Berlin Cable

Dec 07, 2021

Scholz Takes Charge

As Germany’s new chancellor prepares to be sworn in, the shape of his incoming government suggests that quite some change is in store for Germany’s European and foreign policy.

Social Democratic Party (SPD) top candidate for chancellor Olaf Scholz, Greens party co-leaders Robert Habeck and Annalena Baerbock, and Free Democratic Party (FDP) leader Christian Lindner walk after a final round of coalition talks to form a new government, in Berlin, Germany, November 24, 2021.
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As so often, Germany’s feisty, leftist small-circulation die tageszeitung newspaper, or taz, got all the chuckles: “Merkel Mutation Becomes Dominant” (“Merkel-Variante setzt sich durch”), ran its headline the day after long-term Chancellor Angela Merkel had been given the traditional military tattoo, the Großer Zapfenstreich with all its torches and brass band glory, to mark her leaving office after 16 years. The accompanying picture showed the incoming chancellor, Olaf Scholz.

The big question is: How much will Scholz actually differ from his long-term predecessor? There are some signs that the answer will be: quite a lot.

As it happens, the “alternative,” counterculture taz, deeply entwined with Germany’s Greens, is becoming “the government press” for the second time in postwar history, after the SPD-Green government of Chancellor Gerhard Schröder and Foreign Minister Joschka Fischer (1998-2005). So, the frontpage can also be read a dry joke at its readers’ expense for enabling more “Merkelism” with a different face.

After special party congresses of Scholz’ Social Democrats (SPD) and the pro-business Free Democrats (FDP) approved the 177-page “coalition agreement” by huge majorities, the Green party base followed suit via a digital grassroots vote with an astonishing 86 percent approval, making Germany’s first “traffic light” coalition a done deal. It is also a sign of how much the Greens have moved to Germany’s center, and how much this center has been configurated itself, also when it comes to foreign affairs and security. In voting “yes,” Green members inter alia agreed to increased military spending, upkeeping Germany’s part in nuclear deterrence, and equipping the Bundeswehr with armed drones—all topics that used to deeply divide the party.

On Wednesday morning, Scholz will be voted chancellor in the German parliament and then sworn into office to lead a government that has put together a highly ambitious program. It is promising to “dare more progress” in transforming Europe’s biggest economy into a carbon-neutral, digitalized powerhouse, putting the fight against climate change center-stage, and promising to enhance Europe’s “strategic sovereignty.” And in the foreign realm—or as incoming Foreign Minister Annalena Baerbock calls it, “global domestic policy” (“Weltinnenpolitik”)—the new departure may well turn out to be more pronounced.

The Greening of Foreign Policy

The Greens have been much criticized for conceding too much—handing over the finance ministry to FDP leader Christian Lindner (which some observers in the United States fear as a near catastrophe), not getting iron-cast guarantees for climate goals (i.e., burning coal for electricity is supposed to be phased out “ideally” by 2030) or a commitment to introduce a national speed limit on Germany’s autobahns.

But the European and foreign policy picture that emerges is one of the Greens in key positions: Vice Chancellor and “Super Minister” Robert Habeck, in charge of a combined economy and climate ministry, and Foreign Minister Baerbock, if they manage to work together well, could form a formidable Green-Green “axis” within the government. This is the more important since the coalition agreement defines “European sovereignty” mostly as energy security, access to raw materials, and digital technology—all areas of immense foreign policy relevance in today’s geopolitics, and the Green duo has a good chance to put their stamp on them.

Habeck is joined in his new ministry by Franziska Brantner, the Green party’s European affairs expert with close links to French President Emmanuel Macron’s circle, and Sven Giegold, one of the most high-profile German Greens in Brussels, as “ministers of state” (Staatssekretäre), or deputy ministers, signaling the intention of “thinking European” when setting in motion Germany’s transformation.

Baerbock, the first female foreign minister in Germany in 151 years, takes over a ministry that has lost some of its luster vis-à-vis an overpowering chancellery and is in need of reform. Her picks to be her deputy ministers at the Auswaertiges Amt balance idealism with a dose of hard-nosed realism, with Katja Keul (who actually resigned her party membership over the Kosovo war of 1999, but later returned) and defense expert Tobias Lindner, with Anna Lührmann as minister for Europe, who was once the Bundestag’s youngest lawmaker but took time off from politics to advance her academic career and accompany her diplomat husband to crisis-ridden countries like Sudan and Libya.

The SPD ministers will struggle vis-à-vis their already well-connected Green colleagues, who used their time as party leaders to also make connections in President Joe Biden’s Washington: Christine Lamprecht, who already served as justice minister in the last government, will take over at the defense ministry (the third woman in a row) as a novice in security affairs, and Svenja Schulze, the former climate minister, takes over the development ministry. Neither can be said to have the oomph and star quality their Green colleagues bring to their new ministerial jobs.

The Scholz Factor

And then there’s Scholz. The new chancellor will first travel to Paris, possibly as early as Wednesday night, to follow tradition and hold talks with French President Macron. “The friendship between Germany and France is the basis for all our successful cooperation within the European Union,” he told DIE ZEIT newspaper a few days ago, whose journalists accused him of giving a “boring” answer. “To travel to Paris first is not only very sensible, but carries great emotional meaning.”

And it’s a rare occasion indeed when Scholz gets emotional. What’s more, he and Macron know each other well. It was Scholz’ finance ministry that laid the foundations for the Franco-German initiative for the post-pandemic recovery fund now called Next Generation EU (NGEU), based on the communization of debt. Scholz called it a “Hamiltonian moment.” It would be odd if Scholz would all but forget about his European ambitions, which include strengthening the EU financially and economically, once he has his feet under the chancellor’s desk. The fact that he has chosen as his chief economic advisor in the chancellery his current deputy at the finance ministry, Jörg Kukies, a former Goldman Sachs banker who studied at the Sorbonne and paved the way for NGEU behind the scenes, indicates that he will not.

What’s more, the signals that the coalition agreement is sending to European partners are all positive. Bottom line: There are few German “red lines” when it comes to EU reform, including its Stability and Growth Pact (SGP), which both Macron and Italy’s Mario Draghi have been pushing for. It “has shown its flexibility” and should form the basis to “further develop” (read: reform) the EU’s fiscal rules and goals, to strengthen “their effectiveness.” This suggests the hand of the FPD, which also insisted on describing NGEU as a “time- and volume-limited instrument,” but this is very far from a categorical “Nein” to any positive steps. Thus, Germany will move, albeit possibly slowly at first. And while Lindner will likely play the role of the German Kassenwart, the man who tries to keep the purse strings tight, he is unlikely to permanently stand in the way of transformative European climate, energy, and infrastructure projects if he can claim that he’s playing a part in setting European businesses free.

China and Russia

And even if Scholz wants, as some in his circle say, to only change the nuances of Merkel’s approaches to Russia and China, the dynamics of his government as well as the European and transatlantic context will see to it that broader change will come. Reportedly, Scholz asked European Council President Charles Michel to convey a message to Chinese President Xi Jinping in October that he would continue Merkel’s “pragmatic” course. However, the coalition agreement, which was concluded after these Chinese whispers, strikes a completely different tone.

The Greens’ call for tougher lines and an “across-the-government” approach to China are long-standing; it is an approach shared by the FDP. Lindner, who visited Hong Kong during the pro-democracy protests of 2019 to show his support, has even developed into something of a China hawk. There is little to suggest that Scholz and his chancellery would be able to sabotage the promised development of a “comprehensive China strategy as part of an EU China policy,” which is also “closely coordinated” with the United States. In an interview with taz, Baerbock already said she would mix “dialogue with toughness” when dealing with China, also indicating a departure from the “China dependence” narrative: “We shouldn’t make ourselves smaller than we are. Europe is one of the world’s biggest single markets. And China has a massive interest in it.” (In what may soon become routine, the Chinese Embassy in Berlin criticized Baerbock for her remarks.)

Vladimir Putin’s Russia, meanwhile, presents the incoming Scholz government with its first international security crisis. Should the amassed Russian forces really attack Ukraine, there is little question that Berlin would support a strong diplomatic and economic response, diminishing the German appetite for things like Nord Stream 2. The gas pipeline is completed but has not gone into operation yet, despite pressure from Moscow, as the Greens have managed to make their partners agree to the principle that European law must apply, which means unbundling, inter alia. Nord Stream 2 AG, a Swiss entity, is now in the process of setting up structures for a German company, and if approved by the German regulators, the European Commission will also get its say. In this regard, the Schröder-Merkel era, when no-one looked too closely at Russian activities, certainly seems to be coming to an end.

Henning Hoff is Executive Editor of INTERNATIONALE POLITIK QUARTERLY.

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