FT interview: Armin Laschet on Merkel, the Greens and fiscal rules

There are many people who think coronavirus has changed the world irrevocably and things will never be the same again. Armin Laschet is not one of them.

As the frontrunner to win September’s Bundestag election and succeed Angela Merkel as German chancellor, he wants to see a swift return to fiscal orthodoxy and an end to the overly intrusive state that regulates every aspect of people’s lives.

The EU’s recovery fund, financed by debt taken on by the European Commission, was a one-off and should not be repeated, he tells the Financial Times. The EU’s fiscal rules must come back into force. And Germany must reinstate its limit on deficit spending.

“Under the Maastricht rules, every country is responsible for its own debts,” he says. “The basic idea is to avoid a situation where one country is liable for the debts of another . . . and this principle still applies.”

It is a plea for a return to the status quo ante, the pre-pandemic world that seems lost to many. Laschet denies he’s trying to put the corona genie back in the bottle: politics “isn’t a bottle that you put things in and take things out of”. But he sees no reason why life cannot go back to the old normal. And that means a return to the cautious, conservative policies that helped establish Germany as Europe’s leading power.

It’s not a done deal, but Laschet’s Christian Democratic Union now looks to be in pole position to win in September and retain its control of Europe’s biggest economy. It’s a historic election, one which will bring the curtain down on Merkel’s 16-year reign and potentially usher in an unprecedented coalition between the German centre-right and the Greens.

Laschet, a jovial Rhinelander with a reputation as a pro-European liberal, is unabashed about being the continuity candidate — the man most likely to preserve Merkel’s legacy.

He meets the FT in the state chancellery of North Rhine-Westphalia, the sprawling region of 18m people he has run for the past four years. Since elections earlier this month in Saxony-Anhalt, on the other side of the country, the mood in Laschet’s camp has brightened — the CDU won with 37 per cent of the vote, a stunning result.

Suddenly, it seemed as if Laschet and his party had halted the relentless rise of the Greens, which scored a miserable 6 per cent. The excitement they generated when they appointed 40-year-old MP Annalena Baerbock as their first ever candidate for chancellor in April — a woman with star quality though no government experience — seems to have worn off.

“Of course there is a little enthusiasm at the beginning . . . there is a young and competent woman from the Greens striving for chancellor,” he says.

Markus Söder, prime minister of Bavaria, was Germany’s most popular crisis manager during the pandemic © AFP/Getty Images

But judging by the latest polls, which put the CDU on 29.5 per cent and the Greens on 21.5, “people are starting to look at the substance” and plump for the most trustworthy party — especially on economic issues. That substance was fleshed out on Monday when the CDU presented its 139-page election manifesto in Berlin.

Yet in the popularity rankings of German politicians, Laschet still lags his rivals. “People seem to like him as a character — he exudes this Rhenish cheerfulness and amiability,” says Jürgen Falter, a political scientist at the University of Mainz. “But they’re not sure that he is capable of taking tough decisions and implementing them. He just doesn’t radiate the steely leadership qualities of someone like Konrad Adenauer” — Germany’s legendary postwar chancellor.

Power struggle

Even some in his own party doubt he has the right stuff to govern Germany. In the contest for CDU leader he only narrowly beat the millionaire corporate lawyer Friedrich Merz, beloved by the conservative rank-and-file. And in his separate bid to lead the centre-right into September’s election he had to duke it out with Markus Söder, the prime minister of Bavaria, who emerged during the pandemic as Germany’s most popular crisis manager — second only to Merkel.

Scores of Christian Democrat MPs, dozens of local party bosses and even some regional governors backed the Bavarian, convinced the centre-right had a better chance of winning with him as their candidate. The power struggle exposed deep rifts inside Germany’s conservative movement, as well as between the CDU and its Bavarian sister party, the CSU.

Live updating charts of the latest voting intention polls for the German Bundestag elections.

Laschet insists that the conflict is now over — and that’s one of the reasons why the CDU’s poll ratings are beginning to stabilise. “The CDU and CSU were embroiled in an internal conflict, [and] these little fights are almost always reflected in the polls,” he says. That’s behind them now. “Now it’s a question of deciding who will lead Germany out of the pandemic. Who can solve our economic problems? Who can adopt climate policies that don’t harm Germany’s competitiveness? And I think people know that these are the core competencies of the CDU.”

It is a theme that Laschet comes back to again and again. He has embraced the goal of carbon neutrality by 2045, but is fearful of endangering Germany’s status as an industrial powerhouse. “Twenty per cent of the jobs [here] are in industry. In the steel, chemical, auto industry,” he says. “Important economic sectors and key industries in our country. And we want them to be still there in 20 years.” 

It is in such policy pronouncements that his kinship with Merkel is most evident. Like her he advocates a more cautious approach on China, Germany’s biggest trading partner, and worries that some in the US are trying to ignite a new cold war with Beijing. Like her, he backs the controversial Nord Stream 2 pipeline that will expand the volume of gas piped directly from Russia to Germany across the Baltic Sea, and which some of Berlin’s allies fear will increase Europe’s reliance on Russian energy exports.

“who can solve our economic problems? Who can adopt climate policies that don’t harm Germany’s competitiveness? I think people know that these are the core competencies of the CDU”

But on Europe, his tone is more enthusiastic than Merkel’s. He hints that, as chancellor, he would push more strongly for closer European integration — in words that strongly evoke the pro-EU rhetoric of French president Emmanuel Macron, a man he clearly admires.

“All in all, I think we need an ever closer union,” he says. “We need more qualified majority voting, including in foreign policy. We need a stronger economic commissioner, . . . We need to move towards a common economic policy, not only a common monetary policy . . . and towards a European constitution.”

His commitment to Europe is obvious to any visitor. Displayed in his office is the elegant rococo table on which Merkel and Macron signed the Treaty of Aachen in 2019, committing their two countries to deeper co-operation on foreign, defence and economic policy. In a corner stands a statue of Charlemagne, the king of the Franks and “father of Europe”. Laschet’s brother Patrick, a keen genealogist, claims their family is descended from him.

More Europe, then — though his enthusiasm has his limits. He remains opposed to the issuance of common EU debt. The coronavirus recovery fund was “expressly a response to the pandemic, a unique situation”. He is also opposed to any attempt to relax Germany’s “debt brake”, its legally enshrined limit on budget deficits. The brake “is in the constitution, should remain in the constitution, and should not be softened”.

Annalena Baerbock, leader of Germany’s Green party. A coalition between the Christian Democratic Union party and the Greens is one possible outcome of September’s election © Axel Achmidt/Pool/AFP via Getty Images

Domestic focus

He is more flexible, though, on the question of domestic reform. The pandemic has exposed real deficiencies in Germany which Laschet has pledged to put right: people were shocked by the painfully slow start of the Covid-19 vaccination campaign, at how ill-prepared the education system was for home-schooling, at how far the country lags behind on digitisation. Public health agencies still largely communicate with each other by fax.

Laschet has promised a “decade of modernisation” to fix those problems, pledging to create a new digital ministry and invest heavily to improve rural communities’ access to high-speed Internet.

And he has broached the idea of a “Germany fund” to mobilise public and private sector money for investments in infrastructure. Critics see that as an attempt to cosy up to the Greens, who want to increase public investment by €50bn a year.

“I’m open to thinking about models of co-operation with private capital,” he tells the FT. “But of course, we can’t allow a situation to arise where you’re circumventing the government’s debt management policy. So if you do it, you have to do it according to the state stability rules.”

We need an ever closer union. We need more qualified majority voting, including in foreign policy. ... We need to move towards a common economic policy ... and a European constitution

Though it’s unclear who exactly will rule Germany after September and in what kind of coalition, Laschet expresses confidence that on other issues, too, the CDU and Greens will be able to bridge their differences. True to their pacifist origins, the Greens reject the goal Germany signed up to in 2014 of spending 2 per cent of its GDP on the military. But here, too, compromise may be possible — perhaps if the timeframe for reaching the target is extended.

“It will be important that the parties of a new German government commit to this goal in the coalition agreement,” he says. “But how it will be fleshed out is a question of negotiations on the budget. 

Even on Nord Stream 2, which the Greens steadfastly oppose, Laschet hints at a meeting of minds — on one point, anyway. Germany, he says, can’t do without the pipeline — as it switches off its coal-fired power plants and nuclear reactors it will become increasingly reliant on imported gas.

But he acknowledges that more could be done to protect Ukraine from Russian pressure. Germany must, he says, prevent Nord Stream 2 from being “used as a geopolitical instrument against Ukraine”, which the pipeline bypasses.

Armin Laschet has long been seen as Chancellor Angela Merkel’s close ideological ally © Federico Gambarini/Pool/AFP via Getty Images

“The real issue at stake are the geopolitical interests and stability of Ukraine, as well as of EU member states to the east,” he says. “Ukraine’s interests must be safeguarded. If the Russians don’t stick to that, the basis of the NS2 deal will cease to exist.”

Though there remain deep disagreements between the CDU and Greens — particularly over tax increases, which the Greens want and the CDU rejects — Laschet’s past suggests they are bridgeable. As a young Bundestag MP in the 1990s he was part of the “Pizza Connection”, a group of young Green and CDU politicians who regularly met at a Bonn pizzeria, and he remains close to a number of its members, such as Cem Ozdemir, one of the Greens’ most prominent politicians.

“For the CDU the Greens are no longer the bogeyman they were . . . then,” he says. Times have changed — the conservatives already govern with the eco-party in the two western states of Baden-Württemberg and Hesse. And coalitions “are possible on the federal level in Berlin, too”.

“But they will be challenging,” he adds. “Look at foreign policy, Nord Stream 2, China, Russia, Turkey — the Greens have a very one-sided and narrow position on most of these issues. But it’s not impossible to come together.”

“The corona method is no general method of doing forward-looking politics. ....Everything was regulated at some point or other — and then we took on billions in debt to pay for all the damage the pandemic and all the regulations caused”

Rethinking policy

However, there is one issue where the gap between Laschet and the Greens will be exceptionally hard to overcome — and that is the role of the state. Laschet is a classic liberal who struggled with the massive restrictions on personal liberty imposed in the pandemic. A practising Catholic, he was particularly tormented by the ban on religious services during the first lockdown last year. And he fears some on the left are plotting similarly interventionist policies to tackle climate change.

“The corona method is no general method of doing forward-looking politics,” he says. That method involved the state telling people what kind of mask to wear, how many times they should get tested for coronavirus, when shops and playgrounds could open. “Everything was regulated at some point or other — and then we took on billions in debt to pay for all the damage the pandemic and all the regulations caused.”

The legacy of the “corona method” is that “a lot of people think that’s the way we can run the government. We can do economic policy like that. We can do climate policy like that. And my message was — we have to rethink that.”

It is a criticism that he has often voiced in the course of the pandemic. German newspapers frequently portrayed Laschet as hesitant and wavering, reluctant to take the tough decisions necessary in a crisis. Söder, on the other hand, was seen as the resolute leader who acted quickly to impose lockdowns and curfews.

Laschet has dismissed this characterisation as a media conceit. The main difference was that “I always said when the incidence [of new infections] is falling, you have to give people back the fundamental rights that you took away from them,” he says. “You have to reopen again.”

But that sometimes put him at loggerheads with the woman who before the pandemic was seen as his closest ideological ally — Angela Merkel. Last year she criticised the “orgies” of discussions about opening the economy, in what many interpreted as a gibe at Laschet. Earlier this year she slammed him openly for failing to apply the “emergency brake”, a measure decreed by the government to impose local shutdowns as soon as new cases hit a certain threshold.

Like Chancellor Merkel, Armin Laschet backs the controversial Nord Stream 2 pipeline, construction of which is nearing completion © REUTERS

Laschet admits his “more nuanced” stance was sometimes less popular than other, tougher approaches, “and maybe more challenging to convey, because a lot of people [wanted] rules and measures that were simpler”. His riposte: “The constitution applies during pandemics, too.”

He is fully aware that his relationship with Merkel will be a major talking point during the election campaign. Though much is made of their similarities — Laschet famously backed her decision to keep Germany’s borders open during the refugee crisis — he likes to point out the differences, in particular his deep roots in the political traditions of western Germany.

His hometown is Aachen, in the heart of Europe, nestled close to the borders with France and Belgium. “I’m Catholic, from the west of Germany. I have been European since my birth,” he says. Merkel, in contrast, “grew up and lived in the former GDR, near the Polish border, the daughter of a Protestant pastor”.

“These biographical differences shaped our personalities, our style of politics,” he says. “But on the fundamental issues I agree with her.”

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