Germany's hard-Left 'Corbyn problem' is only just beginning

Germany has a giant "Corbyn problem" of its own. The Social Democrat base has been captured by hard-Left youth activists and has repudiated the core policy positions of the party leadership and Germany’s post-war consensus.

The difference is that the venerable SPD is not in opposition. It is for the time being the second pillar of Angela Merkel’s ruling coalition, with "co-determination" powers over economic policy and the strategic direction of Europe.

The weekend "revolution" of the SPD congress saw vows to reverse the free-market Hartz IV labour reforms of the Gerhard Schroder era and embrace a 2pc wealth tax, doubling down on a tax experiment abandoned in the 1990s as unworkable and economically destructive.

The SPD delegates voted for a rent freeze in the big cities, a stretch in unemployment benefits to 36 months, a 30pc rise in the minimum wage, and a much higher carbon tax.

They want to abandon the "black zero" straightjacket of a balanced budget and launch a fiscal blitz of 1.5 million units of social housing, with €45bn of extra infrastructure and investment spending (1.2pc of GDP) every year for the next decade.

Peter Ramsauer from the Bavarian Social Christians (CSU) called it a “fantasy socialist wishlist” that renders the coalition effectively impossible. “A wealth tax will drive productive capital out of the country. The SPD will ruin itself first, and then the German economy,” he said.

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