Merkels successor has coalition around, this is what Germany is going to do

Two months after the election, they are out, the Social Democratic SPD, the Greens and the Liberal FDP. โ€œThe traffic light is on,โ€ said SPD foreman Olaf Scholz, who is very likely to be sworn in as Chancellor in early December. He therefore refers to the colors of the three parties: red, green and yellow.

With a 177-page coalition agreement under the motto Seeking more progress, the new coalition outlines how it wants to guide the Germans safely on the way forward.

It is clear that in the coming years, the new government wants to do more to limit global warming, a prerequisite for the Greens for government participation. Earlier, the German Constitutional Court ruled that Germany should tighten climate policy. With the current coalition agreement, Germany will achieve that, expects Robert Habeck, co-chairman of the Greens.

For example, huge investments in the energy network and expansion of the capacity of solar and wind energy must ensure that by 2030 at least 80 percent of all power consumption comes from renewable sources. Also, 15 million fully electric cars have to drive around Germany, which would amount to about a third of all passenger cars.

However, there will be no previous ban on internal combustion engines, which the Greens hoped for earlier. It does work on closing coal-fired plants earlier in 2030 instead of 2038, but that is ideally . However, the government says that there will be a CO2 price that does not fall below 60 euro per ton ne, which, according to Habeck, will naturally ensure that coal becomes unprofitable.

Higher minimum wage

The Social Democrats can also make some election promises. The minimum wage, which is currently still at 9.60 euros per hour, goes to 12 euro per hour. With that, 10 million Germans will suddenly earn more, says Scholz.

Pensions are not tormented. That is, the deposit will not be increased and the benefit will not be reduced. The retirement age also does not go up. This is a very expensive move, as the government in Germany has lost more and more money on pensions due to the increasing ageing population.

What does change is that part of the pension money will be invested by a kind of state-run pension fund. With this, the government is taking more risk than so far, but the government still tries to bring a little more money into the market to pay the rising costs. Even though it wont be enough for that.

Where a lot of money will go are investments in infrastructure and digitization. In many places in Germany, for example, the internet connections are still very poor or even absent.

The pennies

For the Liberals, it was important that a number of things do not change. For example, there will be no tax increase, no capital tax, no speed limit on the German motorways and the much-discussed debt brake remains intact again from 2023.

In order to pay for all plans, the temporary easing will probably be made quite a lot of use until then to borrow more. It is also examined whether a type of government funds with, for example, loans and guarantees can stimulate private investment.

Weed and LGBTQ rights

What is also visible: this government wants a more progressive Germany. The sale of weed is legalized and non-heteros get more rights. This makes it much easier for two mothers to both be legally older to their children.

At

the same time as the presentation of the coalition agreement, it was also announced which party may lead which ministries. The SPD gets the most there as the largest party, and is also taking over the Ministry of Health in the pandemic. Infrastructure goes to the FDP; as expected, that party is also in charge of Finance, the place that is important for limiting the debt burden. The new โ€œsuper ministryโ€ of Economy, Climate and Energy Transition is going to the Greens.

How to move on now?

Now that the summits of the three parties are out, they still have to submit the agreement to their party members. At the Greens, the party members will have ten days from tomorrow to look over it, the FDP and SPD will hold a party day at the beginning of December.

Then the whole list of ministers will also be clear. A few names are already going around; everything suggests that FDP foreman Lindner becomes Minister of Finance, and Greens leaders Habeck and Baerbock go to Economy/Climate and Foreign Affairs respectively.