The pragmatic and unceremonious former mayor of Hamburg, Olaf Scholz, usually dislikes gestures. However, in the announcement this afternoon (November 24) of a successful three-party coalition deal between his Social Democrats (SPD), Greens and Conservative Liberal Free Democrats (FDP), there were bursts of symbolism confirming that he would replace Angela. Merkel will become German chancellor, most likely in the week of December 6.
The event took place in a converted warehouse in Westhafen, a harbor area in Berlin’s industrial canal network, still marked by cranes and train tracks and now home to a trendy burgeoning art scene. The new government, the message said, is concerned about the future. It is known as the “traffic light” coalition because the colors of the three parties are red, green and yellow. Scholz figured it out too, Noting that an innovative new traffic light was installed in 1924 at Berlin’s Potsdamer Platz; a symbol of innovation and reliability. Then there was the title of the coalition deal itself: “Fear More Progress,” an obvious allusion to the slogan “Fear No More Democracy,” under which SPD Federal Chancellor Willy Brandt ushered in a period of modernization since 1969.
Of course, this was a serious occasion. Scholz and other speakers began their remarks by noting the alarming rise in the number of Covid-19 cases in Germany and pointing out the priority the new government will put in the fight to reduce the number.
Nevertheless, there was still a sense of opportunity in the ads, a sense that something new was coming to Germany. Monday (November 22) marks the 16th anniversary of Merkel’s inauguration as chancellor. As I stated in my recent New statesman cover featureher tenure in power provided stability and maturity, but was also too reactive and too slow to accept change. Many young voters do not remember the times before it. Now she is leaving, and a new government is on the way, bringing together three parties that have never ruled together at the federal level. The joint program they have formulated contains many steps that will move the country forward.
Core commitments rest on key manifesto promises from all three parties. The SPD receives a minimum wage of 12 euros, stable pensions of at least 48% of the average wage, and 400,000 new homes built per year. For the greens, the cessation of coal energy has moved from the current 2038 target to an “ideal” (a qualification that some parties are reining in) 2030, as well as the promise of 80 percent renewable energy by 2030. The FDP gets the introduction of equity pensions, new tax breaks for businesses and the maintenance of a “debt brake” that severely limits deficit spending.
Perhaps the biggest disagreement – between the SPD’s and the Greens’ emphasis on increasing investment and the FDP’s fiscal hawkishness – is being overcome through a combination of open language and clever gimmicks (for example, removing certain green investments from debt brake constraints and increasing the use of off-balance sheet investment bodies to fund public capital costs). This should allow Germany’s budget constraints to loosen slightly when it comes to investments in decarbonization, digital infrastructure and other similar approaches to the future. With regard to fiscal policy in the wider euro area, the coalition agreement is relatively vague, but agrees that doctrinaire rules such as those of the Stability and Growth Pact can be “refined”. That the deal, signed by the flint FDP, includes such open language, puts it at the more positive end of the spectrum of real possibilities.
Another area of potential disagreement is foreign policy. Greens are firmly committed to human rights and democracy, but they also have a pacifist tradition. The SPD has been known to prioritize exports over value in its attitude towards autocratic regimes such as Russia and China. The mainstream FDP is keenly Atlanticist. But compromises were also found here – no doubt helped by Scholz and the Greens’ co-leaders. Annalena Baerbock and Robert Habek is on the Atlanticist wings of his parties. The coalition agreement supports Taiwan’s participation in international organizations – for the first time, Taiwan is even mentioned in a coalition agreement with Germany – and uses harsh language against Russia, demanding an “immediate end” of its interference in Ukraine’s affairs. Under the deal, Germany is seeking observer status in the Treaty on the Prohibition of Nuclear Weapons (which worries some NATO allies), but confirms Germany’s participation in the joint use of nuclear weapons (which reassures them). Taken together, this constitutes a mixed picture for allies, but with more positives than negative ones, both for European partners such as France and alliance partners such as the United States.
Where fiscal and foreign policy involves trade-offs, social policy liberalization is an area of common ground between the three sides of the traffic light. And it shows that this is where the coalition deal is the most daring and transformative. For example, the new government intends to legalize cannabis, lower the age limit to 16, allow doctors to provide information about their abortion services (where they currently cannot), and facilitate the self-identification of transgender people.
The most striking thing is the change in the rules for obtaining citizenship. Until the late 1990s, German descent was still viewed overwhelmingly as a matter of inheritance – whether the person was of German descent or not. This has changed, but gradually. Traffic lights now propose making dual citizenship widely available, expanding integration programs and dramatically reducing the time from arrival to naturalization – in the case of particularly well-integrated migrants – to just three years. Germany’s rapid transformation from a country defined by ethnic identity to a country defined by constitutional identity (that is, one that can be acquired through a commitment to values and institutions rather than family background) is noteworthy and deeply welcome. It also reflects Scholz’s own policy as mayor of Hamburg, where: as I wrote in my recent profile, he successfully combined openness to migration with an emphasis on rapid integration and naturalization.
Although ministerial roles are not formally part of the coalition agreement, today we also learned which parties and which seats have won in the new federal cabinet. Along with the office of the SPD Scholz, it provides security for the ministries of the interior, defense, health, labor, international development and housing. The Greens get a powerful ministry of economy and climate (led by Habek), a ministry of foreign affairs (led by Berbock), and ministries of the environment, family and agriculture. The FDP provides the vital ministry of finance (which will pass to Christian Lindner, the party leader), as well as the ministries of transport, education and justice. How the three camps will interact and collaborate remains to be seen, but they have all declared their commitment to collegiality and collective effort.
Can the government do it? Past performance is certainly not a guideline for future performance, but an independent analysis by the Bertelsmann Foundation showed that both of Germany’s last federal governments had completed about 80% of their coalition deals by the end of their terms.
A coalition of traffic lights comes to power in times of trouble. Covid-19 re-enters central Europe… There are many broader issues: Vladimir Putin’s revisionist Russia, a rocky relationship with China, an uncertain transatlantic relationship, cracks in the EU, a German industrial model in need of renewal amid rapid technological change, demographic decline, and persistent internal social and cultural divisions.
However, if the motley group of figures that can join the Scholz cabinet – spanning three parties and three ideological traditions, from the traditional left to the free market right – together can fulfill something like 80% of the coalition agreement published today, then while ruling in a much touted spirit of modernity and progress, they will put Germany in a much better place to face these challenges. Good luck to them.