Olaf’s last stand?

A weekly newsletter on German politics, with news and analysis on the new government.
By MATTHEW KARNITSCHNIG

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‘I feel so empty, I feel Brandenburg:’ Those lines, from a heart-wrenching ode to the eastern German wasteland that surrounds Berlin, are undoubtedly on the German chancellor’s mind this weekend as he braces for a state election in the rural state of Brandenburg, where the far-right Alternative for Germany (AfD) is projected to win.   
Do or die: If Olaf Scholz’s Social Democrats, who have ruled Brandenburg since German reunification, crash and burn as they did earlier this month in two regional polls, Scholz’s chancellorship will be on life support. As my colleague Gordon Repinski reported Friday, the SPD could pull a Biden on Scholz and sub in Boris Pistorius, the popular defense minister. 
On the other hand, if the result is close — the final poll put the SPD just one percentage point behind the AfD — Scholz could win a reprieve, though probably not for long. 
Brandenburg Concertos: To help you navigate what’s at stake here, we’ve narrowed it down to three scenarios. (Achtung: There are no refunds for this purchase!)
Scenario 1: The SPD gets crushed, the party rank and file revolt and call for Scholz’s head. The ensuing disruption triggers the collapse of the three-party federal coalition, leading to a snap national election. The SPD gets crushed again in that vote, and the center-right Christian Democrats take power in Germany in coalition with the SPD and Greens as their junior partners. 
Likelihood: About as high as the possibility of having a good time in Brandenburg. The SPD, currently polling nationally at 15 percent, or 18 points behind the Christian Dems., knows they’re toast come election day with or without Olaf. So they’re going to cling to power for as long as they can, even if the Free Democrats, the smallest party in the coalition, jump ship. 
Remember: It’s almost impossible to get rid of a chancellor in Germany if he or she refuses to go, as we dissected here. 
Scenario 2: The SPD wins the election by a whisker to maintain its hold on Brandenburg. Pressure on Scholz dissipates, at least for a while. 
Likelihood: About 50-50. With Brandenburg’s SPD governor still pretty popular and the polls within the margin of error, there’s a good chance the SPD will eke this one out. 
Mind you: That’s no thanks to Olaf, who the local SPD hacks have declared persona non grata on the campaign trail even though he lives in the state. That’s why Scholz’s political future will remain bleak even if the SPD wins there. There are simply too many other problems in Germany at the moment that Scholz gets blamed for (see below). 
Scenario 3: The SPD loses by a whisker to the AfD, but manages to hold onto power anyway in coalition with the remaining mainstream parties. Scholz is in the doghouse, but the federal coalition survives because the alternative — an early election — is unappealing for all three governing parties. Besides, they and their staffs need their salaries, so why pull the plug if you don’t have to?
Likelihood: High! 
As Adenauer said: No experiments! That mentality remains prevalent in German society, which prizes stability above all else. 
In other words:  Stick with the devil you know. 
The bottom line: Brandenburg could be a hinge moment but probably won’t be. This time next week, we’ll still have Olaf to kick around. 
Schadenfreude: Ok, we admit to not being immune to the pleasures of this ur-German instinct. When we first coined the “Rustbelt on the Rhine” over a year ago, we were widely mocked by our Teutonic cousins who assured us that a turnaround was near and that our dire diagnosis was little more than hysteric Austro-American envy.   
They’re not laughing now! We won’t bore you with the avalanche of depressing economic data, but suffice to say it ain’t pretty, as we chronicled this week here. 
Chipping out: One of the few bright spots amid the gloom of Germany’s economic outlook was a plan by Intel to invest 30 billion in microchip manufacturing in the eastern state of Saxony Anhalt. To close the deal, Scholz even agreed to chip in about 10 billion euros in subsidies for what promised to be the largest single foreign investment in Germany since the Marshall Plan. 
Does NEVER work? As you probably guessed, Intel pulled out. On Monday, the chipmaker’s CEO said the company, currently facing its own challenges, was putting the project on hold for “approximately two years.” 
Volksversagen: Ground zero of the economic implosion is the auto industry, where the hits just keep on coming. Following the dire news this month on VW, which is reportedly planning to cut thousands of jobs and shutter at least one factory, Mercedes issued its second profit warning in two months on Thursday, citing weak demand in China. The company’s shares have fallen 30 percent since April. Ouch!  
Fact of the week: Tesla’s market value is more than four times that of the entire German auto industry (VW, Porsche, BMW, Mercedes) combined. 
What to do? This being Germany, you stage an Autogipfel, or “auto summit!” Hot on the heels of the successful “migration summit” and our personal favorite — the 2023 Wärmepumpengipfel (heat pump summit) — Vice Chancellor Robert Habeck will convene a gathering of the great and good from Germany’s auto sector to determine a way forward. Stay tuned! 
‘Be Useful!’ For obvious reasons, we at the Bulletin often draw comparisons to Arnold Schwarzenegger, the “Styrian Oak” turned Hollywood superstar. This week the icon and former California governor was in Berlin to receive an honorary doctorate. Vice Chancellor Habeck delivered a laudation, noting that while Schwarzenegger had played “Conan the destroyer” (Note to Habeck’s staffers: He was “Conan the Barbarian!”), in real life he is a person who “stands for decency and compromise.” 
What about Trump?  Schwarzenegger engaged in a long Q&A with the audience and made light of Trump’s recent comments on Haitians in small-town Ohio and cautioned his audience not to get too “wound up” by Trump’s comments. 
 “There was no one eating cats and dogs! But so what? Let him entertain us,” Schwarzenegger said. “Let him go around and give speeches about cats and dogs. Hopefully he’ll join some kind of organization where he protects cats and dogs…Live and let live.”
Conan the Republican: “I’m a Republican. It saddens me when I see the party not operating the same way as the traditional Republican Party operated. It was a party that was inclusive…I will always believe in the Republican principles and do everything in my power to bring the party back again to where it used to be.” Good luck with that.
That’s all for now. See you back here next week!
HATE MAIL: Send complaints (if you must), tips, checks and random thoughts to [email protected]. You’ll also find me on X @mkarnitschnig.
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