«GROKO» the New German Government Coalition: Is It Good or Bad for Europe? Or Motor or Obstructionist for Europe?

Renate Schroeder

Апрель 28, 2018

On the 4th of March, the SPD (20, 5%) gave the green light to form a grand coalition (“Groko”) together with the CDU/CSU (32, 9% in total) after months of negotiations. The European neighbours, France in particular, had been waiting for it in order to start shaping the future of Europe. But how high on the Groko agenda is the reform of the European Union? It took Germany six months to form a new government, something not unheard of in other European countries, but new in Germany's political history. The CDU (Christliche Demokratische Union), together with its more conservative Bavarian sister party, the CSU and the centre-left pro-European party SPD (Soziale Partei Deutschland) felt a strong moral obligation to agree on a coalition contract. Not least, it was said, they owe it to their partners within the European Union, weakened by the BREXIT, where a Euro-sceptical movement is growing throughout Europe. A new faction led by the Netherlands and Austria, and backed by the Visegrad countries, works to halt any further integration on the EU supranational level. It is contradictory then? Let's take a closer look at what the 179 pages long coalition contract says about Europe, or rather Germany's role within the European Union. «A new departure for Europe» is the title of the new coalition contract of CDU/CSU and SPD. The first ten pages deal with the Europe plans of the new German government. A clear message is that together with France's President Macron, the EU shall be reformed.

The need for financial reforms

The last GROKO coalition contract from 2013 mentioned Europe for the first time on page 156, this time it is on page 6, immediately after the preface. The coalition partners, so says the coalition contract, are ready to put more money into the EU budget, this being among other a reaction on Brexit: the exit of the UK from the EU will leave a financial hole between 8 and 12 billion euros, it is estimated. Planned is for example a European budget for investments to finance for example short term measures against unemployment and structural reforms. President Macron is also eager to introduce such an investment budget line for the Euro-zone, and if possible a European Minister of Economy and Finance with far-reaching powers. But this is not intended by the Germans, and certainly would not find a broad majority among Germany's voters.

However, some consensus exists between France and Germany about reforming the European Stability Mechanism (ESM), the Eurozone’s permanent bailout fund for struggling economies, launched as a permanent agency based in Luxembourg in 2012. The ESM – whose biggest contributors are Germany (27%), France (20%) and Italy (18%) - shall be expanded to a «European Monetary Fund (EMF) controlled by parliament» to make it democratically accountable. The German Bundesbank is against such reforms, and so was outgoing Finance Minister Wolfgang Schäuble who was more interested in reducing the Eurozone unsustainable debt through market discipline. The SPD managed to change the tone in the coalition agreement insisting that Europe needs a Franco-German pulse and new financial instruments are needed to foster stability and reforms.

These intentions may however be flawed by the CDU/CSU. Both are intending to adopt a position on Europe which would give the German Chancellor Angela Merkel a limited mandate to negotiate the European reforms. Is Angela Merkel, Europe's longest-standing political leader, strong enough within her own party first and her coalition junior partner to help Europe make the necessary steps needed to face its diverse crisis?

It will certainly be difficult to reach a consensus between the German and French positions in economic issues. Experts and politicians of both countries agree that a structural reform of the Eurozone is needed, as the structural problems that led to the financial crisis in 2008 have not vanished.

What is the current German position, if there is any?
More European solidarity

Several analysts believe that in particular the SPD has positioned itself to a fairer Europe based on solidarity. One sentence in the coalition contract reflects this change of position «Generally speaking we presume that the EU must stand for solidarity among its member states and for its citizens. The principle of reciprocal solidarity must also be reflected within the EU budget.»

The European Union should also be more social and fair in the area of employment and social policy. The coalition contract refers to a «social pact» which should strengthen the social fundamental rights of the EU citizens. One should get the same salary for the same work at the same place in the EU. Further, a «framework for minimum income and national basic protection systems in the EU» should be developed.

More proposals, such as on strengthening the European Parliament (EP), better taxation for Internet players such as Google, Facebook and Amazon and some other concrete proposals are all mentioned in this contract. The question now is, will it be implemented or is pure rhetoric to please the SPD members? Was it written by Martin Schultz, former EP President and part of the coalition negotiations, but not a member of the current government, and only signed by the CDU and CSU to finally get a government?

Though Chancellor Merkel is certainly convinced that the EU requires a major overhaul, if it wants to survive in an ever more polarised world, backbenchers in her conservative bloc, especially the Bavarian Christian Social Union (CSU), are much more sceptical. They are afraid that any steps could bolster the far-right Alternative for Germany (AFD), a party that is anti-European by definition and now the first opposition party in the German Parliament. Having said that a first major dispute is evolving within the coalition, as the SPD holds on to what has been agreed in the coalition contract. Achim Post, Vice President of the parliamentary group of the SPD, said in a recent interview to the Süddeutsche Zeitung that there is no going backwards going to the commonly agreed positions regarding the Monetary Fund and the urgent reforms of the European Union.

Merkel’s own party taking a step back from Europe and from coalition contract

According to a leaked draft position, the CDU/CSU refuses such an ambitious reform. They justify this change by the atmosphere among their members at local level, who are afraid that too much Euro-friendly German policy would feed into too much opposition from the AFD and the Freie Demokratische Partei (FDP).

The new Foreign Minister, Heiko Maas (SPD), is certainly pro-European and makes clear the EU is his main emphasis. His first visits went to Paris, Warsaw and Rome. Also Olaf Scholz (SPD), Finance Minister replacing CSU conservative Wolfgang Schäuble, promised a change (Kurswechsel) stressing the financial obligations on Germany after the British withdrawal. He also said he would change Germany’s attitude towards Greece and other debt driven countries that are part of the Euro-zone... Dealing with the EU within a conservative coalition may be his most difficult challenge in the coming months.

The lack of common position on this important issue among the coalition partners might explain why the new government has avoided putting EU issues on the political agenda in the first weeks. Issues such as migration, asylum right and health care have dominated so far the national discussions, besides how to deal with the AFD.

It seems the EU Commission, President Macron and many others are waiting for a clear position from Germany. Meanwhile, Macron is moving forward on the European question. For sure, he needs to get Germany on board to make his ideas a reality.

On Tuesday 17 April, we shall learn how close or distant Berlin and Paris are when it comes to the future of Europe as President Macron will discuss his ambition for European reforms in the European Parliament during the Strasbourg plenary session. For sure, he needs to get Germany on board to make his ideas a reality.

By Renate Schroeder, Director of the European Federation of Journalists