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German Chancellor Olaf Scholz attends a news conference in the Federal Chancellery following the video conference with the country's 16 state leaders on the surge in the coronavirus disease (COVID-19) cases, in Berlin, Germany, December 9, 2021.
Enter Olaf — can he keep Germany’s traffic light blinking?
As of this week, for the first time since Gwen Stefani was topping the charts with Hollaback Girl, Germany is not run by a person named Angela.
Olaf Scholz — the pragmatic, robotic, determined leader of the center-left SPD party — now holds the reins of Europe’s largest economy.
But he also leads a three-party coalition, the first in Germany’s modern history, with the progressively, climate conscious Greens and the business-friendly fiscal hawks of the Free Democrats party. The coalition is known as the “traffic light” owing to the colors of its three members.
Here are a few immediate and longer-term challenges for Scholz.
His first big test is COVID. Germany is currently in the throes of its worst surge since the onset of the pandemic. Between the upcoming Christmas holiday and uncertainty about the omicron variant, Scholz has his work cut out for him. So far he has not announced any new society-wide lockdowns or restrictions. But with Germany’s vaccination rate of 70 percent now an EU laggard, he’s embraced a broad vaccine mandate and wants to get 30 million jabs done by the end of the year.
Foreign policy: Russia on day one. Scholz comes into office right as tensions around Ukraine are soaring again. He will quickly have to stake out a position towards Moscow that satisfies German industries, which rely on Russian markets and energy, but that also reflects the views of the Greens, Russia hawks who see the Kremlin as a menace both to the climate and to democracy. With the Greens’ leader Annalena Baerbock as foreign minister, this is going to be a tough balance to strike.
A crucial near-term decision for Scholz is whether he is willing to include suspension of the Nord Stream 2 Russian gas pipeline project as part of a package of German sanctions meant to deter Russian aggression against Ukraine… at a time of sky-high gas prices.
Going green without getting into the red. Scholz’s government has pledged a massive push on the climate front, promising to phase out coal entirely by 2030, eight years earlier than originally planned, and to double the renewable share of electricity generation to 80 percent by then as well.
These goals are practically existential for the Greens, but getting there will require massive investment — where’s the money going to come from? Scholz has already pledged to reimpose constitutional limits on debt, and the Free Democrats, who control his finance ministry, are opposed to raising taxes.
A bigger question: Can Scholz make social democrats cool again? The SDP victory was something of a stunner for a party that had seemed, just months ago, like it was on the brink of extinction. What’s more, across Europe traditional labor-oriented parties have suffered in recent years.
Now Scholz has a chance to prove that the traditional European center left has some fight in it, at a time when the right — in both its centrist and populist versions — has been defining the landscape for the last decade. Scholz believes the SPD can reconnect with working-class voters — and his coalition’s pledge to raise Germany’s minimum wage for about 10 million people is an immediate part of that.
About a third of EU member states are currently run by social democrats of one stripe or another. They will be watching to see if Scholz can use the bloc’s largest economy as a showcase for the center-left’s bonafides after a long time in the wilderness.
The unknown unknown: the next crisis. Will it be immigration? A terror attack? A financial meltdown? A political scandal? Scholz’s predecessor didn’t come into office as a crisis manager, but she sure left as one. How the new German chancellor holds together his somewhat oddball coalition under unforeseen pressures could prove decisive.
German election outcome begins new era of three-party cooperation
Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective from Europe:
What about the outcome of the German election?
Well, as expected, the Social Democrats under Olaf Scholz came out on top. They had a very credible campaign, presenting him primarily not as a Social Democrat, but as a possible successor to Angela Merkel. Then, It's going to take quite some time to form a new government and the exact outcome of that, not entirely certain.
Is this the beginning of a new era in the politics of Germany?
It certainly is. First, of course, Angela Merkel will step down whenever a new government comes into being. After 16 years, is a long period. She's been around more or less forever in the politics of Europe. And then also because of the fact that it will be necessary to have a government of three parties. That hasn't happened for very long time in Germany. And the key will be to bridge the difference between the Greens with their agenda, and the Liberals with a more liberal economic agenda. And how the two of them will come together will be key. Then I think the Social Democrats or possible the Christian Democrats will have to adjust to the agenda decided effectively by the Greens and the Liberals.
Germany’s frenemy kingmakers
The German people have spoken. For the first time in over 70 years, the country's next government is all but assured to be a three-way coalition.
That coalition will probably be led by the center-left SPD, the most voted party, with the Greens and the pro-business FDP as junior partners. Less likely but still possible is a similar combination headed by the conservative CDU/CSU, which got its worst result ever. A grand coalition of the SPD and the CDU/CSU — the two parties that have dominated German federal politics since World War II — is only a fallback option if talks fail badly.
Both the Greens and especially the FDP have been in coalition governments before. But this time it's different because together they have the upper hand in negotiations with the big parties wooing them.
The problem is that the two smaller parties agree on little beyond legalizing weed, and even when they do, diverge on how to reach common goals. So, where does each stand on what separates them?
Climate. The Greens, obviously, believe Germany needs to do a lot more to fight climate change, the most important issue for voters in this election. They want to phase out coal by 2030; for Germany to become carbon-neutral in 20 years; be able to veto laws that contradict the Paris Climate Accord; and invest 100 billion euros ($117 billion) in railways to get rid of most short-haul flights.
The Free Democrats, for their part, aim to tackle the climate crisis but without breaking the bank, prefer private to public spending, and mostly reject more business regulation. Instead, they prefer to decarbonize the German economy through more emissions trading, so companies that pollute less earn more, and pollution becomes very expensive for the rest.
Taxes. The Greens want to cut taxes for low earners, raise them for high earners, and have long pushed for a wealth tax on the richest Germans. The FDP, traditionally opposed to any tax hikes for any reason, softened its position during the election campaign, and now supports some tax relief for poor Germans as well as taxing rich Germans a bit more. But a wealth tax is a non-starter.
Debt. The Greens want to remove or revise Germany's so-called "debt brake" that caps annual public borrowing at 0.35 percent of GDP, enshrined in the constitution since 2009. The limit was suspended in 2020 for three years to allow the government to borrow more to spend on pandemic stimulus, but the Greens say it should be relaxed further to invest more in the country's future.
The FDP, meanwhile, will never agree to take the provision out of the constitution — which Scholz is also against — to protect future generations against profligate public spending and being saddled with repayments they can't afford. This time, however, the fiscal hawks seem willing to be a bit more flexible to boost investment in climate and digitalization.
European economic integration. The EU also suspended its fiscal rules — preventing member states from ever owing more than 60 percent of of their GDP — last year to allow member states to borrow more to deal with COVID, and approved a 750 billion euro COVID relief fund with everyone on the hook. The Greens want to keep it that way even in post-pandemic times because if all countries share the risk, more money will be available to all. Moreover, they believe low-debt Germany should give highly indebted countries like Italy or Spain more wiggle room to repay all the debt they took on because the pandemic hit them harder than the rest.
No way, say the Free Democrats, who like "frugal" EU countries such as the Netherlands insist the pandemic-era fiscal limits must be repealed ASAP: responsible Germans are tired of subsidizing nations that always borrow more than they should.
One thing that the Greens and the FDP do have in common, though, is their popularity among the German youth, with both parties leading among voters under 30. And that, coupled with the declining influence of the CDU/CSU and the SPD, means that the center of political gravity has shifted — five to six so-called "people's parties" and three-way coalitions are here to stay.- Europe after Merkel resigns - GZERO Media ›
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Russia will withdraw forces from Ukraine but Putin reveals nothing
Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective on Europe In 60 Seconds:
What are the Russians up to against Ukraine?
We simply don't know, except the fact that they're concentrating a huge amount of military forces. And you don't do that for nothing or for fun. They are there for a purpose, to have pressure or to undertake limited to larger operations. We simply don't know. And when Putin delivered his State of the Union speech the other day, he didn't say a thing about this. They are now talking about withdrawing the forces. But let's wait and see. They have talked about withdrawing forces from Syria for a long time, but we haven't seen that as of yet.
What's happening in the politics of Germany?
Well, in the politics of Germany, you have drama. You had the drama inside the CDU/CSU coalition on nominating a candidate for the chancellorship. They managed to sort that out with taking the candidate who is the least popular, according to public opinion. And then the Greens, of course, launched their candidate, a 40-year-old lady, no prior experience. But she's well in the opinion polls at the moment. So stay tuned. The politics of Germany is going to be interesting and important. We are talking about the third largest industrial economy of the world.
Is it the Greens' moment in Europe?
Europe has been hit by a green wave in recent years. Green parties in countries as varied as Germany, Belgium, France, Ireland, Finland, and Sweden have made sizable electoral gains, with some now sitting in national governments.
The Green phenomenon seems to be gaining yet more momentum in the lead up to some crucial European elections (Germany, France) in the months ahead. What explains the green shift, and where might this trend be headed?
Collapse of the mainstream center-left. Mainstream center-left parties in places like the Netherlands and Italy, as well as the Labour Party in the UK, have imploded in recent years, hemorrhaging popular support as a result. But while these parties have collapsed, demand for left-of-center policies remains high. This is precisely what has taken place in France, where the once-dominant Socialist Party is now on the fringe of French politics — a vacuum that has been filled by France's Green Party. Polls suggest that the environment is the second-most important issue for French voters, behind unemployment, a shift reflected in the fact that France's three biggest cities — Paris, Lyon, and Marseilles — all have left-leaning mayors (Lyon and Marseilles are run by the Greens.)
But French voters are not just looking for politicians that pay lip service to leftist causes like the environment, they are seeking authentic center-left leadership. President Emmanuel Macron — whose LREM party exploited disillusionment with France's traditionally dominant center-left in 2017 and campaigned on a pledge to "make our planet great again" — has failed to resonate with left-wing voters that see him as a non-committal ideological chameleon who has watered down a once-ambitious climate agenda. The Greens have filled this void, making massive gains in municipal elections last year that forced a flailing Macron to introduce a wide-ranging climate bill. (Still, critics say the bill doesn't go far enough.)
Exerting outsized political influence. In some countries, Green parties have evolved from single-issue environmental protest groups into center-left blocs championing a range of issues. As a result, they have made inroads at the national level to significantly impact policy. In the Republic of Ireland, for instance, Fine Gael and Fianna Fáil, establishment parties, needed the support of the Green Party, which has just 4,000 registered members, to form a viable coalition government after the last election. The Greens agreed on the condition that the government commit to reduce carbon emissions by 7 percent annually. Since then, they have also helped pass a bill to put Ireland's net zero emissions goal into law. Those are big achievements for a party that holds just 12 seats in a governing coalition made up of 84 parliamentary seats in the lower house.
"Not the Greens of the Cold War" era. In some political contexts, the Greens have adopted a pragmatic approach to a political landscape that has undergone seismic shifts in recent years. Against the backdrop of a right-wing populist wave in Germany, as well as an economic model that is somewhat outdated in the age of a dominant China and worsening climate crisis, the German Green Party has tried to position itself as an authentic center-left party for the masses.
Under the joint leadership of Robert Habeck and Annalena Baerbock, who this week was tapped as the party's candidate to replace Angela Merkel as chancellor, the Greens have taken advantage of Merkel's conservative coalition's struggles to push a moderate foreign-policy agenda. The party has advocated for getting tougher on China and is also a proponent of NATO and boosting ties with Washington. Importantly, the Greens say that Germany needs to better address climate change without alienating the corporate sector and working-class people.
The Greens are now leading in the polls and have a solid chance to form the next government after Germans vote in federal elections this fall. Their success is drawing praise even from rivals. Norbert Röttgen of Merkel's CDU party, for example, recently said that "however embarrassing for me, the Greens have the clearest stance of all the parties on China and Russia."
Looking ahead. The green wave in Europe does not appear to be a fad. In many countries, people are desperate for change, and the Greens seem to be meeting the moment while other (traditional) political parties flounder.