Scholz and SPD must look east and west

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After four unsuccessful attempts, Olaf Scholz and his Social Democratic Party (SPD) won the federal elections in September and took over the Berlin Chancellery this week because they dared something new.

After years of sorry / not sorry internal wrangling over long-standing economic and social reforms, the Scholz-led SPD campaign looked to the future and promised voters the most ambitious and progressive government in two decades.

The pitch worked and, when the Merkel era of grand coalitions ended this week, it was replaced by a “traffic light” coalition. After 16 years of centrist stability, Berlin is slowly shifting Germany to the left, with liberal and green tendencies.

SPD made peace offer to traditional working class voters alienated by 2003 reforms under Schröder

Despite the current challenges of the pandemic – and the debt – the new government in Berlin is promising an overhaul of the controversial 2003 reforms of the SPD. A minimum wage of € 12 will offer a salary increase to 10 million people and an increase in social benefits to nearly four million households with children and people at risk of poverty.

Just as crucial as the money are plans to end the distrustful and mean-spirited look of the SPD’s social reforms of 2003, especially intrusive – and often humiliating qualification checks.

With this, the SPD, pushed by its influential left wing, made a peace offer to the traditional working class voters alienated by the 2003 reforms under Gerhard Schröder, the last chancellor of the SPD.

Progressive social policies

Young voters in the SPD and the Greens, meanwhile, can expect progressive social policies that will allow lesbian couples to have both names on their child’s birth certificate.

Trans people will no longer have to go to court to determine their gender while public health insurance will now cover the costs of reassignment surgery.

The third party in the coalition, the Liberal Democratic Party (FDP), has kept its key election promises: no tax increases and a return to balanced budgets by 2023.

The SPD is hoping for a mandate of several terms, inspired by its two previous periods as head of government. The social-liberal era of the SPD-FDP, which lasted 13 years until 1982, increased social benefits, prioritized civil rights – especially for women and gays – and opened the doors to l university to students from low-income families.

With remarkable timing, the Moscow-Kiev standoff forced the SPD’s foreign policy chickens to return home to roost

The seven-year SPD-Greens alliance, led by Schröder from 1998, brought climate policy into mainstream politics, liberalized citizenship rules, and introduced same-sex civil partnerships.

Beyond domestic politics, the plans of the traffic light coalition are less clear. Green Party co-leader Annalena Baerbock, now foreign minister, this week pledged to prioritize “the rule of law and human rights”. With one eye on Warsaw, she vowed that she “would not let our European foundation collapse”.

But, before going too far, a senior SPD official reminded him – on national radio – that key foreign policy will, as in previous administrations, be run from the chancellery.

Ukrainian border

Olaf Scholz prefers to continue the geopolitical pragmatism of his predecessor, but the accumulation of Russian troops on the Ukrainian border will force him to show his hand and choose his path: the path of Ostpolitik and the detente of the first German Chancellor of the Postwar SPD Willy Brandt, or his more robust pro-Washington / NATO approach of successor Helmut Schmidt.

With remarkable timing, the new Moscow-Kiev standoff forced the old SPD foreign policy chickens to return home to roost. For this, Scholz can thank his former boss Schröder.

Before stepping down in 2005 and becoming a consultant for Russian state gas company Gazprom, Schröder’s government supported the Nordstream plan for undersea gas pipelines carrying Russian gas directly to Germany.

With the second gas pipeline just completed, amid the tumult of Moscow, Berlin must decide whether or not to issue an operating permit. Scholz’s decision will color, for years to come, his administration’s relations with Washington, Moscow and Berlin’s eastern neighbors.

A similar dilemma hangs over China. Expectations that a Scholz administration will adopt a more robust common European line on Beijing collide with the reality of Germany’s economic dependence on the communist state: four in ten Volkswagens are now sold in China.

Energetic transition

The decisions on Russia and China will in turn signify the success or failure of Berlin’s ambitious green energy transition. With the closing of the last nuclear power plant next year, the Greens pushed to shut down the last coal plants eight years earlier, in 2030.

Avoiding an energy deficit over the next decades means, in addition to Russian gas imports, accelerating the planning and deployment of wind turbines, solar panels and a north-south energy pylon “Autobahn”.

The most pressing challenge for the new chancellor comes this weekend at home, with the election of a new secretary general of the SPD. The likely candidate is Kevin Kühnert, a former left-wing enfant terrible who, as head of the SPD’s youth wing, thwarted centrist Scholz’s own leadership bid in 2019.

The most pressing challenge comes this weekend at home with the election of a new secretary general of the SPD

Scholz, as a former radical left in his youth, hopes that Kühnert’s political ambitions – and the loyal army of young left-wing parliamentarians in the Bundestag – will not spark post-election squabbles similar to those of 1999, which resulted in the resignation of left-wing SPD finance minister Oskar. Fountain.

In Christian Lindner, Scholz has a finance minister closer to his political tastes. But the liberal FDP leader will need the Midas touch to fund welfare increases and green energy plans – while keeping tax rates unchanged.

On the economy and European affairs, interesting ministerial debates emerge between the two. Scholz brought EU federalists into his inner circle as political advisers alongside progressive economists who last year broke with German fiscal orthodoxy to support the EU’s emergency fund. EU in the event of a pandemic.

The Linder team seems more intergovernmental and, in a nod to traditional ordoliberal economic thinking, promises to bring Berlin back to effectively balanced budgets by 2023.

Germany’s eurozone neighbors, who were hoping for a post-pandemic and post-election conversion in Berlin’s economic thought, may need to think again.

Derek Scally is the Berlin co-sponsor


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