News | Economic / Social Policy - Political Parties / Election Analyses - Europe New Problems for Germany’s New Government

One year into the so-called “traffic-light coalition”, its biggest success might be that it’s still standing


Federal Chancellor Olaf Scholz and cabinet members Christian Lindner, Robert Habeck, and Annalena Baerbock take a group photo during a meeting of the federal cabinet, 30 August 2022. Photo: IMAGO/Frank Ossenbrink

Expectations were high when the new German government took office one year ago today, on 8 December 2021. After 16 years of Angela Merkel, newly elected Chancellor Olaf Scholz from the Social Democratic Party (SPD) promised a new beginning. The governing coalition consisting of Social Democrats, Greens, and the Free Democrats (FDP) — known as a “traffic-light coalition”, in reference to the partners’ respective colours — would modernize the country and usher in a more social, ecological, and liberal future.

Albert Scharenberg is a historian, political scientist, and international politics editor at the Rosa Luxemburg Foundation.

Translated by Loren Balhorn.

Twelve months later, little of that hopeful optimism remains. This is due, on the one hand, to continually resurfacing conflicts within the coalition itself, causing it to water down many of its reform initiatives or even abandon them entirely. The coalition that once urged the country to “dare more progress” now risks failing to live up to its own expectations.

At the same time, reality has a habit of overtaking the government’s plans. The Russian attack on Ukraine, the insecure energy supply, inflation levels nearing 10 percent, and the resulting accumulation of economic and social disruptions have caused a number of unanticipated problems. That said, the worsening climate crisis — the seriousness of which the government has yet to grasp, at least according to the climate movement — could have been expected.

A Few Positive Steps

It would be unfair to claim that the new government hasn’t accomplished anything at all. It passed several noteworthy reforms in its first few weeks, including the gradual raising of the minimum wage to 12 euro per hour, a phasing out of coal power by 2030, and an accelerated expansion of renewables. Although these reforms may have been insufficient, as the opposition party Die Linke argued, they nevertheless represented small steps in the right direction.

In other areas, government policies headed in the wrong direction from the start — even if the coalition agreement stipulated otherwise. Alongside the challenges posed by the war in Ukraine, this discrepancy is primarily due to the heterogeneity of the coalition partners themselves. While the SPD and the Greens are (all contradictions aside) ultimately part of the centre-left spectrum, the FDP is traditionally a neoliberal party of business, and has favoured working with the Christian Democrats (CDU) for years.

At this point, many voters view the FDP as little more than the party of political obstruction.

Indeed, the Free Democrats only joined the current government to prevent a continuation of the so-called “Merkel coalition” between the CDU, its Bavarian sister party, the CSU, and the SPD. The reality that the governing parties belong two different political camps makes developing a shared perspective, along with the implementation of already agreed upon decisions, considerably more difficult.

Foot-Dragging in the FDP

As the smallest of the three coalition partners, the FDP stands out mostly for what it manages to prevent. In order to maintain the support of its right-leaning liberal base, party leader and Federal Minister of Finance Christian Lindner has fought every possible tax hike tooth-and-nail. It’s for that reason that the German parliament, the Bundestag, has yet to introduce a windfall profits tax on energy companies benefitting from the energy crisis — unlike Spain, Belgium, or the even the UK. The wealth tax called for by Die Linke, which would only impact rich Germans, is being blocked in the same manner.

At the same time, Lindner and his party continue to insist on maintaining the so-called “debt brake” anchored in Germany’s constitution, the Basic Law, which stipulates that the government cannot spend more money than it earns in tax revenues. But such a policy is economically and socially reckless during a crisis — and, moreover, does not even apply in this case, as the new government already agreed to take out fresh loans worth 300 billion euro — the so-called “special fund” — with 100 billion going to the military and 200 billion to fund a cap on gas prices.

At this point, many voters view the FDP as little more than the party of political obstruction — an image that has cost it dearly in the polls. While the Free Democrats managed to secure 11.5 percent of the vote in the September 2021 elections, the party is currently polling around five percent, which places it at risk of falling below the threshold to re-enter parliament in 2025. This contradiction represents the ruling coalition’s core dilemma: scared of losing even more support among its base, the FDP obstructs government projects — as a result of which, however, it simply loses even more support. A vicious cycle indeed.

The CDU Mounts a Comeback

The support bleeding away from the FDP has appeared to largely benefit the conservative CDU/CSU, which, according to the most recent polls, is now at 30 percent. The party profits, on the one hand, from the lack of agreement within the coalition and the political blockages resulting from it. On the other hand, it can use its influence in the Bundesrat, the second chamber of parliament that represents the 16 German states, to wring concessions from the government.

The Christian Democrats succeeded in doing precisely that in recent weeks over the planned reforms to the welfare system. The introduction of a so-called “citizen’s income” was to soften the harsh edges of the previous welfare reforms of the early 2000s, specifically by decoupling welfare from sanctions that placed enormous pressure on the long-term unemployed to take any job available. The government also planned to increase the amount of savings welfare recipients would be allowed to keep.

But the CDU and CSU used their blocking minority in the Bundesrat to torpedo the reform, attaching their support to two conditions: namely, reintroducing sanctions on welfare recipients, and cutting the amount of savings recipients would be allowed to keep. The Christian Democrats won, and the reforms that were ultimately passed conformed to their expectations.

A similar scenario is now shaping up with regard to the overdue relaxation of citizenship laws for foreign residents. That this issue sparks controversy among the democratic parties given Germany’s dire shortage of skilled workers is largely due to the new CDU leader, Friedrich Merz, who has made headlines in recent months with statements against immigration, including that of Ukrainian refugees. Overall, the conservative rival of former chancellor Angela Merkel has led his party noticeably to the right, but it does not seem to be helping him reach his declared goal of winning back supporters of the far-right Alternative für Deutschland (AfD).

Governing in Crisis Mode

For all these reasons, the German government has struggled not only to agree on political reforms, but also to implement them. Another example is the legalization of cannabis, one of the goals agreed upon in the government’s coalition agreement. Despite all three governing parties paying lip service to the move, nothing has happened in this regard in the first year of the coalition.

Other goals also appear at risk. The coalition’s establishment of a Ministry for Housing, Urban Development and Building was intended to signal that it would make the issue a priority (which, given the massive rise in rent costs in recent years, seems wise). Yet the plan to construct 400,000 new units annually has failed to materialize, not least due to the rapid rise in building materials costs. This also means that the tension on the housing market will continue to increase — bad news in the only EU country where the majority of residents are renters.

After winning 10.3 percent in the last general election, the Alternative für Deutschland has managed to rise to 15 percent in the polls, despite its many internal quarrels and scandals.

Bearing that in mind, one could make the case that the government’s most impressive achievement has been its response to the overlapping crises confronting it. After all, there have been no large protests, let alone unrest, in the year since it took office. That by all means constitutes a political success, for the government has passed several so-called “relief packages” that brought palpable financial relief to the population.

When gas prices again began to tick upwards, the government responded with the aforementioned “special fund” of 200 billion euro. Although these support measures were fundamentally correct, the amount of money involved shows that the current approach to the crisis is not only buying social peace, but is also financially quite burdensome. The government’s decision to include as many citizens as possible in the package, even if the policy ends up costing more, goes to the heart of the Federal Republic’s so-called “consensus democracy”.

Fire from the Right

Standing outside of this social consensus is the far-right AfD, which remains split between an authoritarian, neoliberal current and a more or less openly fascist wing. After winning 10.3 percent in the last general election, the party has managed to rise to 15 percent in the polls, despite its many internal quarrels and scandals. In fact, it currently leads the polls in four of the five states in eastern Germany.

The reasons for this trajectory can be located, on the one hand, in its adoption of American-style “culture wars”, which in Germany currently tend to revolve around the questions of immigration and gender. There are certain discursive overlaps between the AfD, conservatives, and right-leaning liberals in these areas, which works against the party’s political isolation.

At the same time, the AfD has successfully linked up with widespread criticisms of the German government’s sanctions against Russia — especially in the eastern states. Economic ties to Russia are traditionally stronger in eastern Germany, and in many areas, small- and medium-sized businesses have been mobilizing to protests against the sanctions. That the AfD rails against support for Ukraine and frequently sides with Russia gives it a unique political selling point, which has also contributed to its rising poll numbers.

Languor on the Left

The socialist party in the opposition, Die Linke, also counts its traditional strongholds in the eastern states. Yet unlike the AfD, it declared its opposition to the Russian invasion at its party congress in June, and expressed support for the government’s sanctions.

Die Linke welcomed the government’s relief packages in principle, but criticized them for being insufficient. The party’s attempt to launch mass protests against the policy later that autumn, however, failed. Although many Germans are unsatisfied with the rapid growth of social inequality, this negative motivation has proven insufficient to galvanize significant street protests. Instead, retreating into individual solutions is widespread.

This does not make the situation any easier for the party that barely managed to re-enter parliament last year, especially given its ongoing internal fights. On the contrary: the divide between reformers and the so-called “Movement Left” on the one hand, and the “left-conservative” forces around the party’s ex-parliamentary speaker Sahra Wagenknecht on the other has grown even deeper. After the former managed to win clear majorities in all questions at the last congress and exclude Wagenknecht’s supporters from the party executive, some have begun openly speculating about founding a new party in time for the 2024 European elections. This shows that 15 years after its successful founding, Die Linke’s parliamentary survival is in danger.

Yet not all is lost. Although Die Linke hovers at around 5 percent in the polls, a recent study placed its overall electoral potential at up to 18 percent. Moreover, the party is still part of four state governments and even claims the Minister-President in Thuringia. Thus, at least for now, it remains a real political factor. Should Die Linke succeed in consolidating its successes in state and local governments while at the same time channelling principled opposition to the federal government in parliament and on the streets, it may yet manage to turn its fortunes around.