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EU partners welcome German coalition’s planned ‘new departure for Europe’

Former European Parliament president, current head of Germany’s Social Democrats (SPD) and soon-expected-to-be Foreign Minister Martin Schulz celebrated his party’s coalition deal with Chancellor Angela Merkel’s conservatives  on Wednesday saying it meant Germany “will return to an active and leading role in the European Union.”

Read more: Germany’s Angela Merkel finally reaches coalition deal with SPD

For their part, European leaders praised Berlin’s grand coalition agreement, which still requires approval from the SPD party base.

EU Economics Commissioner Pierre Moscovici welcomed the coalition announcement via Twitter: “Coalition agreement in Germany: good news also for Europe!” 

Manfred Weber, who chairs the European People’s Party (EPP) which includes Merkel’s center-right Christian Democratic Union (CDU) in the European Parliament, tweeted: “Good signal from Berlin to the people and whole Europe: the future German government is ready to contribute to a stronger and better Europe. This is a clear pro-European approach and an answer to populists.”

Schulz described the coalition agreement on Europe as: “An end of forced austerity.” Speaking at a press conference on Wednesday with his coalition partners, Schulz said, “I think we have achieved what will be a new awakening for Europe and a new dynamic for Germany.”

However, the number of ministries — foreign, finance and labor  given to the SPD had some German commentators musing on what they saw as concessions from the conservatives: Julian Reichelt, editor of Bild, quipped: “This is the first SPD government led by a CDU chancellor.”

Merkel said the deal would form the basis of: “A good and stable government.”  

A European welcome

Martin Selmayr, the influential chief-of-staff to European Commission President Jean-Claude Juncker, welcomed the accord: “A 170-page agreement for four years, opened by a strong Europe chapter, numerous committed references to the EU framework in all sectoral chapters.”

Schulz said the key point was that the government was prepared to put more into the EU budget. Saying he has often spoken with French President Emmanuel Macron on the telephone, Schulz added that he wanted to work with Paris to champion: “A better and fairer Europe.” 

Writing in the Frankfurter Allgemeine, former European Central bank (ECB) chief economist Otmar Issing said the coalition agreement represented: “A farewell to the idea of a European community aimed at stability.”

‘A new departure‘ awaits SPD members’ approval

The prominently placed five pages on the subject of the EU in the coalition document were titled: “A new departure for Europe!” It called for the eurozone’s ESM bailout fund to be turned into a full-blown European Monetary Fund, and for funding to shield the eurozone from crises. 

The SPD’s 463,000 members need to sign off on the deal in a special ballot expected by early March. The party’s standing in opinion polls has fallen to a record low of 17 percent after September’s election — its worst showing in a generation.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Shifting responsibilities

There are five “classic ministries” in Germany’s government – Finance, Foreign, Interior, Justice and Defense. Angela Merkel’s Christian Democrats (CDU) are ceding direct control of two of them. One, finance, is to change from right to left of the political divide, moving from CDU to Social Democrat (SPD) hands. Other switches are likely in less prominent portfolios.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Major prize changes hands

The transfer of the Finance Ministry from CDU hands to the SPD is the biggest surprise of the deal. The minister plays a major role at the European level as evidenced by the CDU’s Wolfgang Schäuble during the eurozone sovereign debt crisis. Hamburg Mayor Olaf Scholz, a centrist within the SPD, will likely get the title of deputy chancellor in addition to finance minister.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Bavaria to take home ministry

The Interior Ministry, which deals with law and order within Germany, looks set to stay in the hands of Merkel’s conservatives, but not her own CDU. Touted for the position is the leader of Bavarian sister party the CSU, Horst Seehofer (left). The Bavarian party has taken a tougher line than Merkel on immigration. The conservatives suffered losses to the far-right AfD in September’s election.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Germany’s top diplomat

Under the deal, the SPD will keep control of the Foreign Ministry. Since 1966, the ministry has been run by a member of smaller coalition partners. The SPD’s Sigmar Gabriel has been in the role in a caretaker capacity after Frank-Walter Steinmeier was elected president, but the party’s Martin Schulz (pictured), a former leader of the European Parliament, is expected to take over.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Growing profile of defense

The CDU’s Ursula von der Leyen, a key ally of Merkel who is thought to have her own ambitions to become chancellor, is likely to remain in her role at the helm of the Defense Ministry. The ministry has had a growing importance in recent decades as Germany became more involved in foreign military operations. In particular, the Bundeswehr maintains a significant deployment of troops in Afghanistan.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Justice unlikely to change hands

Typically a portfolio that goes to the junior coalition partner, responsibility for the Justice Ministry may well stay with the current incumbent — the SPD’s Heiko Maas. While individual states in Germany are generally responsible for the administration of justice, the federal ministry is charged with making and changing constitution-related laws. It also analyzes laws made by other ministries.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Economic compensation

Helping to make up for the CDU losing two major offices, the CDU will get its hands on the Economy Ministry, also responsible for energy policy. Merkel’s right hand in the chancellery Peter Altmaier (pictured) — who has also been running the Finance Ministry since the departure of Wolfgang Schäuble — is expected to take over from the SPD’s Brigitte Zypries.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries New girl on the block

The favorite to take over at the top of the Ministry of Agriculture is the CDU’s Julia Klöckner, who leads the party in the western state of Rhineland Palatinate. Having twice failed in her bid to become state premier there, She’ll be one of the relatively rare new faces in Berlin.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Change of track

The CSU will also retain the Transport Ministry with CSU Secretary-General Andreas Scheuer, from Lower Bavaria, taking charge. He’d also be responsible for digital infrastructure. The party will hold onto the Federal Ministry for Economic Cooperation and Development, with undersecretary in the Transport Ministry Dorothee Bär set to take the reins from current Development Minister Gerd Müller.

Merkel’s cabinet takes shape – who’s in and out at Germany’s ministries Health in same party hands

The Health Ministry remains a CDU concern, with Annette Widmann-Mauz, an undersecretary in the ministry from Baden Württemberg, expected to take over. She’d replace fellow CDU member Hermann Gröhe, who is touted to head up the Federal Ministry for Education and Research.

Author: Richard Connor

Parliamentary group leader Andrea Nahles is expected to take over the role of SPD leader if party members approve the coalition agreement and Schulz becomes foreign minister.

New finance minister

Government spending is expected to increase for education and infrastructure in Germany, supervised by the likely new Finance Minister Olaf Scholz, the current mayor of the northern port city of Hamburg. This was a key appointment after years of strict spending controls under former finance chief Wolfgang Schäuble although Berenberg Bank analyst Florian Hense commented on Scholz: “He is a realist… within the SPD, probably the closest to ex-finance minister Schäuble.” 

Wolfgang Schäuble and Olaf Scholz in Hamburg in 2014

However, Commerzbank chief economist Jörg Krämer said: “Do not underestimate the impact of the SPD getting the influential Finance Ministry.”

“This marks a huge change from the policy of Wolfgang Schäuble regarding European integration, transfer of risks toward the peripheral countries,” Krämer said.

Merkel admitted the significance of the change: “After so many years in which Wolfgang Schäuble held the Finance Ministry, himself becoming an institution, it was hard for many of us that we couldn’t hold on to that ministry,” Merkel said on Wednesday.

Spending of €46 billion ($58 billion) over the next four years to increase investments and reduce taxes would be a key change in policy. 

In January, International Monetary Fund director Christine Lagarde had said “Germany can afford to spend and invest more.”

jm/sms (Reuters, dpa, AFP)

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