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February 11, 2019

SPD dumps Hartz IV

The SPD has officially dumped the Hartz IV reforms - the  social policy reforms Gerhard Schröder initiated in 2003 and which have since become the main reason for the SPD's political decline. The decision, taken by the SPD's leadership over the weekend, is significant for two reasons. It could presage an early end of the grand coalition: a clear dividing line between the two partners has emerged for the first time. And second, it could help entrench the leadership of Andrea Nahles and forestall a leadership challenge by Sigmar Gabriel. It is no coincidence that Schröder, author of the Hartz IV reforms, recently came out in favour of Gabriel as SPD leader. This was not about Gabriel but about his one and only political legacy. 

We noted a comment from one of the SPD leaders that Nahles' main achievement during this debate was not to have pushed for the agreed compromise, but to have allowed this debate to happen with an open outcome. The decision also has the backing of Olaf Scholz, another of the architects of the original system.

Under the SPD's new plan Hartz IV, a long-term unemployment subsistence scheme, is to be replaced by a universal citizen's income, very much like the one the Italian government has just introduced. The difference between the two systems is not one of  principle but of degree. Under a citizens' income everybody has a right to it - with exceptions. Under Hartz IV, it works the other way round: you can apply for it and have to prove your entitlement. The SPD wants to lengthen the period of unemployment insurance coverage by nine months - from a current maximum of twelve months. The conditions for the citizens' income would be softer than for Hartz IV. The means-testing of the current system would be suspended for the first two years. Some of the Draconian penalties of the system would be eliminated, and there would be a special universal basic income specific for children - with no means testing whatsoever.

The SPD has also voted to raise the statutory minimum income from the current €9.19 per hour to €12. 

In the absence of a coalition with the Left Party and the Greens, there is no chance that the SPD can implement most of this agenda, given the CDU's extreme hostility to it. The real significance of this change in policies is different and more wide-ranging. 

Jaspar von Altenbockum made an interesting observation about Nahles' role in the SPD. He said Schröder has become the mouthpiece for those in the SPD who treat Nahles in the way Merkel used to be treated in the CDU. A big error of judgement, as it has turned out.

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February 11, 2019

Macron's revival

For every social movement there comes a pivotal moment where its own survival is at stake, internal inconsistencies come to the forefront and circumstances simply change the game. Have the gilets jaunes reached such a moment? For Emmanuel Macron, at least, the gilets jaunes have enabled a rise in the polls even if he remains fundamentally unpopular among the French public.

The numbers of weekly protesters continued to decline last Saturday as the movement's various leaders turn against each other or lose followers. The circulating video footage about clashes amongst gilets jaunes and the destruction of a bus stop also strengthen the impression that the street is now only for the hard-core militants. We would not be surprised to see protest numbers falling further.

For Macron, the gilets jaunes now seem to have been a blessing in disguise. An Ifop-Fiducial survey revealed that Macron's approval rating had jumped up 6 points since mid-January. This a full 11 points above his lowest approval rating of 23% in the December poll. Why the rise? There are three reasons according to Frédéric Dabi in L'Opinion. First, the gilets jaunes gave him a platform to campaign again. With the grand débat he signalled proximity, and in these debates with the mayors he demonstrated his extraordinary ability to be on top of dossiers and arguments. Second, Macron benefits from the extraordinary weakness of his opponents. And last but not least, the protests allowed him to mobilise right-wing support. The violent clashes helped to prop up support for a strong Republican response, amongst Les Républicains voters he is up 12pp. The only other politician to rise in the polls is Marine Le Pen, with 4pp. 

Macron is still not a popular president, 64% disagree with him. He still feeds resentment and a sense of social injustice among the less successful. But he has managed to grab the public's attention right now, and the government seems keen not to lose that connection. What will happen once the grand débat is over will be the next development to watch out for.

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