A Challenging Start for the New German Federal Government
The new German government will not have the usual 100-day grace period. Because of the coronavirus, climate and international crises, it will have no time to settle in. What can be expected from the new government?
By Kirstin Karotki
Internationally, there will certainly be continuity. The friendly handover of official business between the two top politicians, Angela Merkel and Olaf Scholz, began after the election in September, while the Social Democrats (SPD), Environmentalist Greens (Bündnis 90/Die Grünen) and Pro-market Free Democrats (FDP) formed a new government and before Olaf Scholz was sworn in as the new Chancellor on December 8. In doing so, Merkel and Scholz sent a clear signal and an intended message, both domestically and to Germany’s international allies: cohesion, continuity and reliability.
The handover from Angela Merkel to Olaf Scholz and the coalition negotiations between the three different governing parties were harmonious, but significant challenges await the new government.
The two smaller parties, the Greens and the Pro-market Free Democrats, are furthest apart in basic political policies and how they view society. The Greens see the state as an active player, while the FDP sees the initiative for action lying more with the private sector. This is clearly illustrated in climate policy. Even though both parties favor more climate protection, their paths are fundamentally different, with narrow areas for compromise. The Greens want climate protections based on policies and regulations. The FDP is backing innovation and industry initiatives. In any event, climate will be a major policy area in a country that has historically been oriented towards high levels of economic performance.
German G7 presidency against the background of geopolitical tensions
On January 1, Germany took over the presidency of the Group of Seven (G7) from the United Kingdom. Although it may seem routine, everything is different: after 16 years of Angela Merkel as Chancellor (in the same time, there have been four U.S. presidents and nine presidents in Italy), Chancellor Olaf Scholz will now lead Germany’s G7 agenda. As a former finance minister in Merkel’s cabinet, the new chancellor has a great deal of experience with the G7 and the G20. Nevertheless, the new German government does not have much time to prepare and the international environment is difficult.
The German presidency’s program will not be published until later in January, but the priorities have been broadly defined: global health, climate, digitization, trade and supply chain security, human rights and strengthening democracy worldwide. The pandemic and its economic consequences will be a central topic, as it was under the UK presidency.
Disruptions in global supply chains have had a major impact on production in Germany, which is traditionally a large exporter. As a result, there are political discussions at both the German and EU level about building greater resilience to supply disruptions by bolstering domestic capacities. The German government will push for this, especially in the health sector.
In geopolitics, Germany will have to develop a consensus within the coalition on its relationship with Russia against the backdrop of political tensions created by recent military movements on the Ukrainian border and Germany’s role and position on the Nord Stream 2 gas pipeline. And there is a difference of views: the new Green foreign minister, Annalena Baerbock, is on record saying the commissioning of the Nord Stream 2 pipeline should not be approved, while Chancellor Olaf Scholz stressed it is a private sector project that should not be burdened with political efforts to deescalate the situation on the Russian-Ukrainian border. Behind these opposing positions lie a years-long disagreement between the Social Democrats and the Greens. Olaf Scholz was the SPD secretary-general under former Chancellor Gerhard Schröder, who originated the Nord Stream 2 project and he has always been a supporter of the pipeline. The Greens want a foundation of a values-based foreign policy. That includes Germany’s relations with Russia and China.
Currently, there are indications that the SPD under Chancellor Olaf Scholz’s leadership will prevail and German foreign policy will be set by the Chancellor’s Office, not the Foreign Office. Germany’s ambitions at the start of its G7 presidency are high: “We will use our presidency to make this group of countries a pioneer. We will use our presidency to make this group of countries a pioneer for climate-neutral business and a just world,” said Chancellor Scholz.
Differences in climate, energy and economic policy
Climate policy is another potential breaking point for the coalition. At the end of 2021, the EU Commission brought the new federal government into realpolitik. According to a draft of the EU Commission, nuclear and gas-fired power plants are to receive a green sustainability seal under certain conditions because of their low CO2 emissions, thus mobilizing investor funds in the billions.
The German government disagreed and “expressly rejects” the assessments. Nevertheless, it illustrates a dilemma for the new three-party coalition. There are different policy approaches by the Liberals, under Federal Finance Minister and FDP party leader Christian Lindner, and the Greens, under Vice Chancellor and Federal Minister for Economic Affairs and Climate Protection Robert Habeck. There is agreement between the SPD, the Greens and the FDP that nuclear power does not “deserve” the EU’s sustainability label, despite its comparatively low CO2 emissions.
However, positions differ on the assessment of natural gas. The Greens support an eco-label for gas-fired power plants, while the SPD and FDP are in agreement with it as a bridging technology.
In mid-January, the EU Commission will present its final version, which is likely to impact the coalition’s climate policy.
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Article edited by Jim Meszaros and Esme Stribling-Hough.
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