How the German election result puts a big smile on the European face

For a while it seemed like the European Union would treat Germany completely differently. In the spring, the Green Party leads in opinion polls. Of course they should form a coalition, but nevertheless: under Chancellor Annalina Barbock, Germany will be different, less economical, more ambitious in its climate policy, and tougher in Hungary, Poland, China, Russia and other violators of basic rights.

It turned out differently. Social Democrat Olaf Schulz won the election because he presented himself as Angela Merkel’s best reincarnation: capable, reliable, averse to experimentation. Now he faces the difficult task of putting together a government of two very different parties: the social, interventionist Green Party, and the free-market-oriented Free Democratic Party. Europe should not expect so horrific changes from the compromise-based “traffic light alliance”. The same is true of a potential alternative, the “Jamaica coalition” made up of CDU, Greens and FDP.

budget policy

Targeted coalition partners are in conflict with European fiscal policy. During the Corona crisis, European financial rules – a maximum of 3% deficit and 60% government debt – were temporarily suspended. FDP leader Christian Lindner, who aspires to become finance minister, believes they should be brought back as soon as possible. The Greens want to relax the rules to allow green investments in Europe. Schulz is in the middle: like Lindner, he wants to go back to the rules, but not too soon, for fear that the European economy will collapse again.

By the way, the discussion about budgetary rules is taking place less intensely than in the past. Recently, eight financial “hawks” in the EU – including the Netherlands, Austria, Finland and Sweden – have expressed openness to the flexible application of the rules. They also see that countries such as Greece (209 percent of public debt), Italy (160 percent) and Portugal (127 percent) can only get rid of their debt quickly through strict austerity measures that harm their economies. European finance ministers recently discussed creative solutions. For example, green investments cannot be counted towards the national debt. Either way, if Christian Lindner becomes Treasury Secretary, the hawks have an important ally.

climate

All parties support an ambitious climate policy and the European Green Deal. However, the question is: How should Germany be climate neutral by 2050? The Greens want to shut down coal-fired power plants by 2030 and ban the combustion engine car. The FDP does not want to know anything about coercive measures. She believes that global warming can be combated through technological innovations and the free market, for example by increasing the cost of carbon dioxide emissions. “A deep social injustice,” said Green Party leader Annalina Barbock. “You can’t regulate the climate through the market, because the market doesn’t care about people.” In the Greens, European Commissioner Frans Timmermans and other Green Deal proponents have at least one ally in the German government.

Foreign Policy

In recent years, Germany has often been seen as an obstacle to the European desire to develop into a geopolitical player. Merkel has been accused of being guided above all by the interests of the German economy, in particular the interests of the powerful German auto industry. Trade was more important than geography.

The SPD, the Greens and the Free Democratic Party support a more active foreign policy. The Social Democrats want Germany to become a leader in preventing international crises, and even the FDP sees the need for a European army. These ideas are still far from concrete implementation.

In recent years, the Green Party has adopted a tougher stance toward the authoritarian regimes in Hungary, Poland, China and Russia. They are partially supported in this by the FDP. Although the liberals defend the interests of the German business community, they believe that Merkel has allowed herself to be bullied by dictators, especially by China. The leader of the Free Democratic Party, Lindner, said that this violates human rights and international law and destroys the market at dumping prices. “Velvet gloves have to pay off. We cannot continue in such a country as before,” Lindner said. The new German government is likely to defend democracy and human rights more forcefully than its predecessor.

It is not immediately expected to expect big plans from Berlin, but this has not happened in recent years either. France launched the ambitious ideas, while Germany arranged the settlement in Brussels. This is perhaps where the greatest danger to the European Union lies. Not only does the new chancellor have less experience than Merkel, but the new German political reality, he also has to take into account the “red lines” of his coalition partners. Not only will Schulz, or perhaps Laschet, have to make concessions in Brussels, but will also have to cover them in Berlin.