The much-vaunted traffic light departure is gone, a progress has become an alliance of convenience. And the friction in the coalition is increasing every day. After the defeats in North Rhine-Westphalia and Schleswig-Holstein for the SPD and FDP, the pressure on both parties to distinguish themselves increases, which makes work even more difficult. Rarely did a new, unprecedented coalition in the federal government have to start with major crises. This year there was a lot of money to distribute due to the third suspension of the debt brake in a row, but now, according to the wishes of the FDP leader and Federal Finance Minister Christian Lindner, this should end.
And since, in order to avoid disputes, the implementation of projects was not prioritized in the coalition agreement, there is now a risk of conflict over what should be implemented with the increasingly scarce money. In addition, the Russian war was of course not an issue when the coalition agreement was signed. Entirely new challenges arise from this, above all that of combating inflation.
The dispute over the tank discount, which was conceived in a nightly meeting of the coalition committee and is now widely regarded as a three billion euro mistake, shows how the coalition has worked so far: each side gets its successes, here the FDP. The meaningfulness is then on a different piece of paper. It is difficult to keep track of what is still required. From the extension of the energy flat rate of 300 euros to pensioners, whose record increase in pensions is just being “eaten up” by eight percent inflation, to a reduction in VAT to zero percent for staple foods. However, there are practical constraints that require a departure from previous practice. The federal government has reached its financial limit, says Lindner.
But SPD leader Saskia Esken has now opened a discussion about the “easiest” way to more money: Incur more debt because the economic balance is still disturbed – under this condition the brake, which only allows very little new debt, can be released . She wants to bring this up in the next coalition committee on June 22nd. Lindner blocks that, as does FDP Secretary General Bijan Djir-Sarai.
“The debt brake is in the Basic Law. It is non-negotiable and I would like to see more respect for the provisions of our constitution at this point,” Djir-Sarai told the Tagesspiegel. This coalition has already mobilized unprecedented future investments: 60 billion euros for climate protection and 100 billion euros for the modernization of the Bundeswehr are just two examples. In addition, relief measures in the tens of billions have been initiated to relieve the burden on citizens and alleviate the effects of inflation. But now the debt brake should be complied with again from 2023. “What you can’t do is keep going into debt at will,” emphasized Djir-Sarai.
For the Liberals, this is also about a brand core: solid state finances and a reduction in high social spending. And Djir-Sarai cites another argument shared by some economists against more new debt: “In this way we are not only fueling price developments, but also making existing debt more expensive because our creditworthiness is falling,” he told the Tagesspiegel. But if the situation remains tense, the pressure from the SPD and the Greens is likely to continue to grow. The conflict is so central that it could develop into a breaking point for the coalition, because Lindner does not want to appear as a big loser.
Here, Chancellor Olaf Scholz (SPD) only gave himself some breathing space with his speech in the Bundestag on June 1, in which he explained in detail for the first time what is being delivered – and what should also be delivered. But now the pressure is growing to act quickly.
The Russian offensive in the Donbas makes it more urgent that, for example, the first seven self-propelled howitzers 2000 are actually delivered in June. Ukraine’s Ambassador Andriy Melnyk saying they are expected around June 22 may not be wise given the transport and Russian attacks.
In particular, the chairwoman of the defense committee, Marie-Agnes Strack-Zimmermann (FDP), publicly drives Scholz and the SPD, while the Greens tend to rely on informal channels. They have understood that Scholz can do more in this way. Ukraine is trying to increase the pace itself, for example through negotiations with the Diehl armaments company. This is about the Iris-T-SLM air defense system, designed to protect cities against Russian attacks. It should be delivered at the end of October. But the Federal Security Council has still not decided what to do with Rheinmetall’s applications for the delivery of around 100 Marder infantry fighting vehicles and 88 Leopard battle tanks.
Several Marder armored personnel carriers that have been taken out of service by the Bundeswehr but are currently being modernized could be delivered to Ukraine immediately. “We are in the process of repairing 100 Marder infantry fighting vehicles, and the first vehicles are already ready,” said Armin Papperger, CEO of Rheinmetall, to “Bild am Sonntag”. “When and where the martens are delivered is the decision of the federal government.”
88 Leopard 1 tanks and more Leopard 2s are also in the depot for modernization. So far, the Chancellery only wants to use them in ring exchanges, and other countries want to give up tanks of Soviet design. The fact is that other western countries don’t supply battle tanks either, but the pressure is growing on all of them because the Russian troops are steadily gaining ground. “Dear traffic light government, why are you refusing the Ukrainian army these Marder infantry fighting vehicles, which Rheinmetall can deliver immediately, while Ukraine is bleeding to death in the Donbas before your eyes,” asks their ambassador in Berlin, Melnyk.
SPD and Greens warn that one must prepare for a Corona autumn, but the FDP is slowing down. Federal Health Minister Karl Lauterbach (SPD), like the federal states, insists on a quick change to the Infection Protection Act. This expires on September 23 – so the traffic light must decide which measures to take in the fall.
In April, under pressure from the FDP, the obligation to wear a mask in retail was removed from the state toolbox. In its most recent statement, the expert council set up by Chancellor Olaf Scholz insists that there must at least be the possibility of imposing measures such as the obligation to wear masks or contact restrictions.
Federal Minister of Justice Marco Buschmann (FDP) first wants to wait for the assessment of a council of experts, which is to evaluate the previous pandemic measures by the end of June. This could be due to the fact that this is staffed differently than the Expert Council. Half of the experts are nominated by the Bundestag and half by the Federal Government. The virologists Hendrik Streeck and Klaus Stöhr, for example, are also members here, and they stand for a less restrictive corona policy.
However, the fact that the FDP – above all with Justice Minister Buschmann – wants as few corona measures as possible is not undisputed even within the Liberals. The Free Democrats are concerned about the poor election results in the group of pensioners. Some in the FDP suspect that they would have liked more security. It was not wise that the FDP tried to make a name for itself in this field – so you lose nothing if you also include things like compulsory masks indoors at least as an option in the toolbox for the fall, and if there are weeks of debates and arguments better avoided here.
400,000 new apartments per year, 100,000 of which are publicly funded – that was the aim of the traffic light to alleviate the rent price misery. However, it is unlikely that this goal can be achieved. There was already a slump in newly built apartments in 2021 and now the conditions have deteriorated further: horrendous prices for building materials, delivery bottlenecks, rising interest rates, shortage of skilled workers. If there is a problem with new construction, how else can the rising rents be slowed down – especially in big cities like Berlin?
After the announcement by Germany’s largest real estate group Vonovia that it would increase its rents, the SPD leader Saskia Esken wants to enforce a tightening of the rent caps previously agreed in the coalition agreement in the traffic light coalition. So far, the rule has been that in tight housing markets, rents may not increase by more than 15 percent in three years – and not above the local comparative rent. The SPD, Greens and FDP agreed in the coalition agreement to lower this cap to eleven percent.
Now Esken told the Tagesspiegel: “It doesn’t seem enough to me. You could definitely go there again. Above all, we must prevent a further price spiral from being driven by index rents, which are linked to inflation.” The FDP, on the other hand, traditionally sees itself as an advocate for landlords in the country and is against excessive intervention or even a rent cap.
In their coalition agreement, the SPD, FDP and Greens were unanimous: they wanted to end the fossil-fuel era and therefore also leave combustion engine technology behind. But after last week the EU Parliament decided to end the combustion engine for 2035, the FDP was on the barricades. The decision contradicts the spirit of the coalition agreement, complained FDP leader Lindner. There must still be the option for “climate-friendly liquid fuels”. Otherwise Germany’s approval would be unthinkable. FDP Minister of Transport Volker Wissing also stated that vehicles with combustion engines should also be allowed to be re-registered after 2035 “if they can be proven to be fueled only with e-fuels”.
In addition, there are complaints in the industry that the conversion to more hydrogen-based production is not progressing quickly enough because of all the other challenges. In addition, billions in funding are needed here too. And because of the actually constantly rising CO2 price, the citizens should actually be relieved with a climate money. Although this is anchored in the coalition agreement, no details were recorded here. Federal Minister of Labor Hubertus Heil (SPD) only wants to support people with medium and low incomes. Sole earners with an income of up to 4,000 euros should receive the climate money – the amount is still open – once a year as relief, for couples the limit should be 8,000 euros.
However, the proposal met with resistance from the FDP. There insists that it must be paid to all citizens. And Lindner sees the priority in compensating for the inflation-related large effects of the cold progression for taxpayers – the argument about money only really starts at the traffic light.