It Takes Three to Dance

By Thomas Escritt

BERLIN (Reuters) – Whether Olaf Scholz from the Social Democrats or a conservative candidate becomes Germany’s next chancellor, they will likely need to form a coalition with two smaller parties that have significant ideological differences on many issues affecting the country’s future.

The Greens, led by former competitive athlete Annalena Baerbock and novelist Robert Habeck, alongside the business-oriented Free Democrats, headed by former energy trader Christian Lindner, will be key to establishing any majority. The challenge lies in finding common ground between these two diverse groups.

Baerbock humorously remarked about the challenges of collaboration, pointing out her similar age to Lindner and the fact that both he and Habeck are men, suggesting that their differences go beyond policies.

Despite the progressive environmental platform of the Greens and the libertarian stance of the FDP, their youthful voter bases align them on certain social and foreign policy issues.

A Unique Political Dance

In contrast to many countries where the head of state invites parties to negotiate for government formation, Germany requires parties to find their own partners. This dynamic has led to some confusion as the leading parties, the SPD and conservatives, both assert they have the authority to bring the Greens and FDP into coalition discussions.

However, the smaller parties have taken the initiative to locate common interests before engaging further. Should negotiations fail, President Frank-Walter Steinmeier can intervene as he did in 2017 when the FDP exited talks with the conservatives and Greens. This led to the formation of a "grand coalition" with the SPD that took office in March 2018. Scholz hopes to complete coalition negotiations by Christmas, but past experiences suggest unpredictability.

Climate Goals and Debates

The Greens aim for net-zero greenhouse gas emissions within 20 years, advocating for a major push towards renewable energy. In contrast, the FDP is targeting climate neutrality by 2050, while the SPD and conservatives are more inclined to extend their deadline to 2045.

The parties also clash over policies regarding speed limits on Germany’s unrestricted motorways, with the Greens supporting a limit that the FDP strongly opposes. Additionally, they diverge on the future of combustion-powered vehicles and taxation on air travel.

Controversies on Economic Policies

The FDP advocates for broad tax cuts that could incur substantial costs, estimated at around 60 billion euros, equivalent to nearly 20% of federal tax revenue. On the other hand, the Greens propose raising taxes for ultra-high earners and modifying the debt brake to support public investments.

While the CDU/CSU seeks gradual tax reductions, the SPD focuses on aiding lower-income individuals by increasing taxes on the wealthiest.

European Union Perspectives

The FDP and conservative parties reject a "debt union" and are determined to treat EU borrowing for recovery measures as a one-time event. The Greens, however, advocate for a unified European fiscal policy that promotes environmental, educational, and infrastructural investments, while the SPD views the recovery package as an opportunity to foster renewed trust within Europe.

Global Relations and Security

In international affairs, both the Greens and FDP exhibit more caution toward China compared to the SPD and conservatives, agreeing that Chinese firms should be excluded from Germany’s next-generation telecom networks for security reasons. They also express differing views on the Nord Stream 2 pipeline, affecting energy reliance on Russia.

Divergent Stances on Defense and Labor

The Greens are isolated among the potential coalition parties in their opposition to increasing military spending to meet NATO’s 2% GDP target. Conversely, the FDP stands apart on labor issues, advocating against the minimum wage increase supported by the other three parties.

Common Ground on Modernization

Both the Greens and FDP are proponents of investments to enhance digital infrastructure, catering to a younger electorate frustrated by outdated administrative processes. Their shared interests may help bridge gaps in their economic policies.

Converging Social Policies

On social issues, the Greens and FDP support legalizing cannabis sales and allowing voting at age 16, positions also backed by the SPD. They are also amenable to dual citizenship, a significant change for many long-term foreign nationals in Germany.

Additionally, both the Greens and FDP support permitting civil servants to wear religious headscarves at work, a stance not endorsed by the SPD and conservatives.