Germany faces incredible headwinds in a post-COVID world. Whichever party wins September’s federal election will be responsible for helping to reinvent Europe’s economic powerhouse.
The economic powerhouse has an industrial export model that is at risk of becoming obsolete.
On Tuesday, a new Forsa/RTL/n-tv opinion poll showed Germany’s Green Party had taken a seven-point lead over Chancellor Angela Merkel’s conservatives. If sustained, could see the Greens seize power from the center-right CDU/CSU alliance.
The surge in popularity has caused many to question whether a party that has traditionally championed a single cause, the environment, can be pragmatic enough to rebuild Germany’s economic base.
DW unpicks what the Greens have pledged in their 137-page economic policy paper, published last month.
The Green Party says it will revise Germany’s so-called debt break. This is enshrined in the Basic Law and prevents governments from taking on too much new debt.
Although Merkel’s administration has broken these rules to cover COVID-19-related costs, it has committed to return to a balanced budget by 2022.
On the other hand, the Greens say the current low-interest environment is too good an opportunity to miss.
New and cheap loans will allow a far bigger investment in the green economy.
So the party has pledged to spend €500 billion ($600 billion) over the next decade on the “socio-ecological transformation” of the economy. And it will need it.
Two of Germany’s biggest export markets — the United States and China — may not be such willing customers in the future.
China is becoming increasingly self-reliant. Meanwhile, the US appears set on maintaining the protectionist policies enacted under former President Donald Trump.
The Greens’ spending plans should help deal with the unprecedented headwinds caused by the transition to electromobility. This will dramatically increase automation in vehicle production and could see up to 400,000 jobs lost in Germany alone over the next decade.
The Greens have promised that new jobs will be created through the energy and digital transitions. Simultaneously, a wealth tax and a 50% boost to welfare payments will help bridge inequality.
New venture capital funds will be created to promote research and development and support innovative startups. This is according to the economic policy paper.
But some analysts have cautioned that the Greens’ mammoth spending plans will make German exports even less competitive.
While many of its ideological positions — such as its opposition to the Nord Stream 2 gas pipeline — will set Germany up for fresh confrontation with Russian President Vladimir Putin.
As you’d expect, the Greens want Germany to make a more ambitious commitment to tackling climate change. And it will seek to cut CO2 emissions by 70% instead of 55% by 2030.
That will mean the carbon tax, introduced in January, will more than double by 2023. This is likely to hit businesses and drivers hard.
The party has also pledged to step up investments in renewable energy, not just in the electricity sector, while promising that low-income earners will see their utility bills reduced.
By 2030, a Greens government has pledged to allow only emission-free vehicles to be registered. They will aim for short-haul flights to become superfluous.
Instead, the party will seek to expand rail traffic significantly and promote more environmentally-friendly tourism.