election?
The Federal Finance Ministry. Photo: dpa | Christophe Gateau

Shortly after 9am last Thursday, Finance Minister Olaf Scholz learned that a team of prosecutors was standing outside the gate to the Nazi-era Finance Ministry building. 

The investigators had travelled from Osnabrück in Lower Saxony accompanied by four policemen. Armed with a search warrant, they told the minister that they would need to look through rooms and documents in the building as part of an ongoing inquiry.

READ ALSO: German and finance ministries searched in fraud investigations

The focus of the investigation was the Financial Intelligence Unit (FUI), a team tasked with assessing tip offs from banks about money laundering and passing them on to prosecutors. The FUI is suspected of obstructing an investigation into a multi-million-euro money laundering operation, possibly involving terror funding in Africa.

Within a couple of hours the national news bulletins were all leading on one story: “Prosecutors raid the Finance Ministry.”

With just two weeks to go before the election, these raids had the potential to act as political dynamite.

The Social Democratic Party (SPD), for whom Scholz is the Chancellor candidate, has sailed into the lead in national polling, pulling past the conservative CDU and the Greens.

And it is clear why. For many Germans, the Finance Minister’s dullness and lack of emotion are a sign of competence and rigour; the CDU’s affable candidate Armin Laschet is seen as lightweight and unserious by comparison; Annalena Baerbock of the Greens lacks experience.

But Scholz has a chink in his armour: past failures to act decisively against financial malpractice have left the impression he is too lax on bankers.

During the Cum-Ex scandals he met with the head of a Hamburg bank that had defrauded the taxpayer of millions just weeks before the tax office wrongly let the bank keep the cash. And then Wirecard got away with the largest fraud in German history right under the nose of a financial authority Scholz was responsible for.

So, a new investigation into financial wrongdoing, this time leading right up to his door step, seemed to fit a pattern.

But perhaps it fitted that pattern just a little too conveniently. Because, when you look a little closer things become a little murkier.

Osnabrück’s chief prosecutor is a member of the CDU. And the prosecutor’s office is under the authority of Lower Saxony’s justice minister, Barbara Havliza, herself a CDU politician who was formerly presiding judge at the Osnabrück city court – the same court that granted the search warrant.

READ ALSO: How to explain German vaccine hesitancy?

The Social Democrats are sure that the raid was politically motivated. They point to the very different wording of the arrest warrant, which merely stated that they wanted to “identify relevant staff” at the Financial Intelligence Unit (FIU) and gather information on their communications.

But the prosecutor’s press release – meant for public consumption – implied a more politically sensitive element to the investigation. The object was to find out “the extent to which the leadership of the ministry… …were involved in decisions of the FIU,” the statement read. In other words, did Scholz or his closest advisors do anything untoward?

Legal experts have expressed surprise that the Osnabrück prosecutors applied for a search warrant before even alerting the Finance Ministry. Normal procedure is to first write to request the relevant files. As one legal professor put it to der Spiegel: “The [application for a] search warrant can only be read as a clear sign of mistrust towards the responsible people at the ministry.”

Osnabrück’s prosecutors have insisted that political considerations “played no role”. Instead they suggested that they had reason to believe that bureaucrats at the ministry wouldn’t have given them everything that they wanted had they requested the documents in writing.

What reason could the prosecutors have had to suspect that Scholz’s staff were hiding something? After all, the FUI isn’t even fully under the control of the Finance Ministry, which doesn’t have Fachaufsicht over its activities i.e. it doesn’t have the power to look into the its individual investigations.

Scholz has himself implied that the prosecutors behaved improperly, asking why they didn’t submit their queries in writing.

Of course, the SPD’s reaction could be an attempt to redirect the public’s attention. But there are real issues surrounding the impartiality of Germany’s prosecutors.

Back in 2019, the European Court of Justice banned German prosecutors from issuing EU-wide arrest warrants, saying that they were not sufficiently independent from executive influence.

A quirk of German law that dates at least to the days of the Weimar Republic allows government ministers to intervene in prosecutors’ work. This blurring of the separation of powers has been described by Süddeutsche Zeitung editor Heribert Prantl as “the original sin of the Bundesrepublik.”

Still, political plots seem a bit too lurid for the dull world of German politics. Who really believes that the gaffe-prone Laschet was pulling the strings behind the scenes in a high-risk bid to defame his opponent?

But the CDU leader – under intense pressure to turn around his party’s grim fortunes – couldn’t resist the chance to attack his rival during a prime time TV duel on Sunday evening.

Looking deeply concerned by events at the Finance Ministry, he lambasted Scholz for a failure of management which had made the prosecutor’s raids inevitable. He then added for good measure that his rival was “acting like populists in other countries” by questioning the prosecutor’s motives.

There was something contrived about Laschet’s attack – especially his insistence that he would move the FIU away from the Finance Ministry to the Bundeskriminalamt (his political godfather Wolfgang Schäuble moved the unit in the opposite direction back in 2017). It smacked of a last-ditch attempt to make something, anything stick.

SEE ALSO: What’s behind the German fascination with foraging for wild mushrooms?

But he got under his opponent’s skin. Visibly riled, Scholz insisted that Laschet retract his “deliberately misleading” accusations.

The German public didn’t seem to buy what Laschet was selling, though. Snap polling after the TV duel once again showed Scholz to be viewed as more competent and trustworthy.

The affair has echoes of the ‘October surprise’ that knocked Hillary Clinton off her stride in the US Presidential election in 2016.

On that occasion, the FBI made a much-criticized decision to announce that it was investigating emails sent by Clinton during her time as Secretary of State. The investigation drew a blank and Clinton would later blame the FBI for her defeat to Donald Trump.  

This is unlikely to be Scholz’s Clinton moment. Nonetheless, it could add a surprise element to an election run in the all seemed to be going Scholz’s way.

Jörg Luyken is the creator of The German Review. You can sign up to his bi-weekly newsletter on German current affairs here.

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OPINION & ANALYSIS

Why the Greens are the real winners of Germany’s state elections

German state elections don't tell us everything about the public mood, but the past few votes have revealed some pretty clear winners and losers. While support for the SPD is flagging, the Greens are growing in stature by the day, writes Brian Melican.

Why the Greens are the real winners of Germany's state elections

It’s one of the peculiarities of Germany’s federal system that we’re almost never more than six months away from an election being held somewhere. Alongside the national elections (Bundestagswahl) usually every four years, each of the 16 states also hold ballots (Landtagswahl) on varying cycles; then there are local and mayoral elections, too. As such, rolling campaigning and more-or-less continuous election analysis are a part of life here: “What does Election X say about Government Y?” is a question you will always hear being asked somewhere.

Nevertheless, regional elections have a habit of clustering – and generally come at points when national governments would rather not have people poring over electoral data. And this year, after barely six months in office, Olaf Scholz’ novel tri-partite traffic-light coalition has already been faced with three regional elections – in Saarland (27th March), last week in Schleswig-Holstein (8th May), and yesterday in North-Rhine Westphalia (15th May). On a regional level, the popularity of the Social Democrats (SPD), Greens and Free Democrats (FDP) has already been thoroughly tested. 

Understanding state elections

The key thing to remember about German regional elections are that they both are and aren’t about national politics. Firstly, here’s how they aren’t. At a basic level, these regional elections are simply about voters choosing a government to deal with state-level remits (mainly health, education, and housing). They will vote first and foremost on these issues.

Personality politics are also important: long-serving German state premiers frequently garner the unofficial honorific Landesvater or Landesmutter –  literally: ‘father/mother of the state’ – and benefit from high personal approval ratings, allowing them to withstand changes in mood at national level. So it is by no means infrequent for voters to return completely different parties in regional than at national elections. By way of example, while Olaf Scholz, SPD, remained a popular Landesvater figure in Hamburg, Merkel’s CDU still won more Hamburg votes at national elections.

READ ALSO: EXPLAINED: Why Sunday’s state parliament vote in NRW is important for German politics

Then again, regional elections also are about national politics. That’s because they never take place in a vacuum (except for in Bavaria, of course, where everyone always votes CSU). Even the most beloved of state premiers faces an uphill struggle if their party is currently making a hash of things in Berlin. What is more, the larger and the more representative the Bundesland, the more results of its elections can show swings in voter mood which may be of national relevance.

The Greens’ slow ascent from their mid-2000s funk to their current swagger began in Baden-Württemberg: winning control of this state populated by 11 million people and many of Germany’s top industrialists showed that voters trusted them to be part of a government. That set the ball rolling and by the time of last year’s national election, the Greens were already in power in half of federal states. Incidentally, it is often overlooked that state governments make up the Bundesrat, the second chamber of parliament, which can accept or refuse laws made by the Bundestag. So shifts in power here can be of national relevance.

This dichotomy has the predictable effect that, in the aftermath of every Landtagswahl, the losing parties usually claim that it was simply a regional ballot with nothing to say about national politics while the winning parties play up the significance at federal level.

Olaf Scholz and Thomas Kutschaty

Chancellor Olaf Scholz (SPD) congratulates Thomas Kutschaty, SPD candidate in North Rhine-Westphalia, after the party wins 26.7 percent of the vote. Photo: picture alliance/dpa | Kay Nietfeld

An SPD disaster 

This is why it is very bad news for Olaf Scholz and the SPD that their only victory in spring 2022’s three Landtagswahlen was in dinky little Saarland, a state whose population is smaller than that of a major city like Cologne and whose local politics are so marked by rivalries and infighting as to have little-to-no relevance nationally. Despite winning an absolute majority in the regional parliament at Saarbrücken (a rare feat in proportional representation), there was no way the SPD could claim a national bearing – and, to its credit, didn’t try to do so either.

In Schleswig-Holstein, the SPD wasn’t expected to unseat the CDU’s Daniel Günther, a likeable and well-liked premier coming to the end of five years at the helm of a surprisingly successful Jamaica coalition with the Greens and the FDP. Here, too, the national relevance was relatively low: Schleswig-Holstein has only 3 million inhabitants and few large towns and cities. Nevertheless, losing over half its seats while the Greens and CDU gained by the same amount was not a good result for the SPD.

What was disastrous, however, was last night’s result in North-Rhine Westphalia. With a population the size of the neighbouring Netherlands (17 million) and everything from Germany’s largest urban conurbation down to isolated mountain regions, NRW is often considered a microcosm of the country as a whole. As something of a swing state, parties which succeed here often go on to win the next national election (if they aren’t already in government).

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What is more, unlike in Schleswig-Holstein, NRW was the SDP’s to win. Until last year, its premier was the luckless Armin Laschet (remember him?), who plumbed popularity depths in his failed bid to become Chancellor. He then left a badly-damaged CDU-FDP administration to Hendrik Wüst, a successor whose profile, if he had one at all, was defined by various low-level corruption scandals (including a regrettable incident where he sold slots with the then-NRW premier, Jürgen Rüttgers, to high-paying commercial lobbyists…).

Hendrik Wüst (CDU)

Re-elected NRW state premier Hendrik Wüst (CDU) celebrates his victory. Photo: picture alliance/dpa | Rolf Vennenbernd

Even if Wüst proved to be an unexpectedly good campaigner and the SPD’s Thomas Kutschaty remained oddly faceless, the fact that Olaf Scholz himself got involved and that the SPD still ended up with its worst showing in NRW ever is nothing less than a serious defeat for both the Chancellor and his party – one which, in my view, underlines how Scholz has not yet lived up to expectations.

Nevertheless, he is in luck. Firstly, the electoral cycle means that this upset is occurring at the beginning of his term; there will be time to recover. Secondly, although Wüst gets first crack at forming a government, the Greens are his only real potential partner – and will take a lot of courting. NRW Greens are on the more left-wing end of the spectrum and will play the field, potentially trying to usher in a mini traffic-light coalition in Düsseldorf if it looks feasible later.

READ ALSO: OPINION: Scholz is already out of step with Germany – it’s time for a change of course

Growing support for Greens

So after the post-Merkel rout, the CDU has scored an important and much-needed victory, but harnessing it to get momentum nationally may yet prove difficult. Indeed, it’s the Greens who have come out of the last two weekends with a new swing in their step. Following a disappointing national election last year, they have once again hit their stride, due in no small part to the Ukraine reminding voters of why renewable energy is important on the one hand and the impressive figures cut by Robert Habeck and Annalena Baerbock in government on the other.

For the FDP, things are not looking so good. Despite negotiating a disproportionately high amount of their manifesto into last year’s agreement, they are suffering the fate of many a junior coalition partner: a lack of profile. On strictly regional terms, they lost votes to the popular Daniel Günther in Schleswig-Holstein (perhaps unavoidably, despite a good record as part of his coalition) and to the not-yet-popular Hendrik Wüst (following lacklustre performance in government in Düsseldorf).

Greens party posters NRW

Posters featuring Greens candidate Mona Neubaur highlight the link between fossil fuels and Russia’s authoritarian leadership. Photo: picture alliance/dpa | Roberto Pfeil

Worryingly for Christian Lindner, however, this may be harbinger of history repeating itself. Essentially, FDP voters tend to get enthusiastic for a business-friendly go-getter type who promises to lower taxes and slash regulation, only to later turn their back on him when, once part of a coalition government, he proves unable to deliver the small-state free-for-all promised. That’s what happened to Guido Westerwelle in the 2009-2013 administration, in any case.

There is, however, one bit of unadulterated good news for all parties and indeed our country as a whole: the AfD lost vote share everywhere. The populist outfit didn’t even make it into parliament in Schleswig-Holstein and only just scraped in in NRW. It would seem that, in times of crisis, voters don’t want to add to the list of potential disasters by putting populists anywhere near power. This is a hypothesis we’ll be able to test in just under six months’ time, by the way, when Lower-Saxony goes to the polls on 9th October. 

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