Dave Keating
Olaf Scholz of the center-left Social Democratic Party, or SPD, was sworn in yesterday as Germany’s ninth chancellor, ending the 16-year tenure of Angela Merkel and her center-right Christian Democratic Union, or CDU. But while in other countries a swing from the right to the left might herald significant change politically, this is unlikely to be the case in Germany, which is known for its preference for pragmatic, consensus-oriented political leadership.
A key point to note is that Scholz was a member of the previous government, serving as vice chancellor and finance minister in Merkel’s fourth and final Cabinet, as part of a grand coalition between the Christian Democrats and the Social Democrats. And even though he is from a different party, Scholz has been positioning himself as representing continuity with Merkel, including by alluding to their shared origins from northern Germany at yesterday’s handover ceremony.
But a crucial distinction between the two leaders is that Scholz, unlike Merkel, is not in a grand coalition with his party’s main opposition. Instead, the SPD formed a government with the Greens and the pro-market Free Democratic Party, or FDP. This means that there will likely be some policy changes ahead. One such shift may come in the arena of foreign policy, given that the Greens—who negotiated for and got the Foreign Ministry portfolio during government formation talks—are regarded as more hawkish on Russia and China, and much more ambitious on foreign policy more broadly, than either the SPD or the CDU.
Scholz, who is not regarded as a hardliner on foreign policy, may face the first test of how much he could be influenced by his coalition partners if Russia invades Ukraine, as has been speculated in recent weeks and months. U.S. President Joe Biden suggested in a phone call with Russian President Vladimir Putin earlier this week that one of the consequences of such an invasion could be the cancellation of the nearly completed Nord Stream II pipeline bringing natural gas from Russia to Germany. Whether Scholz is actually prepared to follow through on that threat is not clear. But Greens leader Annalene Baerbock, who is now Germany’s foreign minister, has been vocal in her opposition to the approval of the pipeline. FDP leader Christian Lindner, who replaced Scholz as Germany’s finance minister, is himself dovish on Russia, but many other leading figures in his party are not.
On continental affairs, Scholz has shown a keen interest in cooperating with French President Emmanuel Macron’s vision for the European Union during France’s rotating presidency of the Council of the EU—better known as the EU Council of Ministers—in the first half of next year (more on that below). As finance minister,Scholz collaborated with Macron on a push for a global minimum rate of corporate tax as well as on new tax rules for global tech giants.
On climate, the new government looks like it will be more ambitious under Scholz’s chancellery than was the case under his predecessor, in large part due to the presence of the Greens in the governing coalition. In the lengthy coalition agreement reached by the three parties last week, they’ve moved the country’s coal phase-out deadline forward by eight years to 2030, while setting a target of doubling the country’s share of renewable energy to 80 percent by that same year.
In Other News
Macron prepares for France’s EU Council Presidency. French President Emmanuel Macron gave a speech today outlining France’s key priorities as it takes over the rotating presidency of the EU Council of Ministers, the upper chamber of the EU’s legislature, for the first half of 2022. He stressed a theme of “Europe that protects,” by which he means both citizens and the environment. The key policy proposals he is expected to prioritize during France's presidency are a tough Carbon Border Adjustment Mechanism, which would slap levies on imports from countries whose climate legislation is not as stringent as that of the EU—a list that would include the U.S. and China, the bloc’s main geopolitical rivals—as well as a more muscular approach to U.S. tech giants over data privacy and taxation avoidance.
Looming in the background of France’s EU presidency will be the country’s presidential election scheduled for April, which will have the effect of simultaneously boosting the importance and ambition of Macron’s EU agenda in the initial months, while serving as a potential distraction for government ministers. There is also a risk that once the French election is over, Paris drops all its ambitious plans for the union while it focuses on new domestic priorities and disappears from Brussels in the final two months of its term. That’s the most important period of any rotating presidency because it’s the crunch time to get policy priorities approved in the council. Moreover, though Macron’s speech may give a different impression, the country holding the EU presidency can only prioritize existing legislative proposals from the European Commission, as opposed to new initiatives of its own. So the big picture ideas Macron presented in his speech are really about using the presidency as a springboard for long-term discussions among EU member states, rather than goals to be achieved during France’s presidency.
Portugal’s interior minister resigns over a car crash. Portugal’s Interior Minister Eduardo Cabrita resigned Friday amid controversy over a June car accident, in which a highway worker was struck and killed by the car Cabrita was a passenger in. Cabrita's driver has been formally accused by prosecutors of negligent homicide over the death. The conservative opposition has in recent weeks heaped pressure on Cabrita to resign amid speculation over his role in the accident. The car was traveling at more than 160 kilometers per hour as the minister was heading back to Lisbon from a ceremony, prompting speculation that Cabrita had pressured the driver to significantly increase his speed. The accident occurred at a time when Cabrita faced growing criticism for a number of policy calls, including authorizing celebrations for the national football championship that were blamed for spreading COVID-19, as well as decisions that led to the transmission of the virus among migrant farmhands. An interim minister will be assigned to replace Cabrita until the next election, in which the ruling Socialist Party is favored to win reelection.
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