NewsAngela MERKEL

After 70 days of discussions and the participation of 22 working groups, the coalition parties – Social Democrats, Greens and Liberals – have reached a common agreement on the work programme for the next 4 years. The parties of the ‘Tricolour’ coalition – the first tripartite coalition at federal level – presented their 177-page draft coalition contract on 24 November.

A more social and progressive government

With the departure of the Christian-Democrat Chancellor Angela MERKEL, who will have remained at the helm of Germany for 4 mandates, i.e. 16 years, the government is taking a left turn with a future Social Democrat Chancellor, Olaf SCHOLZ. Indeed, the project of the future government is based on profoundly social and progressive measures.

Promoting equality and diversity.

The coalition expressed the wish to strengthen the legislative arsenal to fight against sexism and discrimination, to promote equal pay, to anchor children’s rights in the constitution or to establish women’s right to self-determination by introducing a right to abortion, which is currently illegal although tolerated.

Ensuring a decent standard of living.

To address inflation and soaring energy prices, the parties also plan to increase the gross minimum wage by €2.40 to €12 per hour. Aware of the growing tensions in the housing market and rising housing prices in major cities, the new coalition is committed to making housing affordable and climate neutral. To achieve these goals, 400,000 new homes will be built, a quarter of which will be social housing subsidised by the government. At the same time, an extension of the rent control to 11% over three years – compared to 15% currently on the market – will be implemented.

Climate neutrality as a cross-cutting objective

Although the climate issue was the main point of contention during the negotiations, the Greens were partially successful in making climate neutrality the common thread running through all policies. In concrete terms, this will mean that future legislation will be monitored for its compatibility with climate objectives and for its environmental impact.

In addition, ambitious targets have been set : Germany will have to achieve an 80% share of renewables in final electricity consumption by 2030 and will try to achieve an earlier phase-out of coal, “ideally” by 2030, than the 2038 deadline set by law.

Germany remains the car nation

Unsurprisingly, the mobilization of the industrial lobbies in the run-up to the elections bore fruit and the roadmap of the future government provides for some important concessions to the automotive industry. For example, the coalition contract mentions the maintenance of thermal vehicles running on synthetic fuels beyond 2035, a measure that the Social Democrats also aim to support on a European scale. Similarly, there is no provision for an early end to conventional combustion engine vehicles, which will no longer be allowed to be registered after 2035, in line with the European objectives of the climate package (Fit-for-55).

The purchase premium for electric cars is to be reformed before being completely abolished in 2025. The SPD, FDP and Greens are thus following a demand from the car manufacturer Volkswagen.

In addition, the future coalition is banking heavily on electromobility and has set a target of 15 million fully electric vehicles by 2030. With a current fleet of 48 million vehicles, this would amount to one in three cars. The future coalition is focusing on the development of charging infrastructure as a prerequisite for the smooth development of electromobility.

True to its ambition to be number one in all sectors, Germany wants to maintain its position as an economic powerhouse by combining environmental efforts with competitiveness. To do this, it is banking on innovation, start-ups and SMEs. The country aspires to become a pioneer in the manufacturing and recycling of batteries, while the growing demand for batteries and semiconductors currently faces shortages and reveals a dependence on third countries, generating tensions in the European electromobility market. Similarly, Germany reiterated its goal of becoming a world leader in hydrogen technologies.

Involvement of the elections on the international scene

In his speech at the press conference, Olaf SCHOLZ (SPD) announced the credo on which German foreign policy will be based.

The future chancellor mentioned first and foremost relations with France. The new coalition will support several initiatives initiated by French President Emmanuel MACRON, such as transnational electoral lists for the European Parliament, which are intended to democratize the EU, the desire to strengthen the EU’s position on the international scene and the implementation of a carbon adjustment mechanism at the borders to avoid “carbon leakage” and maintain the competitiveness of European companies. The French Secretary of State for European Affairs, Clément BEAUNE, welcomed these statements.

If Germany’s foreign policy is based on relations with the United States, the appointment of the Green leader, Annalena BAERBOCK, as Federal Minister for Foreign Affairs, is hardly favorable to China and Russia, towards which she wishes to adopt a harder line.

Next steps

The parties have now submitted the proposed roadmap to their members and are planning the election of Olaf SCHOLZ on St Nicholas Day. The future chancellor, with his experience as mayor of the city-state of Hamburg, is paradoxically the candidate most likely to continue MERKEL’s social policy.

They also must formalize the official appointment of ministers. The Social Democrats, the big winners of the elections, inherit six ministries in addition to the Chancellery (Interior, Labor, Defense, Health, Development and a new Ministry of Construction). The Greens inherit five portfolios (Foreign Affairs, Agriculture, Climate and Economy, Environment and Family). Finally, the Liberals inherit the important portfolio of Finance, until now held by Olaf SCHOLZ, which will be taken over by their leader, Christian LINDNER, but also Justice, Education and Research and the Ministry of Transport and Digitalization.

Contact

Louise MAIZIERES

Louise MAIZIERES

Consultant Berlin
Degree in Political Science and European Law, in charge of the EU/Germany coordination

lmaizieres@arcturus-group.comLinkedin