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.