A progressive new government takes shape in Germany. Olaf Scholz’s three-party talks conclude with a promising coalition deal.

By Jeremy Cliffe


Outgoing German Chancellor Angela Merkel receives a bouquet of flowers from the man who will succeed her in office, Olaf Scholz. Photo by MARKUS SCHREIBER/POOL/AFP via Getty Images

A pragmatic, unflashy former mayor of Hamburg, Olaf Scholz is not usually one for gestures. Yet there were bursts of symbolism in the announcement this afternoon (24 November) of a successful three-party coalition deal between his Social Democrats (SPD), the Greens and the conservative-liberal Free Democrats (FDP) that confirms that he will succeed Angela Merkel as Germany’s chancellor, most probably in the week of 6 December.

The event took place in a converted warehouse at the Westhafen, a port area on Berlin’s industrial canal network still marked by cranes and train tracks, and now home to a trendy emerging art scene. The new government, went the message, is all about the future. It is known as the “traffic-light” coalition as the colours of the three parties are red, green and yellow. Scholz picked up on that, too, noting that a pioneering new traffic light was installed in 1924 in Berlin’s Potsdamer Platz; a symbol of both innovation and reliability. Then there was the title of the coalition deal itself, “dare more progress”, an obvious nod to the slogan “dare more democracy” under which the SPD federal chancellor Willy Brandt ushered in a period of modernisation from 1969.

To be sure, it was a sober occasion. Scholz and the other speakers began their remarks by noting the alarming rise in Covid-19 cases in Germany and indicating the priority the new government would accord the battle to bring down numbers.

Yet there was still a feeling of possibility about the announcements, a sense that something new is coming to Germany. Monday (22 November) was the 16th anniversary of Merkel assuming the chancellorship. As I argued in my recent New Statesman cover feature, her time in power has provided stability and maturity, but has also been too reactive and too slow to embrace change. Plenty of younger voters do not remember a time before her. Now she is going and a new government is on its way, combining three parties that have never governed all together at federal level. The joint programme they have formulated contains many steps that will move the country forward.

Major commitments draw on the key manifesto pledges of all three parties. The SPD gets a €12 minimum wage, pensions stable at a minimum of 48 per cent of average wages and 400,000 new homes built a year. For the Greens, the end to coal power is brought forward from the current goal of 2038 to “ideally” (a qualification at which some in the party bridle) 2030, as well as the promise of 80 per cent of energy from renewables by 2030. The FDP gets the introduction of equity pensions, new tax incentives for businesses and a maintenance of the “debt brake”, which heavily limits deficit spending.

Perhaps the biggest topic of disagreement – between the SPD and Green emphasis on increased investment and the FDP’s fiscal hawkishness – is bridged through a combination of open-ended language and canny fiddles (removing certain green investments from the debt brake restrictions, for example, and expanding the use of off-balance-sheet investment bodies to finance public capital spending). That should allow a modest loosening of Germany’s budget strings when it comes to investment in decarbonisation, digital infrastructure and other such suitably future-wards causes. On fiscal policy in the wider euro zone, the coalition deal is relatively unspecific but agrees that doctrinaire rules such as those of the Stability and Growth Pact can be “developed further”. That a deal signed off by the flinty FDP includes such open-ended language puts it on the more positive end of the spectrum of realistic possibilities.

Another area of potential disagreement is foreign policy. The Greens are firm on human rights and democracy but also have pacifist traditions. The SPD has been known to put exports above values in its attitudes to autocracies such as Russia and China. The FDP mainstream is keenly Atlanticist. Yet here, too, compromises were found – helped, no doubt, by Scholz and the Green co-leaders Annalena Baerbock and Robert Habeck being on the Atlanticist wings of their respective parties. The coalition deal supports Taiwan’s participation in international organisations – the first time that Taiwan has even been mentioned in a German coalition deal – and uses tough language on Russia, demanding an “immediate end” to its interference in Ukraine. Under the deal Germany seeks observer status to the Treaty on the Prohibition of Nuclear Weapons (which bothers some Nato allies), but it reaffirms German participation in nuclear sharing (which reassures them). All together it amounts to a mixed picture for allies but with more positives than negatives both for European partners such as France and for alliance partners such as the US.

Where fiscal and foreign policy involved compromises, liberalising social policies are an area of broad common ground between the three traffic-light parties. And it shows – it is there that the coalition deal is boldest and most transformative. For example, the incoming government intends to legalise cannabis, lower the voting age to 16, allow doctors to provide information about their abortion services (where now they cannot) and facilitate self-identification for trans people.

Most striking is the change to citizenship rules. Until the late 1990s, German-ness was still overwhelmingly treated as a matter of inheritance – of whether one had German ancestry or not. That has changed, but gradually. Now the traffic-light parties propose to make dual citizenship widely available, to increase integration programmes and to reduce greatly the time from arrival to naturalisation – in cases of particularly well-integrated migrants, to just three years. Germany’s rapid transformation from a country defined by an ethnic identity to one defined by constitutional identity (that is, one that can be acquired by adherence to values and institutions rather than family background) is remarkable and profoundly welcome. It also reflects Scholz’s own policies as mayor in Hamburg, where, as I wrote in my recent profile, he successfully combined openness to migration with a heavy emphasis on rapid integration and naturalisation.

Though ministerial roles are not formally part of the coalition deal, we also learned today which parties have obtained which seats in the incoming federal cabinet. Alongside the chancellery, Scholz’s SPD secures the ministries of the interior, defence, health, labour, international development and housing. The Greens get a mighty economy-climate ministry (under Habeck), the foreign ministry (under Baerbock), as well as the environment, family and agriculture ministries. The FDP secures the crucial finance ministry (which will go to Christian Lindner, the party’s leader) as well as the transport, education and justice ministries. How the three camps will interact and cooperate remains to be seen, but all professed a great commitment to collegiality and collective endeavour at the announcement.

Will the government deliver? Past performance is no guide to future results, of course, but independent analyses by the Bertelsmann Foundation found that Germany’s last two federal governments had both implemented some 80 per cent of their coalition deals by the end of their terms.

The traffic-light coalition takes power at a troubled time. Covid-19 is once again scything through central Europe. Wider challenges abound: Vladimir Putin’s revisionist Russia, fraught relations with China, an uncertain transatlantic relationship, fractures in the EU, a German industrial model in need of renewal amid rapid technological change, demographic decline, stubborn domestic social and cultural divisions.

Yet if the motley cluster of figures likely to join Scholz’s cabinet – spanning three parties and three ideological traditions, and ranging from the traditional left to the free-market right – together manage to deliver anything like 80 per cent of the coalition agreement published today while governing in the advertised spirit of modernity and progress, then they will put Germany in a very much better place to confront these challenges. Good luck to them.