Climate, weed, sovereign Europe: Scholz’s roadmap

Suspended no-new-debt rule allowing govt to finance its way out of crisis

Berlin, Dec. 8: The centreleft-led alliance that will lead Germany from Wednesday has declared ambitions to make Europe’s biggest economy greener and fairer.

In their coalition agreement, the Social Democrats, the Greens and the liberal FDP addressed issues from climate protection to foreign policy to cannabis.

Here are the main points of their roadmap for Germany:

Germany’s no-new-debt rule had been suspended in the Coronavirus pandemic, allowing the government to borrow billions to finance its way out of the crisis.

But the country’s next government — known as a “traffic-light” coalition because of the parties’ red, green and yellow colours — plans a return to the rule that is anchored in the German constitution.

In their agreement, they pledged to reinstate the socalled debt brake by 2023.

Maintaining the debt brake was a must for the FDP, and Social Democrat Finance Minister Olaf Scholz — who will be Germany’s next chancellor — has also long been an advocate of the rule.

The parties also agreed to not raise taxes during their mandate, according to a tweet by FDP leader Christian Lindner — a win for his party which has refused to raise any fiscal pressure on taxpayers. In return, the Social Democrats secured their electoral promise of raising the minimum wage to 12 euros ($14) from the current 9.60 euros.

To keep housing affordable, the coalition agreed to build 400,000 new homes a year, including 100,000 using public funds. A cap will be introduced on rental hikes, limiting any increases to a maximum 11 percent in three years.

The three-party combo also agreed to lower the voting age to 16 — something likely to favour the Greens and FDP which have younger supporters than Angela Merkel’s conservatives, who are largely backed by Germany’s army of pensioners.

The Greens’ main win came in the form of an accelerated exit from coal energy, which is to be brought forward by eight years to 2030.

The parties also agreed to “further develop” the country's current climate protection law in 2022, and to “bring about all necessary laws, regulations and measures” on this front.

The expansion of sustainable energy will be “drastically accelerated and all hurdles and obstacles will be removed”, with the goal of ensuring that sustainable energy will make up 80 percent of the country’s mix by 2030. —