Steinbrück continues pursuit of Merkel despite his SPD trailing far behind ruling CDU

Last night, audiences at Hamburg's Thalia theatre watched Moby-Dick, the tale of a bullish sea captain's tragic hunt for an elusive and enigmatic whale. Hours earlier it was the turn of Peer Steinbrück to take to the stage in his pursuit of the elusive and enigmatic German chancellor Angela Merkel.

With just two weeks to German election day, Mr Steinbrück's opposition Social Democratic Party (SPD) is trailing Dr Merkel's Christian Democrats (CDU) by 15 points.

Instead of giving up, the economics graduate, former state premier and finance minister kept a capacity audience of 1,000 entertained with political arguments and anecdotes. Perhaps it was the home crowd that did it – he was born here in 1947 – but, for what seemed like the first time in his campaign, the real Peer Steinbrück shone through. With quick wit and sardonic north German humour, he is considered one of the best politicians of his generation.

Prickly profile
Former chancellor Helmut Schmidt was an early backer of his run for the chancellery, saying Mr Steinbrück "had what it takes". But his SPD campaign handlers, aware that Mr Steinbrück's tongue can be a political liability as well as an asset, have softened his prickly profile into an inoffensive haze.

Then his party handed Mr Steinbrück, an SPD centrist and backer of decade-old Gerhard Schröder reforms, a social justice manifesto with classic fiscal redistribution policies.

The SPD’s pitch includes increasing the top tax rate from 42 to 49 per cent, using the money to invest in education and infrastructure. The party also argues a minimum wage of €8.50 is essential to end the low-wage economy and ensure full-time workers earn a living wage.

Mr Steinbrück has stuck to the programme but has been unable to corner Dr Merkel or even force her into making a move. Quite the opposite: Dr Merkel’s CDU has given the impression of lifting SPD ideas wholesale – from minimum wage to so-called rent brakes.

Unlike Dr Merkel, the SPD man is not keeping his post-election options open. He says he has “no problem” admitting he worked well with Dr Merkel in her third term, but says he is not interested in a revival of that alliance. Nor does he want a three-way coalition with the hard-left Linke if he lacks a majority for his preferred two-way alliance with the Greens.

The SPD's greatest dilemma is explaining why it backed all Bundestag bailout votes on Dr Merkel's austerity-first policies which, Mr Steinbrück now says, have left crisis economies "clinging to the infirmary or in danger of checking out entirely". The alternative SPD proposal is for targeted economic investment of European Commission funds and the proceeds of a financial transaction tax.

Most controversially for German voters is an SPD proposal to pool sovereign borrowing at EU level and thus reduce financing costs across the board. Yesterday Mr Steinbrück was cautious about even discussing it.

“No one is saying we should give them all a German credit card but we have to be careful not to discredit the idea so much that it is unusable.”

Afterwards, he said it was difficult to debate the euro crisis with an opponent who was “performing a dance of the seven veils with voters” over the reality of mutual financial liability in the post-crisis EU.

“We have to hold this Europe together and make clear it is about more than economics. We are living in a privileged, exceptional situation in European history and, for this situation, we Germans will have to pay. The debate is merely about how much and for what.”