While the government parties had blamed the lingering burden of unification and the global economic crisis for the bulk of Germany's troubles in the 2002 election campaign, the topic of gridlock and policy reform is re-entering the agenda of German politics. From a scientific view, the analysis of Schröder's potential for policy change imposes some challenges. Germany needs reforms in many policy areas, in particular in the economic and societal domains. We present a new method to measure the positions of political parties on many issues. To identify the structural causes for German gridlock we apply the spatial model for legislative choice, which uncovers the room for manoeuvre. More precisely, we intend to show how much potential for policy change the Schröder government will have in economic, societal and foreign policy, and which policy position will be promoted by the Red–Green coalition in these areas.