Along comes Olaf – can he flash Germany’s red light?

As of this week, for the first time since Gwen Stefani topped the charts with Hello Girl, Germany is not run by a person named Angela.

Olaf Scholz – the pragmatic, robotic and determined leader of the center-left SPD party – now holds the reins of Europe’s largest economy.

But he also leads a three-party coalition, the first in Germany’s modern history, with the progressively climate-conscious Greens and the business-friendly tax hawks of the Free Democrats party. The coalition is known as the “traffic lights” because of the colors of its three members.

Here are some immediate and longer-term challenges for Scholz.

His first big test is COVID. Germany is currently in the throes of its worst surge since the start of the pandemic. Between the upcoming Christmas holidays and the uncertainty regarding the omicron variant, Scholz has his work cut out for him. So far, it has not announced any new company-wide lockdowns or restrictions. But with Germany’s vaccination rate of 70% now lagging behind the EU, he has adopted a broad vaccination mandate and wants to get 30 million shots by the end of the year.

Foreign policy: Russia on the first day. Scholz takes office as tensions around Ukraine rise again. He will have to quickly take a position vis-à-vis Moscow which satisfies German industries, which depend on Russian markets and energy, but which also reflects the opinion of the Greens, the Russian hawks who see the Kremlin as a threat to both for the climate and for democracy. . With Greens leader Annalena Baerbock as foreign minister, it will be a difficult balance to strike.

A critical near-term decision for Scholz is whether he is willing to include the suspension of the Russian Nord Stream 2 gas pipeline project as part of a German sanctions package designed to deter Russian aggression against Ukraine… at a time when gas prices are exorbitant. .

Go green without going into red. Scholz’s government has pledged a massive push on the climate front, promising to completely phase out coal by 2030, eight years earlier than originally planned, and to double the renewable share of electricity generation to 80% by here too.

These goals are practically existential for the Greens, but achieving them will require massive investment – ​​where will the money come from? Scholz has already pledged to reimpose constitutional debt limits, and Free Democrats, who control his Treasury Department, oppose raising taxes.

A bigger question: Can Scholz make the Social Democrats cool again? The victory of the SDP was something of a stunner for a party that seemed, only a few months ago, as if it were on the verge of extinction. Moreover, across Europe, traditional trade union parties have suffered in recent years.

Scholz now has a chance to prove that the mainstream European center-left has a fight, at a time when the right – in its centrist and populist versions – has defined the landscape over the past decade. Scholz believes the SPD can reconnect with working-class voters — and his coalition’s promise to raise Germany’s minimum wage for around 10 million people is an integral part of that.

About a third of EU member states are currently led by social democrats of one color or another. They will be watching to see if Scholz can use the bloc’s biggest economy as a showcase for authentic center-left after a long time in the desert.

The unknown unknown: the next crisis. Will it be immigration? A terrorist attack? A financial crisis? A political scandal? Scholz’s predecessor did not take over as crisis manager, but she certainly left as such. How the new German chancellor maintains his somewhat bizarre coalition under unforeseen pressures could prove decisive.

Comments are closed.