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‘Traffic light’ coalition | Socialists, liberals and Greens — all together

Two months after the federal elections of September 26, Germany finally has clarity on the composition the new government. For the first time, a disparate trio — the centre-left Social Democratic Party (SPD), the Greens, and the neo-liberal Free Democratic Party (FDP) — have sealed a coalition agreement. Dubbed the ‘traffic light coalition’ on the basis of the party colours (the SPD’s red, the yellow of the FDP, and the Greens), the new dispensation will see the SPD’s Olaf Scholz — Finance Minister in the outgoing Cabinet — succeed Angela Merkel as Germany’s new Chancellor.

The three parties are not natural allies. Until the election results came out, it was believed that the SPD’s preferred partners would be the Greens and the communist Die Linke (The Left), as all of them are left-leaning in varying degrees. But the Left posted its worst performance ever, winning just 39 seats. The SPD emerged as the largest party with 206 seats, just ahead of the 197 secured by the centre-right Christian Democratic Union’s (CDU), while the Greens came third with 118 seats. The FDP and the far-right Alternative for Germany (AfD) finished with 92 and 83 seats, respectively.

In the 736-seat Bundestag, 369 seats are needed for a majority. The SPD and the Greens together had 324, and were 35 short. Had the Left even matched its performance in the last elections (69 seats), they might have been in the government. But their dismal show meant the SPD — which was not interested in another ‘grand coalition’ with the CDU — had no option but to get in bed with the business-friendly Free Democrats, and convince the Greens to do so as well.

Starting from October 21, 300 negotiators from the three parties, split into 22 working groups, got down to work behind closed doors hammering out policy positions. After five weeks of intense negotiations, on November 24, the freshly minted allies announced at a joint press conference in Berlin that a deal has been finalised. The coalition agreement, which runs into 177 pages, outlines a common minimum programme and indicates how the ministries will be divided. All three parties have to get the pact internally ratified before government formation, which is expected to happen in the second week of December.

The main thrust of the coalition agreement is climate protection, with a pronounced focus on making German industry climate-neutral and on digitalisation, and fiscal discipline. The agreement, however, is widely perceived as less of an actual manual of governance and more a marketing brochure that would help sell the ideologically discordant alliance to the rank and file of the respective parties. Therefore, the deal, erected on hard compromises, offers each party something concrete to take back to their core constituency.

The SPD has managed to get two of its campaign promises — raising the minimum wage to €12 and build 400,000 houses to resolve a housing crisis — into the coalition agreement. While these measures would be anathema to the laissez faire FDP, it has, in turn, had its say on the taxation front, forcing the SPD to drop the idea of a wealth tax, and agree that there would be neither an increase in tax rates nor a relaxation of the curbs on borrowing. The Greens, on the other hand, have gained a policy commitment that by 2030 (brought forward from 2038), Germany will phase out coal and have 80% of its energy demand met through renewables.

Division of Ministries

As for the division of Ministries, the SPD, in addition to the chancellorship, will get six portfolios, including Defence and the Interior Ministry. The FDP will get four — the all-important Finance Ministry, Education and Research, Justice, and the Ministry of Transport and Digital Affairs. The Greens will get charge of Foreign Affairs, an expanded economic affairs portfolio that also includes energy and climate protection, family affairs, environment, and agriculture. It’s clear that FDP leader Christian Lindner will be the new Finance Minister, while Green Party honchos Annalena Baerbock and Robert Habeck will be in charge of foreign affairs and economic affairs, respectively.

In general, with the ideological proclivities of the coalition partners cancelling each other out, the new regime is expected to continue Ms. Merkel’s legacy of incremental change, with bold policy departures unlikely. For instance, Ms. Baerbock as Foreign Minister is likely to continue the Merkel line, which means the trans-Atlantic partnerships with the U.S., NATO and the U.K. will get top billing.

Germany will also continue to press for greater EU integration, while remaining open to dialogue with Russia and protecting trade ties with China. However, one could expect Ms. Baerbock to up the ante on human rights issues, which could have implications for Russia and China.

On the economic front, the southern European economies such as Italy and Spain may not be happy about a fiscal hawk such as Mr. Lindner becoming Finance Minister. While these countries want greater flexibility in the Stability and Growth Pact (SGP) — which lays down the outer limits for government debt and deficit for EU member-states — Mr. Lindner has made it clear that the SGP already has more than enough flexibility in its current form.

Immigration laws

Among the sections of the coalition agreement that have attracted a lot of attention are those proposing radical changes to immigration and citizenship laws. The new government will aim to offer dual citizenship to migrants (at present, available only for EU and Swiss citizens), and make it easier for refugees and asylum-seekers to bring their relatives to Germany. They will also make it easier for long-term residents to become naturalised citizens. The other highlights of the coalition deal include lowering the voting age to 16 and legalising the sale of cannabis.

While these measures may go down well with the parties’ vote base, there is an elephant in the room: the Bundesrat, or the upper chamber of German Parliament that represents the 16 States. Here, the traffic light coalition doesn’t have a majority, while the CDU and its sister party CSU (Christian Social Union) are a part of the government in 10 out of the 16 States. In other words, the new government will find it tough to push through major legislation without getting the opposition CDU also on board.

Interestingly, the most pressing issues facing Mr. Scholz as he takes charge don’t even figure in the coalition agreement: a resurgent COVID-19 crisis, rising tensions between Belarus and Poland, and Russia making aggressive military moves in Ukraine.

What Mr. Scholz has going for him is a track record of being able to navigate conflicting interests to further his own political agenda — starting off as a labour lawyer, he successfully positioned himself as someone on the rightwing of the centre-left SPD; after the federal elections, he could convince both the Greens and the Free Democrats to join hands and back him (the Free Democrats had infamously walked out of coalition talks with Ms. Merkel after the 2017 elections), and now he has to do more of the same for the next four years. As head of a traffic light coalition, his likely approach to policy decisions would be to start slowly, pause until the signal turns a clear green, and proceed with abundant caution, keeping well under the speed limit.


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Printable version | Jan 22, 2022 4:46:32 PM | https://www.thehindu.com/news/international/traffic-light-coalition-socialists-liberals-and-greens-all-together/article37726943.ece

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