Olaf Scholz unveiled the coalition agreement between the Social Democrats, Greens and liberals that will allow him to succeed Angela Merkel as German chancellor, promising the “biggest industrial modernisation of Germany in more than 100 years”.
He said the agreement would pave the way for Germany to become a “pioneer on climate protection”, adding that “we will invest massively to maintain Germany’s status as a world leader”. Annalena Baerbock, Green co-leader, said the new government would introduce a “paradigm change” in German politics.
The coalition agreement was the fruit of almost two months of intense negotiations following the Social Democrats’ narrow victory in national elections on September 26.
Though the emphasis in the party leaders’ press conference on Wednesday was on climate change, public investment and more workers’ rights, the new government’s most urgent priority will be to stem a pandemic that is threatening to swamp Germany’s hospitals. Authorities reported 66,884 new coronavirus infections over the past 24 hours — a new record.
Under the coalition agreement, the SPD will get six ministries, in addition to the chancellery, while the Greens will be awarded five and the liberal Free Democrats (FDP), four.
The Greens will take control of the foreign ministry and a newly-created economy and climate protection ministry. Though no official announcement was made, people close to the negotiations said Baerbock would head up the first and Robert Habeck, the Greens’ co-leader, the second.
Baerbock said the parties had agreed to “return to an active European foreign policy”, one that was based on diplomacy and dialogue and “driven by values and human rights”.
The finance ministry goes to the FDP, which has a reputation for fiscal hawkishness: it is widely expected in Berlin that the party’s leader, Christian Lindner, will become minister.
Speaking on Wednesday afternoon, he said the coalition deal would ensure that Germany remained an “advocate of sound [public] finances — this is important in view of the concerns a lot of people have right now about inflation”.
September’s election marked a watershed in German politics. With Merkel quitting the stage after four terms as chancellor, her Christian Democrats slumped to their worst result and were forced into opposition for the first time in 16 years and only the third time since the second world war.
The CDU’s poor performance opened a path for Scholz to form a “traffic-light” coalition with the Greens and liberals — named after the three parties’ traditional colours. It will be the first such alliance on a national level in Germany’s history and is expected to put the fight against climate change at the top of its agenda.
The parties agreed to bring forward Germany’s exit from coal “ideally” to 2030 (it is currently scheduled to take place in 2038). They also said they would ensure that renewables account for 80 per cent of German electricity output by 2030, up from 45 per cent in the past year. In addition, some 2 per cent of German territory will be reserved for wind turbines.
The parties also agreed to legalise cannabis for adults, toughen rental controls, raise the minimum wage from €9.60 an hour to €12, and allow for the introduction of armed drones to better protect Bundeswehr soldiers.
The parties agreed to take a cautious approach to fiscal policy, insisting that Germany revert to the “debt brake”, a cap on new borrowing enshrined in the country’s constitution, which was suspended during the pandemic, in 2023.
Asked how they will finance their planned investments while sticking to the debt brake, Habeck said “we know exactly how we’ll pay for it” without providing further details.
The SPD and FDP will hold party conferences to approve the coalition deal while the Greens will put it to a vote of all the eco-party’s 125,000 members. If it gets the green light, the new government will be sworn in by the Bundestag early next month.
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