The Grand Coalition’s Mid-term Review and Recent Legislation

Eric Langenbacher

Senior Fellow; Director, Society, Culture & Politics Program

Dr. Eric Langenbacher is a Senior Fellow and Director of the Society, Culture & Politics Program at AICGS.

Dr. Langenbacher studied in Canada before completing his PhD in Georgetown University’s Government Department in 2002. His research interests include collective memory, political culture, and electoral politics in Germany and Europe. Recent publications include the edited volumes Twilight of the Merkel Era: Power and Politics in Germany after the 2017 Bundestag Election (2019), The Merkel Republic: The 2013 Bundestag Election and its Consequences (2015), Dynamics of Memory and Identity in Contemporary Europe (co-edited with Ruth Wittlinger and Bill Niven, 2013), Power and the Past: Collective Memory and International Relations (co-edited with Yossi Shain, 2010), and From the Bonn to the Berlin Republic: Germany at the Twentieth Anniversary of Unification (co-edited with Jeffrey J. Anderson, 2010). With David Conradt, he is also the author of The German Polity, 10th and 11th edition (2013, 2017).

Dr. Langenbacher remains affiliated with Georgetown University as Teaching Professor and Director of the Honors Program in the Department of Government. He has also taught at George Washington University, Washington College, The University of Navarre, and the Universidad Nacional de General San Martin in Buenos Aires, Argentina, and has given talks across the world. He was selected Faculty Member of the Year by the School of Foreign Service in 2009 and was awarded a Fulbright grant in 1999-2000 and the Hopper Memorial Fellowship at Georgetown in 2000-2001. Since 2005, he has also been Managing Editor of German Politics and Society, which is housed in Georgetown’s BMW Center for German and European Studies. Dr. Langenbacher has also planned and run dozens of short programs for groups from abroad, as well as for the U.S. Departments of State and Defense on a variety of topics pertaining to American and comparative politics, business, culture, and public policy.

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elangenbacher@aicgs.org

German politics has become much more unpredictable in recent years. There have been half a dozen instances when it seemed that the rather unloved grand coalition (GroKo) would break up or Chancellor Angela Merkel would be ousted. The SPD’s recent selection of coalition critics Saskia Esken und Norbert Walter-Borjans as leaders might finally prompt some kind of change. But, even if the government falls and new elections take place, it seems clear that the third grand coalition in fifteen years has a legislative record about which it can be proud and whose output compares quite favorably to legislatures in the UK, France, or the U.S.

The German Bundestag has passed a flurry of legislation over the last two months.

The German Bundestag has passed a flurry of legislation over the last two months. Obviously, work needed to be done before the extended Christmas and New Year’s break and the major parties’ annual meetings (Christian Democrats on November 22-23; Social Democrats on December 6-8, when the new leadership team will also be formalized). In addition, this year had even a little more urgency because of the mid-term review (Bestandsaufnahme) of the governing coalition.

To provide some background, after months of negotiations (the longest ever) following the September 2017 Bundestag election, as well as a failed attempt to form a “Jamaica” coalition (CDU/CSU, Greens, and FDP) the CDU/CSU and the SPD reluctantly agreed to form another grand coalition (after the 2005-2009 and 2013-2017 versions). The Social Democrats were especially hesitant because the party has been hemorrhaging voters and desired time in opposition to refocus and rebuild. The eventual coalition agreement was extensive and formally called for a mid-term review.

Many were worried that this mid-term check would unleash a political crisis with either Chancellor Merkel deciding to step down/being pushed out as chancellor or the SPD pulling out and likely triggering new elections.

Many were worried that this mid-term check would unleash a political crisis with either Chancellor Merkel deciding to step down/being pushed out as chancellor or the SPD pulling out and likely triggering new elections. This would be bad for the two Volksparteien as the Greens and AfD have been polling higher than their 2017 results and the coalition partners are both about 5 percent lower than their 2017 results. But, the SPD might think new elections are the only path forward to stop its electoral free fall as of late. Thus, there was great relief in many quarters that nothing happened and that the coalition would battle on for now.

The government issued a formal 80-page report assessing its performance over the first twenty months. This was a (un) surprisingly upbeat document. Merkel noted that two-thirds of what had been agreed upon has already been achieved. Malu Dreyer, interim SPD leader, emphasized that the results (Bilanz) of the grand coalition are better than its reputation.

Indeed, on the legislative front, several important things have been passed or initiated. First, in light of the worrying rise of measles cases worldwide, the government is now mandating that two measles vaccinations are required for school-aged children. Noncompliant parents can face up to €2500 in fines. Another widely reported change is a reduction in the taxes paid for tampons from the regular VAT rate of 19 percent to a likely 7 percent, the rate assessed for other “essential” items like most food, cut flowers, and books. Such tax reductions for feminine hygiene products have been a major goal for many policymakers—although Germany has not completely eliminated taxes on these items as in Ireland or Kenya, for example. The government will also likely ban gay conversion therapy for minors, and will criminalize “upskirting,” the taking of pictures under another person’s clothing without their consent.

Three other government decisions are also of great import. Not generating as many headlines, but still highly impactful, is a government plan to relieve debt pressures on city and local governments. Approximately half of the €35 billion in old debt that local governments hold will be transferred to a federal fund to be paid off in thirty years. It is hoped that state governments will take care of much of the rest. This debt has long hamstrung local authorities, which sometimes have to pay more in interest than they are bringing in with taxes. Local governments are responsible for much physical infrastructure and must also pay for certain social programs (Hartz IV and sustaining refugees). This new program will especially aid authorities in struggling western states like North Rhine-Westphalia and Saarland.

The grand coalition also passed potentially impactful climate legislation, which will help Germany meet its internationally-agreed goals to reduce CO2 emissions and combat climate change. Indeed, the country will not reach its commitment to reduce emissions 40 percent over 1990s levels by 2020 (it will achieve a 32 percent reduction). The complex package includes €54 billion in spending, subsidizing the purchase of electric cars or better insulating private properties. Tax breaks on train tickets and higher taxes on air flights should encourage people to use more environmentally friendly trains. There is also a domestic carbon pricing scheme, although critics think the price is too low to have a real impact. Although some of the provisions can be directly implemented, others that affect the states are being held up by opponents in the upper house, the Bundesrat. Many Greens want to re-open negotiations on some content, whereas others are concerned about onerous financial obligations being foisted onto the states.

Finally, there was the contentious issue of a basic pension—a disagreement that almost led to the government falling in late October/early November. Although the 2018 coalition agreement stated that there should be a basic pension increase of 10 percent beyond the basic level of the Hartz IV pension and that taking care of children and relatives should be counted as years worked, when the parties began intensive negotiations in fall 2019, the SPD pushed for more. For instance, they demanded an income threshold (rather than need) and did not want this to be tested or determined by the authorities. In the end, the compromise was an income test, although wealth is excluded from the determination. This should boost pensions for about 1.5 million people and will cost €1 to 1.5 billion.