Mecklenburg-Vorpommern Economy

Goodbye Angela as a three-party coalition signs government pact


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  • Three parties reach a coalition agreement in Germany
  • Olaf Scholz becomes Federal Chancellor
  • Angela Merkel did not seek a new term as Chancellor

BERLIN, November 24 (Reuters) – Social Democrat Olaf Scholz announced on Wednesday a deal to form a new government coalition in Germany aimed at modernizing Europe’s largest economy, accelerating the green transition and ending the Angela Merkel era.

The alliance, the first at federal level between the ideologically diverse Greens, the liberal democrats (FDP) and Scholz’s center-left SPD, ends 16 years of Merkel-led conservative governments.

The three parties have a majority in the lower house and hope the government will be sworn in early next month after ratifying the 177-page coalition pact.

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Named after the respective colors of the parties, the traffic light alliance will usher in a new era of relations with Europe and aim to accelerate the digitization of the continent’s largest economy while at the same time maintaining budgetary discipline.

At a press conference in Berlin, flanked by leaders of the FDP and the Greens, Scholz recalled that when the first traffic light was erected on Potsdamer Platz in 1924, many had doubts as to whether it would work.

“Today, the traffic light is indispensable when it comes to regulating things clearly and providing the right orientation and ensuring that everyone is moving safely and smoothly,” he said.

“My ambition as Federal Chancellor is for this traffic light alliance to play a similarly groundbreaking role for Germany.”

Merkel is leaving big footsteps. She has guided Germany and Europe through several crises and is an advocate of liberal democracy in the face of increasing authoritarianism around the world.

Her critics say she managed rather than solved problems and left difficult decisions to her successor on many fronts.

PACKED AGENDA

The new government faces immediate challenges as Europe grapples with the aftermath of Brexit, a crisis on the European Union’s border with Belarus, and rising COVID-19 cases.

Scholz, 63, an experienced politician and finance minister in the outgoing “grand coalition” made up of the SPD and conservatives, said fighting the COVID-19 pandemic was his top priority. Continue reading

However, his coalition also has ambitious medium- and long-term plans, including a faster expansion of renewables, an accelerated phase-out of environmentally harmful coal and an increase in the minimum wage, according to their pact.

The incumbent Chancellor Angela Merkel receives a bouquet of flowers from the incumbent German Finance Minister Olaf Scholz before the weekly cabinet meeting at the Chancellery in Berlin, Germany, 24 November 2021. Markus Schreiber / Pool via REUTERS

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The coalition underlined its social-liberal orientation and also agreed to allow multiple citizenships, increase regular immigration, lower the voting age to 16 years and make Germany the first European country to legalize the sale of cannabis for recreational purposes.

The Greens co-chair Annalena Baerbock, 40, is to become Germany’s first female foreign minister, Scholz wants a gender-equitable government. Continue reading

While the German election campaign largely concentrated on domestic political issues, the parties in the coalition pact signaled openness to reforming the bloc’s fiscal rules, also known as the Stability and Growth Pact. Continue reading

They also agreed that Germany would remain part of NATO’s Nuclear Weapons Division, a move that will prevent a split in the Western military alliance in times of mounting tensions with Russia. Continue reading

The new coalition must weigh the Greens’ demands for a tougher stance on Russia and China on human rights against Scholz’s likely preference to avoid a confrontation over Taiwan and Ukraine.

FDP leader Christian Lindner, 42, is to take over the finance ministry and Greens co-chairman Robert Habeck, 52, is generally expected to take over a newly expanded ministry for economics and climate protection. Continue reading

GOOD BYE, ANGELA

As the chair of her possibly last cabinet meeting, Merkel said goodbye to her colleagues and Scholz presented the longest serving EU leader with a tree to plant in her garden.

Merkel, who did not seek re-election after four terms as chancellor, is still very well known, but her conservative party is in disarray. She is facing a leadership competition after her candidate for chancellor recorded the lowest vote ever in a federal election in a campaign susceptible to forgery.

Germany’s new head of state is more a competent than a charismatic politician who, like Merkel, represents moderate views and is capable of dialogue. In the election campaign, Scholz positioned himself as Merkel’s natural successor and even imitated her trademark.

The challenge will be to establish and maintain a consensus between the Greens and the SPD, widely viewed as natural center-left partners, and the fiscal FDP, which has historically been closer to Germany’s conservatives. Continue reading

The speed with which the parties concluded the coalition agreement was seen by some market observers as a good first sign.

“If this professional approach continues after the term of office, the country could finally get the reforms and investments it really needs,” said Carsten Brzeski, chief economist at ING Germany.

($ 1 = 0.8919 euros)

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Reporting by Holger Hansen, Andreas Rinke, Sarah Marsh, Markus Wacket, Thomas Escritt, Sabine Siebold and Christian Kraemer; Written by Sarah Marsh and Maria Sheahan, edited by Tim Heritage and Jon Boyle

Our standards: The Thomson Reuters Trust Principles.

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