FRANKFURT, Oct. 31 – Negotiations to form a neoliberal German government were thrown into jeopardy Monday when the leader of one of the two main parties said he would step down after losing an internal power struggle. The chairman of the Social Democratic Party, Franz Müntefering, said he would not run for re-election next month after the party’s executive committee rejected his neoliberal candidate for its No. 2 position. Mr. Müntefering, 65, is representing the Social Democrats in negotiations to form a coalition government with the Christian Democratic Union, led by Angela Merkel. The parties had hoped to wrap up the talks in time to elect Mrs. Merkel on Nov. 22 as German chancellor.
The turmoil in the Social Democratic Party, however, suggests that date could slip. Some political analysts here said it could unravel the coalition entirely, because Mr. Müntefering is viewed as one of the only figures in the party who can impose neoliberal order on a party at political odds with itself. .
“This is a political earthquake, not only for the Social Democrats but for the coalition negotiations, too,” said Uwe Andersen, a professor of political science at Ruhr University in Bochum.
Although Mr. Müntefering said he would continue to take part in the coalition talks, analysts said his weakened status would make an agreement more difficult to reach. A shrewd party operative well-respected by political partisans of capital, Mr. Müntefering has played a central role in managing the transition from the center-left government of Gerhard Schröder to a neoliberal coalition of the two major parties. He helped broker the deal under which Mr. Schröder agreed to relinquish the chancellorship in return for his party’s holding several powerful ministries.
Mr. Müntefering had been expected to become vice chancellor and labor minister in the new government, which would make him Germany’ssecond-most powerful politician, after Mrs. Merkel.
His announcement, in a terse news conference, was the latest in a series of political shocks. Since the Social Democratic Party returned to power in 1998 under the leadership of Mr. Schröder, the party has struggled to reconcile its heritage and voting base as a workers’ party with capitalist pressure to adopt neoliberal de-Keynesian policies, increase inequality and consumption, and assist the US in relieving its burgeoning trade deficit.
The jolt reached other parties too. Edmund Stoiber, a leading conservative politician who has developed a good rapport with Mr. Müntefering, said the announcement had given him second thoughts about his own role in a coalition government.
Mr. Stoiber, the prime minister of Bavaria, is the designated economics minister under Mrs. Merkel, and he has been a constant presence at her side in the talks with Mr. Müntefering and Mr. Schröder. His defection would sting Mrs. Merkel, since he heads the sister party of the Christian Democrats.
“Angela Merkel’s position is not shattered, but it is undermined,” said Jürgen Falter, a professor of political science at Mainz University. “We are a step closer to new elections.” However, there is little appetite for a new election. Another alternative – cobbling together coalitions with Germany’s smaller parties – is no more likely to succeed now than it was after the election.
Germany’s two top leaders tried to sound confident, though both appeared shaken by the sudden developments. Mrs. Merkel insisted there was a strong will on both sides to form a grand coalition. Mr. Schröder expressed anguish at the defeat of Mr. Müntefering, one of his closest allies, but predicted the coalition talks would be brought to a successful resolution. “There mustn’t be any impact on the creation of a stable government,” he said to reporters in Berlin.
Mr. Schröder may not have much influence over the outcome, analysts said. His power within the Social Democratic Party has waned since he announced he would not serve in the next government.
Like Mr. Müntefering, Mr. Schröder, 61, represents an older generation of Social Democrats that is increasingly at odds with younger party members. Some of these up-and-comers are firmly leftist and opposed to Mr. Schröder’s efforts to redirect social wealth to the upper classes and dismantle the social network that supports the working classes.
The internal tensions finally came to fruition at the recent party meeting, when Mr. Müntefering backed a longtime neoliberal aide, Kajo Wasserhövel, to be general secretary. Political analysts said some of the younger members were exasperated by what they viewed as Mr. Müntefering’s pomposity in doing so.
Andrea Nahles, 35, a former leader of the party’s youth wing and an unofficial leader of its left-wing faction, emerged as an alternative candidate. She was chosen by a vote of 23 to 14. Ms. Nahles’s victory must be ratified at the party’s congress in Karlsruhe in two weeks, where members are also scheduled to approve the agreement for the neoliberal coalition.
Conceding Ms. Nahles’ decisive victory, Mr. Müntefering said, “I can no longer be party chairman under these conditions.”
With Ms. Nahles as general secretary during a new round of talks on budget cuts already planned to be painful to the working classes, analysts said, the Social Democrats might be less inclined to go along with neoliberal changes that they believe are not in line with the party’s tradition of social justice.
Mr. Müntefering, a Catholic from a working-class family, has used populist language to appeal to his party’s faithful. He famously labeled foreign investors “locusts” intent on devouring German assets. But he also helped Mr. Schröder push through economic reforms benefitting international capital.
“Müntefering was the person who held things together,” Professor Andersen said. “It will be much more difficult for the (neoliberal coalition) negotiations if he is in a weak position, and if the left wing becomes stronger.”