When German chancellor Olaf Scholz took office six months ago, his two junior partners had the kind of firm plans that make John Lennon and God laugh.
Green Party eyes were fixed on climate change while the liberal Free Democrats Party (FDP) vowed to balance Germany’s post-pandemic budget.
Six months and one war later, the two parties are in political places they never imagined. The Greens, founded in the environmental-pacifist movement, want Scholz to send more heavy artillery to Ukraine. And free market FDP finance minister Christian Lindner has intervened in the petrol market and created a €100 billion off-balance investment fund for the military.
As Scholz heads to Ukraine, and inflation pushes up energy and other bills, a sharp drop this week in the Russian gas supply via the Nord Stream 1 pipeline gave a foretaste of potential chaos at the crossroads for Germany’s traffic-light coalition.
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[ Pressure builds on Scholz to boost military support ahead of planned Kyiv tripOpens in new window ]
In these turbulent times, Lindner and Green economics minister Robert Habeck have emerged as Berlin’s most interesting sparring partners. Not least when it comes to shaping — and financing — the “watershed” plan unveiled by the chancellor in February to reshape the German military and economy.
Both are vying for the upper hand on soaring petrol prices which, as elsewhere in Europe, have moved beyond €2 per litre.
Late last month FDP leader Lindner announced a €3 billion plan to cut taxes on petrol and diesel for the summer months, starting in June. But the price drop of €0.35 per litre at the petrol pump soon evaporated, renewing accusations of industry price-fixing and profiteering — facilitated by the finance minister.
When a study suggested petrol station operators were pocketing two thirds of the tax savings, Habeck backed calls for an “excess profits tax” on oil multinationals.
Blocked by Lindner, who insisted credible tax policy cannot be a political football, Habeck quickly pivoted towards a promise of tougher anti-trust laws with “claws and teeth”.
“At present these laws are difficult to apply,” he said, “because it must be proven that there is a cartel.”
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Just as lively is the wider energy question. A decade ago, after the Fukushima nuclear disaster in Japan, the Merkel administration revived plans to phase out nuclear power by 2022. Months away from the final plant closures, Lindner has pushed Green buttons. Given how Germany is struggling to wean itself off Russian gas, he said, Berlin “must not close its mind to a debate that is being held all over the world” on nuclear power.
Scholz moved quickly to close down that debate: his officials point out that Germany’s plan for a post-carbon economy involves rolling out renewable energy, not buying uranium fuel rods.
Instead Habeck is pushing ahead with plans to fast-track wind turbine planning and install new liquid gas terminals on Germany’s northern coast. His advisers frame Lindner’s move as a smokescreen, distracting from an FDP poll slump to eight per cent — three points below last September’s election result — while the Greens are the most popular coalition party on 23 per cent.
That is three points ahead of Scholz’s ruling Social Democratic Party (SPD), which is struggling to present a unified profile on arms exports to Ukraine or the domestic response to the war.
Taking office last year, Lindner promised to return Germany’s national debt next year to the constitutionally-mandated maximum of one per cent of gross domestic product.
Six months on, multibillion pandemic spending and anti-inflationary packages on energy and transport, have forced him to borrow €139 billion. Creative accounting means he isn’t even counting another €100 billion “special fund” for new tanks, planes and submarines.
“Mr Lindner is skating on ice,” said Prof Klaus Schubert, political scientist at the University of Münster, “because today’s political reality is running contrary to FDP political ideology.”
Adding spice to the Lindner-Habeck relationship is how the war in Ukraine, and its consequences, has shifted the political weight in Berlin from the traditionally more heavyweight finance ministry to the economics portfolio and Habeck.
“Christian Lindner is just an accountant now,” joked Prof Schubert. “Habeck and foreign minister Annalena Baerbock are good communicators, they don’t try to sugar coat bitter pills about this war and so far are the clear winner in Germany’s traffic light coalition.”