Schroder's Nervous Days

By ANDREW PURVIS

Just how doomed is German Chancellor Gerhard Schroeder's political future? His party, the Social Democrats, suffered a decisive election defeat last week in the party's longtime stronghold of North Rhine-Westphalia--a loss so humiliating, the country's media likened it to George W. Bush's losing Texas. But once the returns were in, Schroeder shocked the country right back by putting his job on the line and calling for national elections in September, a year earlier than originally scheduled. Was Schroeder, who has served as Chancellor since 1998, cannily distracting voters from his party's loss or, as a commentator put it, committing "political suicide to avoid murder"?

In an interview with TIME, Schroeder, 61, vowed he would prevail. "Giving up is not one of my character traits," he said. But lately the leader of the world's third largest economy has certainly looked in political peril. The nation's unemployment rate is at a post-World War II high of nearly 12%, and the rate of business closures has reached record levels. As a result, the Social Democrats trail the conservative Christian Democrats, the main opposition party in the fall elections, by 15 points in opinion polls.

The leader of the Christian Democrats is Angela Merkel, who, as a protege of former Chancellor Helmut Kohl's, is known to be a tough political fighter, if lacking in Schroeder's campaign experience. Should her party succeed in September, Merkel, 50, a former physics professor who was raised in East Germany, would become Germany's first female Chancellor. She has said her immediate focus would be domestic issues, particularly the economy. (She supports loosening job-protection laws, overhauling pensions and curbing the power of trade unions.) But on international affairs, she is likely to be somewhat friendlier to Washington. While Merkel has criticized the stridency of Schroeder's Iraq-war opposition, a spokesman for her party said that like the current government, the Christian Democrats would not support sending German troops to Iraq. --By Andrew Purvis