Germany – traffic light coalition: who should pay for it?

The German traffic light government partners like to use great historical models. It starts with the motto of the coalition agreement between the SPD, Greens and FDP: “Dare to make more progress.” It is reminiscent of Willy Brandt’s dictum “Dare to dare more democracy”, which the first social democratic chancellor had proclaimed in 1969. In terms of economic policy, the past is tied to, but a caesura is also heralded: In the motherland of the “social market economy”, red, green and yellow are now propagating the conversion to a “socio-ecological market economy”.

If the three parties want to make their announcements about a climate-neutral industrial country come true, a huge upheaval in energy policy is imminent. The green co-party leader and probably the next economics minister, Robert Habeck, announced that every legislative proposal would be checked for its climate impact. By 2030, 80 percent of the electricity demand should come from renewable energies. The previous target of 65 percent is thus clearly exceeded. At around 45 percent, Germany is still a long way from the new brand.

Goal: Almost 30 times as many electric cars

In contrast to neighboring France, nuclear power is not considered an environmentally friendly technology. And coal-fired power plants should “ideally” go offline eight years earlier than planned, in 2030. Therefore, solar and wind energy will have to be massively expanded between Passau and Flensburg in the coming years. The capacities for wind farms in the North and Baltic Seas are to be increased by 50 percent, to 30 gigawatts. On land, two percent of the area should be available for wind turbines. Conflicts with protectors of the landscape and protests against large power lines will accompany the coalition partners.

Social Democrats, Greens and Liberals expect 200 gigawatts from solar energy by 2030. At present, only around 55 gigawatts of photovoltaic capacity are available. In order to advance the expansion, planning and approval procedures should run faster and “all suitable roof areas” should be equipped with solar modules; Mandatory for new commercial buildings.

In the automotive industry, which is so important for Germany, the upheavals will proceed much faster than under the era of long-term Chancellor Angela Merkel. The Greens could not enforce their ban on the registration of new cars with internal combustion engines from 2030. In the coalition agreement, however, the goal of “at least 15 million fully electric” cars is set by then. At the beginning of October this year there were only 517,000. The future values ​​of the charging stations are also far removed from the current reality: One million “public and non-discriminatory charging points” are desired by 2030, as of February this year it was not even 40,000.

The three parties want to put “considerably more” funds into the rails than into the road. Projects to implement the so-called Germany cycle enjoy priority, in which the most important traffic nodes are to be approached every half hour.

The SPD, Greens and FDP want to put "considerably more" funds into the rails than into the streets.  - © APA / dpa / Bodo Marks

The SPD, Greens and FDP want to put “considerably more” funds into the rails than into the streets.

– © APA / dpa / Bodo Marks

The “decade of future investments” proclaimed by Habeck costs enormous sums of money – including for the digitization of administration and schools. The targeted tripling of the organic agricultural area to 30 percent will also not be free of charge. There are also social policy measures. During the election campaign, the SPD promised that the minimum wage would be increased from 9.60 to 12 euros per hour and that the minimum pension level of 48 percent would be maintained. At the time, Olaf Scholz kept talking about “respect for life’s achievements”. He had to keep these promises. The Hartz IV reform under Gerhard Schröder, which is hated by many social democrats, is also being softened. With the new “Bürgergeld”, for example, assets are no longer counted towards state benefits.

Slow down the debt brake

Where do the billions for implementation come from? Especially since Scholz has also promised that Germany will return to the debt brake from 2023 – after overcoming the Corona crisis. This means that the federal government’s net borrowing per year is limited to 0.35 percent of gross domestic product. On Thursday rumors made the rounds that the SPD, Greens and FDP want to put more than 50 billion euros into a climate fund in a supplementary budget before Christmas. This means that the German debt limit of 240 billion euros is almost exhausted. And the debt limit set at 100 billion euros for 2022 could possibly be too tight. It already seems certain that the traffic light parties want to extend loan repayments from two to three decades as a result of the pandemic.

In addition, the likely next finance minister, Christian Lindner, is relying on private investments for financing in the spirit of his economically liberal FDP. It attracts with “super write-offs” in the next two years, if funds flow into climate protection and digitization. In the coalition agreement, however, there are no details about the amount of depreciation. Far back, on page 159, however, red, green and yellow admit that the budgetary starting position is “extremely demanding”.

He did not see how these generous promises were financially underpinned, criticized the parliamentary group leader of the conservative opposition, Ralph Brinkhaus. The chairman of the IG Metall trade union, Jörg Hofmann, also refers to the question of financing. At the Federal Association of Industry, President Siegfried Russwurm criticizes too many vague declarations of intent.

That the members of the Greens – they have been able to vote on the coalition agreement for ten days since Thursday – are still unlikely to vote against the traffic lights. In the case of the SPD and FDP, decisions about the coalition are made at party congresses. The week after next, Olaf Scholz’s cabinet is to be sworn in.

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