Crisis, Conflict and Class Struggle
The end of the coalition between the Social Democratic Party (SPD), the Greens and the Free Democratic Party (FDP) on the evening of 6 November did not really come as a surprise. The crisis of the Ampel (‘traffic light’) government had steadily deepened in recent weeks and months, and the coalition parties appeared increasingly incapable not only of formulating a common policy but even of holding joint summit meetings on the economic crisis. The outcome of the three East German state elections in September, the continued economic crisis and the ever louder demands of capitalists for an ‘economic turnaround’ had increased the pressure on the coalition.
The collapse of the government, the election of Donald Trump as the new US president, the economic crisis and global geopolitical conflicts certainly mean that many people are very worried about the instability of the situation and about their future. The trade unions and the Left Party (Die Linke) must respond to this with a determined counter-programme to all pro-capitalist parties.
Background: Economic Crisis
‘Germany is a country full of strengths and strength’. In October, Green Party Economics Minister Robert Habeck tried to use such self-affirming phrases to portray the gloomy economic figures that his ministry had to present. From then on, the ‘traffic light’ government expected a recession in 2024, for a second year in a row. This has only happened once before since the founding of the Federal Republic of Germany – in the 2000s, when Germany was considered the ‘sick man’ of Europe.
This crisis is particularly evident in international comparison. While Germany’s real gross domestic product in mid-2024 was only slightly above its level at the end of 2019, the US (with ten per cent higher) and the eurozone as a whole (almost four per cent) are well ahead in terms of economic growth. Germany is bringing up the rear in terms of growth in the G7 and has gone from being an engine to a brake on economic growth in the EU – and is once again being referred to as the ‘sick man of Europe’.
The German economy is based more than those of other countries on the export of industrial goods. A quarter of value added comes from industry. The decline in this area is all the more serious. By mid-year, total industrial production was fifteen per cent below the level at the end of 2017.
A look at the reasons shows that a rapid and sustainable recovery is not on the cards: global overcapacity due to the weakening world market plus more competition, especially from companies in the US and China alongside higher energy prices, a lack of investment and a shortage of skilled workers. On the contrary: a new shock, for example in the financial markets or in the form of other events, such as a further increase in tariffs and import restrictions triggered by Donald Trump, could further fan the flames of crisis.
This is particularly evident in the automotive industry, the core of the German economy. Increasing competition, especially from Chinese and US companies, and falling demand on the world market are threatening the profits and dividends of shareholders. The VW management, which is launching a full-frontal attack with the historic threat of at least three plant closures in Germany, a ten per cent cut in pay and the termination of job security, speaks of an overcapacity totalling around two million cars in Germany. Tens of thousands of workers and entire regions are potentially affected by this alone.
In the supply industry, job cuts are in full swing, and there are also cutbacks in the chemical industry or in steel with the threats at ThyssenKrupp Stahl to destroy thousands of jobs.
The export-oriented industry was once a strength of the German economy in international competition. Unlike hardly any other economy German capitalism benefited from the rise of Chinese state capitalism and its integration into the world market, as well as from the creation of the European single market. After the world economic crisis of 2007-2009, demand was particularly high in China, and German entrepreneurs were able to use the euro’s exchange rate to sell their goods more cheaply. A decisive prerequisite for this was also the historic attacks on the working class in the form of the neo-liberal Agenda 2010 launched by a Social Democrat-Green government and the creation of a huge low-wage sector in the mid-2000s. Similar far-reaching ‘reforms’ are now being demanded by capital again.
The pandemic and the war in Ukraine have accelerated crisis processes and contradictions in a world economy already groaning under major structural problems and overcapacity. They have led to a particularly sharp drop in demand and higher costs, including for energy supplies, but were not the underlying cause of the crisis. These contradictions arise from the insoluble contradictions of capitalism, which attempts to control an internationally and socially diversified production of goods while maintaining private ownership of the means of production and the continued existence of nation states. The competition for profits, which is inherent in capitalism, inevitably leads to crises in sales and overcapacity, but also to conflicts and tensions between states. These are much more pronounced today, and the increasing protectionist measures, such as tariffs, particularly affect export-oriented companies.
These contradictions are also partly to blame for the ‘domestic’ problems of German capitalism. Contrary to capitalist fairy tales that profits naturally lead to new private and public investment and thus to increases in productivity, there is a major investment and productivity crisis (even by international standards). No EU country has invested so little in public infrastructure in terms of economic output between 2000 and 2020 as Germany. The share of private net investment has been below two per cent of GDP since 2020. Capital has preferred and continues to prefer quick profits through speculation rather than the satisfaction of social needs. This also explains why, despite news of recession, there is a party atmosphere on the stock market with the Frankfurt DAX index reaching a record-breaking high of 20,000 points in early December.
The crisis in the major industrial sectors will also have an impact on the rest of the economy. Although the total number of people in employment has recently risen slightly, the unemployment rate also climbed to six percent in October. In particular, the number of better-paid industrial jobs has fallen by hundreds of thousands in recent years (and continues to do so), while there has been an increase in services, especially state-related ones. For the employees and the working class as a whole, this shift therefore means a loss of income, which also depresses private consumption. The labour shortage is currently still slowing this development somewhat, as the bosses have to consider whether they will be able to rehire suitable personnel so quickly in the future.
But that does not stop individual companies from doing what they consider necessary to save their profits. Thus the billions in profits made in recent years continue to flow into the pockets of shareholders. Under capitalism, such crises are inevitable and they are ‘resolved’ at the expense of the workers – through job cuts and wage cuts, relocation to ‘low-wage countries’, plant closures, increased work pressure, and, in short, more exploitation. A break with the profit motive, democratically controlled and managed public ownership of large banks and corporations and a socialist transformation are therefore urgently needed to save all jobs and to reorganise the economy sustainably and democratically.
Background: State Elections
September’s state elections in Saxony, Thuringia and Brandenburg saw a drubbing for the Ampel coalition parties. Judging by previous polls, which suggested that the SPD, Greens and FDP might miss out on entering one or other of the state parliaments, the worst-case scenarios had not materialised (except for the FDP, but that was to be expected). While this meant that the coalition was not immediately voted out, the election results deepened instability and conflicts between the parties of the coalition.
The elections also mark a turning point for the entire party landscape—and not only in East Germany. Nevertheless, it is no coincidence that here, of all places, more than thirty years after capitalist restoration, the decline of the established bourgeois parties is so stark. The far right AfD was strengthened enormously. The successes of the conservative CDU and Social Democrats (SPD) in Saxony and Brandenburg were not based on support for their parties, but mainly on fear of the AfD. Despite an increase in voter turnout, only the CDU and SPD remain in the Brandenburg state parliament as ‘established’ parties, alongside the AfD and BSW, the recent right wing split from the Left Party. The elections are an expression of polarisation, of fears and, above all, of dissatisfaction with the social and political conditions among the majority of the population.
The growth of the AfD is a serious danger. It also takes place against the backdrop of the racially charged migration debate, which intensified again after August’s attack in Solingen by an apparent ISIS supporter. The measures to tighten the asylum law, which were passed in record time by the coalition government and demanded by the CDU, could have been taken from any AfD programme. None of this will make us any safer. But that didn’t stop anyone from voting for AfD – once again, people tend to vote for the original rather than the copy.
The so-called ‘firewall’ against the AfD does not yet seem to be falling at the state level, even though Saxony’s Prime Minister Kretschmer has held surprising talks with the AfD and voices within the CDU are becoming louder, questioning this firewall. But this will not weaken the AfD and it can be assumed that the right-wing populists will be the profiteers when all the other parties form the state governments in one form or another. The same applies to the debate about banning the AfD and the possible initiation of prohibition proceedings. This will enable the right-wing populists to present themselves as victims of state arbitrariness and as defenders of democratic rights, and the effect will be that support for the party will be further consolidated or even more people will be driven into its arms.
The proportion of those who stated in the post-election survey that they voted for the AfD ‘out of conviction’ has increased. This is a warning signal for leftists and trade unionists, because it is an expression of the entrenchment of prejudices, racism and reactionary ideas. The task of ‘winning back’ some of these people is becoming more difficult as a result, but it is also becoming more urgent and is achievable! But this can only be done against, not with, the established bourgeois parties. The AfD thrives on social grievances and anger at the establishment, not least because there is no strong, credible left-wing alternative. The joint struggle against these social injustices, regardless of nationality, origin, religious affiliation, sexual identity or orientation, will be crucial to pushing back prejudice and racism and effectively undermining support for the AfD – because they themselves stand for anti-working class policies, which must be exposed.
Conflicts Among Friends of Capitalism
The conflicts in the now-shattered coalition express different ideas among different representatives of capitalism about how their system can best be maintained. No part of this government represents the interests of the working population. There is agreement on many issues: improving the conditions for profit for banks and corporations, supporting the Ukrainian war effort and Israel’s war against the Palestinians, arming the Bundeswehr (military) and militarising society, restricting migration and deporting refugees. There is disagreement about the best way to achieve these goals.
Put simply, two strategies are clashing: a frontal assault on the working class or an attempt to involve the trade union leaderships and carry out attacks in a somewhat less harsh or piecemeal fashion. The conflict over the ‘debt brake’ expresses this in a distorted form – distorted because some sections of capital, including the head of the Bundesbank (Germany’s central bank), also favour a reform of the ‘debt brake’ in order to gain more leeway for state investments that serve their profit interests (not to enable socially useful and necessary investments in education, health, the environment, social services, etc.).
FDP: curse ahead?
The background to the collapse of the coalition, provoked mainly by the FDP, is also the daily growing demands of capital representatives for a so-called economic turnaround. By this they mean drastic attacks on the rights and living standards of the working population, tax breaks for capitalists, etc. – something we have been warning against for months and why Sol members launched the ‘Wir schlagen Alarm’ (We are sounding the alarm) campaign together with other militant trade unionists. A paper from FDP leader Lindner presented a programme for this ‘economic turnaround’ demanded by the capitalists. At the same time, as stated in the bourgeois media, it was a ‘divorce paper’ and a provocation to the SPD and the Greens, who could not let it go unanswered without losing face. Apparently, Scholz and Habeck then decided not to jump through this Lindner-stretched hoop and to make the question of declaring an emergency to suspend the ‘debt brake’ due to the war in Ukraine a breaking point.
Politically, the FDP has taken the bull by the horns. Whether this will be successful or turn out to be a ‘suicide out of fear of death’ remains to be seen. The FDP has been damaged by the revelation that they had been planning in detail how to leave the coalition before they were thrown out, something they had previously denied. But all the parties in the coalition must have weighed up whether muddling through a permanent crisis and a de facto ten-month election campaign until the regular election date in September next year would have improved their starting position. Apparently they have come to the conclusion that this would not have been the case and that an end with a fright would rather give them a chance to make up ground in an intensive four-month election campaign.
SPD will signal left
Chancellor Scholz’s strategy will be to attack the FDP and the CDU as anti-social and anti-working class (rightly so) on the one hand, and probably to make some left-wing demands such as an increased minimum wage, a collective bargaining law, etc., while at the same time defending the policy of rearmament and support for the capitalist and nationalist Zelensky regime in Ukraine as a “security policy”. This will also mean that the militarisation of society will continue.
By offering the CDU/CSU ‘constructive cooperation’ until new elections can be held, Scholz hopes to show up the CDU by making a clear divide between them and the SPD. It remains to be seen whether the minority government, which now consists of the SPD and the Greens, will be able to muster a majority in parliament for any measure in the coming months. Postponing the budget decision for 2025 could have catastrophic consequences for federal states and municipalities, and for many independent organisations and projects there, leading to cuts and job losses.
With the end of the coalition, the election campaign has now begun anyway. It cannot be ruled out that the prospect of new Bundestag elections will influence the process of forming a government in Saxony, Brandenburg and Thuringia and may contribute to new elections also being held in one or more of these federal states. Even before the end of the coalition, the BSW in Saxony broke off exploratory talks with the CDU and SPD.
The Sahra Wagenknecht Alliance (Bündnis Sahra Wagenknecht, BSW)
The BSW managed a flying start and double-digit results in the East German state elections, eight months after its founding. Those who voted for the BSW because of its clear position against arms deliveries and war policy and the desire for more social policies will now have hopes. But the BSW will disappoint these hopes. Wagenknecht’s party is a party that does not rely on class struggle and doesn’t want to overcome capitalism. Its fundamental willingness to form a coalition with the CDU and SPD makes this clear, and therefore it will not implement any policy change for the working class.
For the BSW, it will be a tightrope act to play the role of fundamental opposition in the federal election campaign and at the same time enter into coalitions with the SPD and/or CDU in the eastern German federal states. As this article is being written, it is not yet clear whether the BSW will participate in governments in the eastern German states. In Brandenburg, everything points to this, while the situation in Saxony and Thuringia is more open. The exploratory talks have demonstrated the tensions between and within all the parties involved – not least within the BSW itself, where there is a struggle over the implementation of the peace policy preconditions demanded by Wagenknecht. The dispute between the Thuringian BSW leader Katja Wolf and the federal leadership of the party around Sahra Wagenknecht has once again revealed the undemocratic character of the BSW. Its Thuringian state association had a mere 81 members. Currently in the BSW new members can only join after being accepted by the national leadership, which has now suddenly accepted twenty additional members in Thuringia to strengthen its position.
The fact that the BSW is not a progressive alternative to the established parties and the AfD was evident not least from the fact that it is joining the chorus of those who blame immigration for terrorism, crime and social problems. In doing so, it is continuing what Wagenknecht has already done in the past: establishing a causal link between these things, reinforcing the division of ordinary people instead of explaining that, firstly, the really serious social ills are quite different and, secondly, that the causes of terrorism and crime must be fought together and that capitalism is the fundamental problem.
Consciousness and the Migration Debate
In recent months what we have been hearing from almost all sides in recent months is a deception manoeuvre. The massively fuelled fears of immigration are intended to distract from the real perpetrators of social ills: pro-capitalist cutback politicians and their friends in the boardrooms of banks and corporations, whom bourgeois politics serve. The only refugees who bear some of the blame for the housing shortage and broken infrastructure and who are responsible for the lack of money for education, health and social services are tax evaders – but not those who have fled war and misery. More deportations will not change the fact that there is a threat of social cuts, a lack of staff everywhere, or that essential infrastructure such as bridges literally are falling down as the Carola Bridge in Dresden did two months ago.
At the same time, it would be wrong to conclude from the majority desire to limit immigration and the election results that society and the working class as a whole are moving to the right. A ZEIT survey, for example, shows that it is more complicated than that: almost half of those surveyed want to limit immigration for fear of growing right-wing radicalism. As recently as the spring, the largest demonstrations in Germany against the AfD in decades took place. However, our warning that these would remain unsuccessful if they were dominated by establishment politicians (who themselves implement racist policies) and did not address the social breeding ground of racism has been confirmed. There is a social polarisation, the left pole of which, tragically, finds no political expression. The waves of strikes in recent years and the new members joining the trade unions are proof of this. When it comes to health, education, jobs, social inequality, etc., there are majorities for left-wing positions.
What’s next?
According to the current state of the opinion polls, it would be clear that the next Chancellor is called Friedrich Merz, the CDU leader, and there is much to suggest that it will come to a former ‘grand coalition’ called government of CDU / CSU and SPD. It is to be assumed that the SPD – as so often in the past – will grasp the ministerial chairs in a ‘spirit of statesmanship’ and will also be able to come to terms with a Chancellor Merz. The FDP and the Left Party fear that they will not be voted back into the next Bundestag, but the BSW cannot be too sure either, as its last opinion polls nationwide were only at six per cent. But today’s polls are not the result of the new elections and a lot can happen in the remaining months before the election. There is no doubt that the AfD could benefit from these developments, not least because the outcome of the elections in the USA has given a tailwind to right-wing populists internationally.
Trade unions
For the trade unions and the Left Party, the new situation is a challenge. The social-democrat-leaning trade union bureaucracy will praise Scholz for sacking the neo-liberal FDP man Lindner and will more or less openly campaign for the SPD. Trade union activists at the grassroots should not go along with this and should criticise this policy.
Above all, the trade unions must now fight to preserve the jobs that are under threat in many companies and prepare resistance against the attacks on the rights and living standards of the working class that can be expected from the next federal government. This means intervening in the election campaign with clear demands and using the politicisation to organise colleagues.
Where local and regional cuts are already being made at the expense of the working class, the trade unions and union activists, as well as those affected and left-wing and social organisations, should take the initiative to resist and form protest alliances, as is currently happening in Dresden, for example, with the participation of Sol members.
Unfortunately, the trade union leaderships do not seem to be doing anything about it. At VW, a willingness to make sacrifices is being signalled and no serious fight is being prepared. In the metalworkers’ collective bargaining round, a bad agreement was agreed to that does not even come close to compensating for the real wage losses of recent years, if it even exceeds inflation during the contract period.
The Left Party
The Left Party is also to blame for the AfD’s rise to power. The party is taking huge steps towards insignificance in its former eastern strongholds, as well as nationally. In Brandenburg, it was even voted out of the state parliament. This is the result of the experience that people have had with the Left Party in governments with the SPD and the Greens: that such governments do not fundamentally differ from other coalitions and, in the worst case, support hospital closures, privatisation, etc.
A break with previous policies and a change of course by the Left Party would be sorely needed for the party to still have a chance of making it clear to the working class that it has value for them. This would mean fighting as a socialist opposition against social injustices in the country and the expected attacks of the next governments, as well as focusing on building extra-parliamentary resistance in the streets, in factories, schools and universities – without hiding anti-racist principles. Unfortunately, there are no signs that this will happen in a comprehensive and consistent manner.
The party conference in October marked neither a critical examination of the causes of the party’s crisis nor a real political reorientation. There was a noticeable amount of talk about the ‘working class’ and the necessity of a ‘class standpoint’. But instead of clarifying what this means in concrete terms for the pressing issues of peace, job cuts, the climate crisis and the Middle East, and how the party should position itself, the resolutions remain formulaic compromises into which the various wings can interpret the perspective that suits them. The election defeats in Brandenburg, Saxony and Thuringia were not mentioned at all in the key motion, and the policy of government participation was not called into question despite the resulting loss of popular support.
But the many new members who have joined recently and the general realisation that something needs to change provide an opportunity to discuss these issues more openly within the Left Party. The fact that some representatives of the party’s right wing are now leaving can only help. Whether this will be enough to make up for the damage done to the party’s perception in the working class is doubtful. But the Left Party can continue to contribute to the formation of a mass socialist workers’ party if it, or at least some of its (sometimes new) activists, are willing to learn from its crisis.
With regard to the upcoming federal elections, activists in trade unions and social movements should speak out in favour of voting for the Left Party, because – despite all its limitations, mistakes and adaptation towards the SPD and the Greens – it is the only voice of a left-wing opposition that can make it into the Bundestag. A Bundestag without the Left Party would shift the political balance of power in the Federal Republic to the disadvantage of the working class. That is why the Sol will also call for and campaign for the election of the Left. We will not refrain from criticising the party’s policies and orientation.
The Left Party’s campaign of doorstep conversations, which began under the motto ‘Everyone talks, we listen’, must now be turned into an election campaign – and the spirit should be: ‘We have answers to the crisis of capitalism!’
The left should conduct a combative election campaign with a focus on a few central issues. These could be:
- Saving jobs at VW and other industrial companies by implementing a socialist plan to convert production to meaningful and sustainable products
- Repairing the ailing health care system and public transport – financed by the profits of banks and corporations and the wealth of the super-rich
- Creating affordable housing
- Opposition to capitalist wars and arms deliveries to Ukraine and Israel
- Measures against the still far too high prices and wages that are too low.
Demands and measures to solve these grievances must go onto the very foundations of the capitalist system, otherwise they will be ineffective: democratic public ownership instead of private ownership of corporations and banks, massive taxation of the outrageously high accumulated private wealth.
An integral part of the election campaign must be an anti-capitalist concept for fighting climate change that does not ask the masses of the population to foot the bill and guarantees all jobs, as well as a message of solidarity with all discriminated minorities – migrants, refugees, LGBTQI* people, disabled people – with women who are also affected by discrimination, with all groups fighting for their legitimate rights.
If the Left Party approaches such an election campaign convincingly, if its candidates follow the example of the new chairpersons Ines Schwerdtner and Jan van Aken and declare that they will only accept the inflated parliamentary allowances that correspond to the average wage of a skilled worker and donate the rest, if the national party finally distances itself from the pro-capitalist government policy carried out in Bremen, Mecklenburg-Western Pomerania, Thuringia and previously in Berlin, then a mobilisation of the party’s members and supporters could be achieved that can carry the party over the five-percent hurdle in the general election.
Along with consistent struggles by the trade unions for the interests of the working population and against cuts at all levels, this would also be the best way to keep the AfD in check.
This would not yet overcome the crisis of the party, but it would initially halt the decline and then a necessary debate could take place on what contribution the Left Party – together with other forces from trade unions and social movements – can make to creating a mass party of workers and youth with a socialist programme, which is so urgently needed to represent the interests of the working class and change society.
Perspectives
The economic development is a recipe for social and political instability. The demands of the VW management, as first published by the IG Metall, to close at least three plants in Germany, cut tens of thousands of jobs and reduce wages by ten percent across the board, are an historic attack. But they are only the spearhead. The industrial capitalists are taking tribute payments from the working class across the board. This class war from above must be met with a corresponding response from below – using all the means available to the trade unions, across companies and industries.
However, it is questionable whether this will happen, as the pro-capitalist leaderships of the trade unions are not prepared to fight consistently beyond the limits of capitalist logic, and the forces within the companies that could enforce such a fight from below are weak. It is therefore possible that we face a difficult situation in terms of collective bargaining disputes and the struggles against job cuts and plant closures in industry. This makes it all the more important for critical and militant colleagues to network and campaign in order to stand up for a militant course in the trade unions and organise colleagues.
However, it is possible that the pressure for resistance will build up more strongly against the upcoming massive budget cuts at the municipal, state and federal levels. The next government, probably led by former Black Rock lobbyist Friedrich Merz, will not give the working class much respite – even if he tries to hide his concrete plans of attack during the election campaign. Already the financial situation of many municipalities is catastrophic as their income falls, with the threat of budget freezes, insolvency and massive austerity programmes. This can trigger resistance, as we are currently seeing in Dresden, where Sol members are playing an important role in the formation of protests. From such movements and in the alliances that arise from them, nationwide resistance to future cuts by a federal government can also emerge.
More class struggle from below will also offer new opportunities for building a workers’ party, which is so urgently needed. The struggle for survival of the left and the rightward development of the BSW make it all the more urgent that trade unionists, leftists (in and outside of the party) and activists from social movements discuss how to create a strong socialist force together in the future. This can only arise out of new struggles by the working class – and despite all the complications, these are constantly drawing closer.
Sascha Staničić and Tom Hoffmann are members of the Sol national leadership.
