Berlin Bulletin: Coalition in crisis — Tough times for Habeck — Jewish youth boos Green minister
A weekly newsletter on German politics, with news and analysis on the policies and people that shape the post-Merkel era. The Berlin Bulletin looks at the current state of crisis in the German government, with inflation running high and consumer spending falling through the floor. The report also highlights the mounting woes of the ruling coalition, with a draft heating law championed by Economy Minister and Vice Chancellor Robert Habeck, a Green, which requires that all new heating systems draw at least 65 percent of their energy from renewable sources beginning next year. The pending death of the trusty gas-fired boiler has put the Greens up in arms, with Finance Minister Christian Lindner of the right-leaning Free Democrats (FDP) facing a uphill battle to get the law over the finish line by the summer recess. Chancellor Olaf Scholz has remained on the sidelines as his two junior partners duke it out.
Published : 2 weeks ago by Matthew Karnitschnig in
A weekly newsletter on German politics, with news and analysis on the new government.
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ENGINE TROUBLE: The EU’s vaunted economic motor is sputtering. With inflation running high and Germans nervous about the future, consumer spending has fallen through the floor, tipping the economy into recession. The German economy contracted by 0.3 percent in the first quarter, marking the second consecutive drop. Though the contraction is mild so far, the report only adds to the mounting woes of the ruling coalition.
BROKEN ‘TRAFFIC LIGHT’: Considering the scale of challenges facing Germany today (Russia’s war on Ukraine, a tanking economy, a resurgence in asylum seekers) it might come as a surprise that leaders of the country’s unwieldy three-way “traffic light” coalition would find themselves in an existential quarrel about something as pedestrian as the future of the household boiler. Yet here they are …
Boiling point: A draft heating law, championed by Economy Minister and Vice Chancellor Robert Habeck, a Green, proscribes that all new heating systems draw at least 65 percent of their energy from renewable sources beginning next year. While the draft, aimed at ensuring Germany meets its climate targets, includes hardship provisions, grace periods and other exceptions, the pending death of the trusty gas-fired boiler has Germans up in arms.
Hot under the collar: About half the country relies on gas for heating and transitioning to eco-friendlier alternatives, such as electric heat pumps, is both arduous and expensive. The Greens have called for generous subsidies to cover up to 80 percent of the price of a new heater to accelerate the shift, but given that a heat pump for a single-family home can cost up to €25,000, including installation, many are skeptical the government, already facing a massive budget shortfall, can afford anything on that scale. Eighty percent of Germans oppose the pending law, according to one recent poll.
Making the Greens sweat: The main obstacle to Habeck’s Green heating dream is Finance Minister Christian Lindner of the penny-pinching, right-leaning Free Democrats (FDP). Lindner, after initially signaling his party would support the measure, appears to have had second thoughts after seeing the popular reaction to it. Coalition life with two center-left parties — the Social Democrats and Greens — has been unkind to the FDP, which has fared poorly in four recent regional elections and has dipped dangerously close to the 5 percent threshold for entry into parliament. The party is demanding substantial changes to the draft and is refusing to put the measure on the parliamentary agenda until Habeck answers a catalog of 113 questions it sent him on Thursday. The tactic will make it difficult for the Greens to get the law over the finish line by the summer recess, which begins July 7, as they had hoped. Without naming Lindner, a furious Habeck accused the FDP of “breaking its word.” My Berlin colleagues Hans von der Burchard and Gabriel Rinaldi have the full report here.
When it rains it pours: The heating debacle isn’t the only millstone around Habeck’s neck. The recent cronyism scandal surrounding his right-hand man — Deputy Minister Patrick Graichen — came to a head last week with Habeck finally bowing to pressure and giving his friend the axe after refusing for weeks to do so. Meanwhile, the charismatic Green minister, who just months ago was considered a strong contender for chancellor after the next election, has gone from the top of the approval ratings pyramid to the bottom.
Where’s Olaf? Chancellor Olaf Scholz has so far remained on the sidelines as his two junior partners duke it out. Scholz is no doubt pleased to see the reversal in Habeck’s fortunes, but in the end, the dysfunction in his government isn’t good for anyone.
On Thursday, Scholz said that he had asked his coalition partners “very urgently” to resolve the dispute over the heating law “within the next few weeks.”
Sign of the times: Not even Scholz’s protection detail seems to be functioning at the moment. In a bizarre episode Wednesday evening, a man snuck into Scholz’s motorcade at the Frankfurt airport. As Scholz left his limousine to board his plane, the man rushed towards the chancellor and embraced him, as Scholz’s bodyguards stood by and watched. Scholz was unharmed, but still …
Bottom line: The German coalition is in disarray. The heating law, a pillar of the government’s environmental agenda, is on life support. The FDP, fearing it will lose more support if it endorses the agenda, is now Germany’s most significant opposition party. And the chancellor is nowhere to be seen. Whether the coalition will hold together for another two years amid the current acrimony is anyone’s guess.
STICKY ISSUE: Granted, Germans aren’t known for their patience. Even so, who would not lose their shit in the face of the glue-wielding climate activists who have been cementing themselves to roadways and blocking traffic for hours on end around the country? (Yes, we speak from personal experience.)
Hands up! The protesters insist their motives are noble and necessary to save the planet (the latter point is debatable, given that Germany is responsible for only about 2 percent of global carbon emissions).
The standoff between the activists and the law took a dramatic turn on Tuesday as police raided 15 homes and offices across Germany, collecting evidence. No one’s been arrested so far, but authorities said they believe the group’s leaders have created a criminal organization. Police shut down the group’s website and seized its bank account, in which it holds more than €1 million in donations.
Shock and awe: Carla Hinrichs, one of the leaders of the group, expressed shock that the police would barge into her Berlin apartment and pull her out of bed, unannounced.
“Suddenly a policeman is standing next to your bed with a bulletproof vest on and is pointing a gun at you,” she said in a video posted on Twitter.
DO THE GREENS HAVE AN ANTISEMITISM PROBLEM? Germany’s Jewish youth seems to think so. Green Culture Minister Claudia Roth, a former party leader, was booed from the stage by a crowd of more than 1,000 at last week’s “Jewrovision” contest in Frankfurt, an annual song and dance competition for young Jews. The protest was the result of “pent up frustration” over Roth’s handling of the community, the Germany’s Jewish Central Council said in a statement.
Swinging ’60s: Given that the Greens grew out of the leftist student protest movement in the 1960s, it’s not surprising that some of the party’s older guard harbors what might charitably be called an ambivalent view towards Israel. That doesn’t make them antisemites, of course, but for a generation that lionized the likes of Yasser Arafat and championed the Palestinians, the subject of Israel has long been an awkward one.
Those tensions resurfaced last year amid an uproar over documenta, a prominent contemporary art exhibition that takes place in the German city of Kassel every five years. Long before the exhibition opened, Jewish groups in Germany and elsewhere implored the Green-led culture ministry not to include the group. They were ignored. Only after the collective unveiled a large mural featuring antisemitic depictions did Roth relent.
Pent-up anger: Roth’s stubborn stance on documenta followed her refusal to support a 2019 parliamentary resolution declaring the anti-Israel BDS movement antisemitic, a move that also angered many in the Jewish community (the measure passed anyway). She also drew fire for visiting with a Holocaust denier in Iran while vice president of the Bundestag.
Reputational harm: Point is, the reputation of one of the Green’s most high-profile ministers in the Jewish community is in tatters. Jüdische Allgemeine, Germany’s largest Jewish newspaper, demanded her resignation after the documenta flap and more calls came over the past week.
Instead of dealing with the issue straight on, however, Green leaders opted to confirm their critics suspicions by insinuating the whole affair was carefully choreographed to undermine Roth.
IS WAGNER A TERRORIST ORGANIZATION? While Germany’s main opposition party wants the Bundestag to label the Russian Wagner Group as a terrorist organization, the other parties are more hesitant. The CDU/CSU group brought in a motion on Thursday evening, asserting that Wagner has been a crucial part of Russian President Vladimir Putin’s power apparatus since its involvement in the illegal annexation of Crimea in 2014.
State-supported terrorism? As the draft states, the group is accused of committing “systematic acts of terrorism and crimes against humanity,” particularly in Ukraine, Syria, and various African countries. It highlights that Wagner is alleged to have been involved in major massacres — including the Bucha Massacre and the Moura Massacre in Mali. The document emphasizes that the Wagner Group is not a mere mercenary group but a state-supported terrorist organization, noting that the group has been subject to increased international sanctions.
Calling on Scholz and the EU: The draft concludes by calling on the Bundestag to label the Wagner Group a terrorist organization, following the lead of the European Parliament and parliaments in Lithuania and France (more here). It also implores the German government to take several actions, including advocating for the EU to list Wagner as a terrorist organization, assisting in gathering legal evidence for this listing — and supporting investigations into the group’s war crimes.
Opposition asks for more leadership: “The EU needs to respond to this and place Wagner on its terror list. This is where they belong, right next to actors like the Hizbollah and Hamas,” the CDU’s Katja Leikert told Berlin Bulletin. “It’s a shame that the German government coalition refused to back this goal in parliament yesterday. This isn’t the leadership that is expected from our country.”
No legal possibility: Instead of voting for the motion, the governing majority referred it to the foreign affairs committee for further discussion. As the SPD’s Ralf Stegner told the CDU/CSU during the debate, “there is much that is correct about your motion. … But what your motion undercuts is that the German government has a clear position. Decisive are EU regulations, are legal requirements that regulate the EU listing.” His FDP colleague Ulrich Lechte said, “there is simply no legal possibility at present to carry out the terror listing of the Wagner Group … [and] the mere listing … on the EU terror list would have no practical effect whatsoever.”
Next steps: “We still hope that we can convince the government to come around on this. Perhaps progress in the British case against the Wagner Group will serve as an impetus,” Leikert said. As the Times reported, the U.K. has been working to place Wagner on the British terror list — a move that is expected to take place in the coming weeks.
GERMAN RECESSION TAKES: When it comes to the tense economic situation, commentators have different interpretations and opinions:
It could be worse: “Because of the drop in consumer spending, Germany is now in a recession, or more precisely, a technical recession, as economists call it, when the economy shrinks for the second time in a row. Without question, this is bitter,” writes Corinna Clara Röttker in the Neue Osnabrücker Zeitung. “But before the hour of the doomsayers strikes: a recession in the true sense means a cooling of the economy, in which companies are not working to capacity, employees are sent on short-time work, unemployment rises, goods no longer find buyers and prices stagnate or fall. None of this fits in with the current situation in Germany.”
Low-income earners suffer particularly: “Many Germans have become poorer over the past year and a half. Inflation has eaten away at their purchasing power, and wages and pensions have grown less than prices in the vast majority of cases,” writes Andreas Niesmann of Redaktionsnetzwerk Deutschland. “Even if these are now easing again in some areas, that changes little in the overall findings. What makes this crisis dramatic and politically sensitive is the fact that low-income earners are suffering particularly from its consequences. The main price drivers in recent months have been those goods that are part of people’s basic needs.”
Lindner ‘is creating crisis mood’: “Anyone who conjures up a crisis contributes to it coming. That’s why it’s fatal that FDP Finance Minister Christian Lindner is using the rather technical recession as an opportunity to call for a ‘turnaround in economic policy,’ as he did in security policy after the attack on Ukraine,” writes Anja Krüger in the left-leaning taz paper. “The FDP leader is creating a crisis mood, which he apparently wants to use to serve his supporters, for example, with tax cuts or better investment conditions. But instead of gifts for the rich, effective measures are needed for those with little money. Inflation and, above all, high energy prices are putting many in a tight spot.”
Germans keep their money together: Johannes Pennekamp of the Frankfurter Allgemeine Zeitung claims that “Germany has a real problem economically that you can’t muddle through.” There will be no strong upswing in the summer and fall either, he adds. “Because sandwiches now cost more than €3 and other prices are shooting through the roof, Germans are holding on to their money. Declining consumption is slowing down the economy. At the same time, rising interest rates are eating into growth hopes.”
STREET FESTIVAL: This weekend, the Carnival of Cultures will again take place in Berlin’s multicultural Kreuzberg neighborhood. The four-day festival is “a joyful statement for an open and intercultural society,” the organizers say. It’s also very crowded!
RESPONSIBLE MINING: The development ministry hosts a forum on mineral supply chains on Thursday at the ministry in Berlin. The event “addresses the geopolitical, social, environmental and governance dimensions of mineral supply chains and highlights the commitment of German Development Cooperation to responsible mining worldwide,” according to its website. German development minister Svenja Schulze, a Social Democrat, will hold a keynote. The event will be livestreamed.
SUSTAINABLE COMMUNICATION: On Thursday and Friday, the MOVE sustainability communications conference will take place. As the conference writes, visitors will get answers to their most pressing questions, discuss current legal regulations and best practices, and learn how to communicate sustainability strategically, internally and externally. Corporations, SMEs, NGOs and representatives from politics and academia will meet at the Quadriga Forum.
PARTICIPATION FORMATS: “Citizens’ councils or lot-based participation formats are increasingly establishing themselves as a desirable and successful democratic innovation,” writes the think tank Es geht LOS (“It’s getting started”). What are the opportunities and limits of lot-based participation formats? The Berlin-based think tank will summarize its findings on the topic on Friday, at 10 a.m. and provide an outlook. Registration is possible here.
OVER AND OUT
AUF WIEDERSEHEN: Tomorrow is the last match day of the current Bundesliga season. For Berlin’s Hertha BSC, it will be a long goodbye. While cross-city rival Union Berlin could play in the prestigious Champions League next season, the self-proclaimed big city club Hertha will be relegated after 10 years in the top league despite substantial investment. What led to the fiasco?
Financial issues: Four years after a €374 million injection by investor Lars Windhorst, it is a shambles both on and off the field. The club is effectively broke and might not even have enough money to save its league license. It’s currently trying to renegotiate the terms of a €40 million loan so it can remain in operation.
New investor, new problems? Complicating matters, the German league DFL has expressed concerns about Hertha’s new majority investor, 777 Partners, who purchased Windhorst’s 64.7 percent stake in the club in March. Despite the club retaining control by holding 51 percent of the voting shares in accordance with German rules, DFL fears that 777 Partners, which also owns significant stakes in other clubs around the world, may wield considerable influence over club decisions that could violate the rule book.
The clock is ticking: In sporting terms, things have not been going well for the Berlin club for years, either. The players, some of whom were bought in for a lot of money, did not perform as expected. So far this season, the club has suffered 19 defeats, which means last place — and premature relegation on the penultimate match day. If the “old lady,” as Hertha is known, fails to meet the financial conditions, the team faces the threat of falling all the way down to the fourth division, known as the Regionalliga Nordost. Hertha has until June 7 to prove to the German football league that it can finance the upcoming season.
THANK YOU: To my editor Jones Hayden and producer Ellen Boonen.
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