Sunday, August 7

German ‘traffic light’ coalition partners bid for finance ministry

Correspondent in Berlin



The multifaceted picture of conflicts to be resolved by negotiation ‘traffic lights‘, which starts today Thursday in Berlin and whose objective is to achieve a coalition of government between social democrats (SPD), The Greens and the liberals of the FDP, crystallizes in the struggle to obtain the Ministry of Finance, the vault key to the text of the agreement and which, in what affects us most directly, will define the new balance of power within the European Ecofin.

The liberal leader, Christian Lindner, aspires to the position. Lindner, as can be seen in his message of mourning for the resignation of Jens Weidmann in front of the Bundesbank, is in favor of fiscal and monetary stability. He stands on the side of austerity and has declared himself in favor of a “continuity” appointment.

But his aspiration to the position runs up against the intention of Los Verdes to take over that department and there is specifically a senior official in the party, the co-president Robert Habeck, who aspires to the chair. While Lindner would even tighten fiscal discipline over Merkel’s last finance minister, Olaf Scholz, winner of the elections on September 26 and with great probability the next chancellor of Germany, Habeck’s landing in the historic building on Wilhelmstrasse would mean a serious shift towards a more flexible fiscal line. This great point of friction on the table will provide a definitive clue, once the agreement is closed, of who has taken the lead in the negotiations that are about to begin.

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The negotiators they have a lot of fabric to cut. Almost a month after the elections, the three parties have reached a starting point role on which to begin to design the coalition program, for which a total of 22 working groups with specialist politicians will debate the details of a agreement in the next few weeks. In addition to the differences in fiscal and financial policy, as well as in the right path towards climate protection, they will have to balance the complicated financial viability of their projects, since they have ruled out increases in taxes.

The Social Democratic candidate for the German Chancellery, Olaf Scholz, talks with the current Chancellor, Angela Merkel, and the Minister of the Interior, Horst Seehofer
The Social Democratic candidate for the German Chancellery, Olaf Scholz, talks with the current Chancellor, Angela Merkel, and the Minister of the Interior, Horst Seehofer – Reuters

It is assumed that the minimum salary legal will increase to twelve euros per hour and that the social aid system called Hartz IV will be replaced by a more universal and less bureaucratic citizen benefit, of which the details are unknown for now. Some points already agreed with that the minimum age to vote in the Bundestag and the European Parliament will be reduced to 16 years and that each year the construction of 400,000 new houses will be projected. There should be, along with all of the above, neither cuts in pensions nor increases in the retirement age. There will be no speed limit on the highways.

The imminent partners they want to invest in climate protection, digitization and education. An additional € 50 billion a year is being discussed. At the same time, they don’t want to raise taxes and promise to respect the debt brake. Since simply relying on additional tax revenue will not suffice, public investment firms and federal firms could borrow from the markets of the United States. debt, externally to the general budgets of the State. In addition, they propose to review the unnecessary and harmful subsidies for the climate. The details at this point are likely to become terribly controversial during the negotiation.

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Ecological transition

The expansion of renewable energy it will accelerate “drastically”, the SPD, the Greens and the FDP agree on this. They have already agreed to a sunroof requirement for new commercial buildings and an accelerated phase-out of carbon, which “ideally” should arrive in 2030. Here they are already receiving criticism from various directions.

For the Green Youth and the protectors of the climate, the proposals do not go far enough, while the president of the Federation of German trade unions DGB, Reiner Hoffmann, points out that faster carbon removal would only be possible under certain conditions. “If a future ‘traffic light’ coalition wants to advance in this direction, the pace of the energy transition must be massively increased and it must propose solutions for the relocation of jobs and added value in the districts,” he demanded.

The co-president of Los Verdes, Annalena Baerbock, has described in rather cryptic terms the strategy that the negotiators will follow, noting that they have agreed, first, to strengthen the “substantive security fences”, and only then to clarify departmental issues. He insists on the need for the three parties to obtain “equitable representation in government.”

There is also extreme vagueness in some areas of the pre-agreement document, such as transportation, foreign policy, and security. The director of the Institute of German Economics, Michael Hüther, sees an immense need to act on social security. “That is a central issue and, unfortunately, it is also the greatest disappointment of exploratory work,” he has complained of the lack of attention to demographic aging, “we will have to register a loss of more than three million people in the workforce in the next decade, until 2030, and this leads to completely different budget burdens that no one seems to want to deal with. ‘

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