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November 11, 2019

Grand coalition agrees to continue grand coalition

You can always tell when a political body becomes dysfunctional: they start kicking the can down the road. This is what the European Council or Germany's grand coalition have in common. But one should not underestimate those bodies in terms of their ability to reach compromise. We never bet against the European Council finding a last-minute agreement. They are rather good at this. And so is the grand coalition. They had a big political disagreement over a minimum guaranteed pension, and yesterday they reached a compromise. The reason is pure self-preservation. Neither party is ready for the coalition's end, which would have happened if this deal had not been reached.

Annegret Kramp-Karrenbauer is carefully plotting an alternative post-Merkel agenda for her party, but she does not have enough support at this stage. She is among the lowest-ranked German politicians. The compromise will help the likes of Olaf Scholz and Heiko Maas to hang on their ministerial jobs for a little longer, and will boost the chance of Scholz and his co-candidates in the upcoming SPD leadership election. For the party's ageing membership, the minimum pension is a big deal. It might be what swings the vote. We reported on a poll in which the Scholz team was trailing but that poll is already a few weeks old - and the SPD's entire establishment is behind Scholz. We would not bet against him, but we don't think he will arrest the decline of his party.

The compromise reached by the coalition is to limit the minimum pension to those who made 35 years of contributions to the pension scheme. There will be no generalised means testing as the CDU/CSU previously demand, only a simple income test - done through a data exchange between the tax office and the social security office. There are several other components of this deal, but it is no doubt a big win for the SPD. 

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November 11, 2019

Can Greens and conservatives agree on priorities?

An alliance between conservatives and green parties is already a reality in local and regional constituencies but not yet at national level in Europe. This could change soon. Negotiations are most promising in Austria where the ÖVP is concentrating its efforts on finding a basis for a coalition with the greens. Greens could also come to power in Belgium, currently seen as the alternative in the complicated regional poker to get a federal government going without the far-right N-VA, or if those negotiations fail after new elections. 

The Greens will come to the negotiation table with a strong bargaining position. Greens are the vote winners these days and without them it may be difficult for governments to achieve the emission targets under the Paris agreement. 

But a coalition agreement also brings to light the difficulties in finding a new balance between green policies and industrial interests. Industry, infrastructure and production location are one of the central concerns of conservative parties - and some of their major donors come from industry. The Greens want a reorientation towards green priorities but are equally not interested in relocating operations or expanding abroad. 

How will politics combine environmental and location interests? The Austrian greens are for stricter rules in noise and climate protection or land use. The ÖVP pursued the opposite direction in the past, writes Der Standard. There has been some deterioration during the last legislative period according to environmental impact assessment studies. Worse is the law that allows a fast track approval of vast industrial projects. The greens want to revoke this law and got backing from Brussels. Can the ÖVP sell this to its constituencies? Some observers consider the obstacles too big for a coalition between the two parties to fly. But regions like Vorarlberg have demonstrated that these differences can also be overcome in a dialogue with industry, science and society. 

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November 11, 2019

Germany - self-content and without energy

Philip Graham ingeniously described journalism as the first rough draft of history. We think journalists should leave the rest to historians. Most of what we ready about the Berlin wall, and other remembrances over the weekend, were drivel. This is why we ignore anniversaries except as occasions to reflect on the present.

The German political scientist Joseph Janning did just that and made a prescient observation about the state of Germany and the state of Europe, the conclusion of which we believe is worth quoting in full:

"I confess to feeling tired this November 2019... The escapism into our past, Germany’s unwillingness to take the common European destiny into our own hands – it is all wearing me down. The country’s missing sense of purpose diminishes the power potential that it has. Berlin has turned punching below one’s weight into an art form. This pleases those outside the country who do not wish to see Germany shaping Europe, and it pleases those inside the country who would rather not make the effort. At a juncture in world politics that may yet turn out to be a tipping point for European integration, this overweight, unenergetic Germany is contemplating its historical navel and has become a burden to Europe – but one Europeans are unable to move forward without."

We would add that this is what reformers like Emmanuel Macron are up against. We think that Macron did not see any of that when he took office, having been blinded by his pro-German entourage. There are signs that this may be changing. In our view, it would require a very different style of diplomacy to make a dent.

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