Contrary to many common expectations for a Grand Coalition, Chancellor Angela Merkel's 2005-2009 CDU/CSU-SPD government produced few major policy changes. Its modest output is generally attributed to polarized competition between two co-equal, longtime rivals that blocked cooperation. Yet, interparty gridlock was less decisive than intraparty paralysis. The CDU, CSU, and SPD formed a government at the very time when each was plagued by internal divisions over programmatic identity, fueled in turn by interrelated strategic and leadership struggles. The result was caution, confusion, patchwork measures, side payments and reversals.
That old cliche Wechselbad der Emotionen aptly describes how Christian Democrats have felt since Germany’s September 1998 federal election. First came a crushing defeat, their worst showing in decades, and the end of sixteen years in power under Helmut Kohl, “chancellor of unity.” Two of Kohl’s proteges, newly chosen federal party and Bundestag caucus chair, Wolfgang Schäuble, and his handpicked general secretary, Angela Merkel, then helped the CDU to an unexpectedly rapid recovery: during 1999, the party gained ground in every Land-level election and an absolute majority of the vote in several contests. But even before their champagne went flat, party leaders found themselves mired in postwar Germany’s worst political finance scandal, triggered by revelations about Kohl’s penchant for long sustaining a personal slush-fund with large, unreported private contributions, and even by charges of bribery.
It was the biggest political scandal in postwar German history. As revelation followed revelation in late 1999, the Christian Democratic Union (CDU) party finance (Parteifinanz) affair tarnished careers, most notably those of former chancellor Helmut Kohl and, separately, his longtime heir apparent Wolfgang Schäuble. When both fell, their party gained a new cadre of leaders. Most analysts expected the fallout ultimately to spread much further, fatally crippling the CDU and perhaps destroying it altogether. Voices could be heard to the effect that this scandal was on the same scale as one that rocked Italy a decade earlier, when the "Clean Hands" investigation unearthed massive evidence of bribery and corruption.
As chair of the CDU in 2000, and of its joint Bundestag caucus with the CSU in 2002, Angela Merkel was the fist woman and fist easterner to head a major German party; she had risen as a protege of Helmut Kohl, but breaking with him over his financial improprieties vaulted her into power. These features of her biography made her leadership unconventional. So too did her style, characterized by interpersonal reserve and lack of charisma. Merkel's views on cultural issues and economic policy-in particular, reform of the welfare state-were more liberal than those of her Union's mainstream. Finally, her resources within the CDU/CSU were limited to a loose network of younger outsiders, who helped sustain her against rivals at the Land level. While Merkel survived a poor CDU/CSU election in 2005 to become chancellor, her time as opposition leader suggested that she would struggle in that role too, yet also served as a caution against underrating her.