The climate, emissions and German transport policy: a look at the coalition contract

In the past years, German transport and mobility policy had to navigate a dangerous predicament. Its renowned Energiewende attracted global attention, but quite obviously wasn’t enough to reach the climate change goals that the country had pledged in the various international accords. To even have a remote chance of doing so, a Verkehrswende also has to come.

For anyone with even a remote understanding of the German economy, the problem is quite obvious. Any change to transport and mobility policy that would take away from the success of the automobile industry would shake the very foundation of Germany’s economy. And thus, for many observer German policy often seemed to have nothing but the interest of carmakers in mind.

In 2018, that just doesn’t suffice anymore. Volkswagen and others are rocked by scandals that saw them systematically cheating emission testing. Germany cities are facing the almost impossible challenge of conforming to European NO2 emission standards without making use of temporary bans on Diesel cars.

Amid all of this, mobility systems overall are facing foundational changes and individual car ownership could soon be a thing of the past. Public transport systems are improving as they embrace multi-modality. Uber and its competitors are disrupting individual transport services and both ride- and car-sharing platforms reduce the need to own a car even further.

But how is politics reacting to this? A few answers can be found in the coalition contract:

  • Governance

The new coalition wants to avoid harming anyone at any cost – be that the automobile industry, other stakeholders in the mobility sector or individual car owners. A commission shall be formed that is supposed to prepare a strategy for the “future of affordable and sustainable mobility”. Further, the coalition contract states that the coalition intends to “reach the climate goals of the Paris agreement while taking social aspects into consideration and securing both the competitiveness of our industry and affordable mobility.”

  •  Diesel cars and emissions

The coalition wants to avoid that cities have to make use of temporary bans on Diesel cars at all cost. Much rather, the goal is to reduce emissions at the source, meaning the cars themselves. While retrofitting Diesel cars with modern emission reducing technology is a theoretical option, the carmakers don’t want to bear the cost and nobody would dare to saddle the consumer with it.

Instead, the contract foresees states, regions and municipalities to be granted the right to regulate emission limits “for commercial transport services like busses, taxis, rental cars and car-sharing vehicles”, as well as for courier- and delivery vehicles.

  • E-Mobility & Autonomous Driving

Funding for the development for e-mobility is supposed to be increased, but the contract fails to mention any specific goals. A very particular focus is on company cars, that will see discounted tax rate for electro and hybrid models. Charging stations shall be increased in numbers to a total of 100,000 in 2020.

By the end of the legislative term, the government wants to create regulation to enable fully autonomous vehicles. Even faster, experimentation spaces shall be created for the industry to test those cars. This is supposed to go hand-in-hand with the creating of smart cities that possess intelligent car-park routing systems and a “digitalized road network”.

  • New forms of mobility

For companies that are disrupting the mobility sector, there is a twofold challenge. While there is much lip-service done on promoting car-sharing and alike services, the reality has been a bit bleek in the past. Car- and ride-sharing yet has to blow up as it did in other countries. Regulatory barriers quite often have played a role in this.

German personal transport law is supposed to be modernized to rectify this situation. Ride sharing and new platform-based mobility services are supposed to receive a legal foundation for the certification of their services, while maintaining a level playing field between different transport modes. Particularly taxi- and rental car services are supposed to be relieved of regulatory duties.

This is clearly aiming at clearing up the problems that Uber is facing but will certainly apply to other platforms as well.

A tale of two parties

The past weeks could not have shown the differences between Germany’s two dominant parties, the Christian Conservatives and the Social Democrats, any better. Both coming from a devastating loss in the September election, one stands united with secure leadership and personnel that could lead the party towards the future once the current leader leaves the picture. The other, in a very fragile situation already, has little leadership and is completely divided about its future course. The former, of course, is Angela Merkel’s CDU, while the latter are the Social Democrats that by Sunday will have made the decision whether to form a government with the CDU.

For the Social Democrats, either outcome could spell doom. The party essentially seems to be split over the idea of a repeat coalition. Over the past four elections, their voter share has halved, from 40.9 percent in 1998 to 20.5 percent in 2017. Particularly devastating was the 2009 election (23 percent), right after the first Grand Coalition under Angela Merkel as Chancellor. Yet, Merkel hardly seems to be the only reason for the continued downturn. Labour and economic policies introduced by SPD Chancellor Schröder (the infamous Hartz-Reforms) have led to a chasm on the left wing of the party that seem to have permanently exiled many former Social Democratic voters.

Now, it is on all members of the party to decide on whether to continue the past course or take a turn to the left. The party establishment would have loved to regroup in the opposition, but the failure of the so-called Jamaica coalition (CDU/CSU, Greens and Liberals) didn’t allow for this. In the coalition however, returning to a leftist course, seems to be impossible. Even though, according to AI analysis, the proposed coalition contract consists up mostly out of SPD policy positions and even though the SPD was granted three of the most important ministries (Finance, Labour, Foreign Affairs), the coalition would still operate firmly in the middle of the political spectrum. Apparently, not enough for the left wing of the SPD, which somewhat convincingly argue that the Social Democrats renew themselves in such a coalition.

This could tear apart the party for good. The party’s youth organization, behind its Chairman Kevin Kühnert, is campaigning against entering the coalition and the outcome of the inner-party referendum is a coin toss. The party leadership is firmly campaigning for a Grand Coalition and would certainly have to resign should the decision not be in their favour. That would mean that the SPD would have transitioned from the chairmanship of Sigmar Gabriel (currently Minister of Foreign Affairs) through Martin Schulz, who recently turned over the office to Andrea Nahles (former Minister of Labour) to an entirely new leadership, whomever that would be.

Contrastingly, the CDU is having little such problems. For a brief moment, it seemed as if Angela Merkel would have to worry about her immediate future.

Amidst the CDU’s own losses in the election, she managed to negotiate on two potential coalitions in her usual way, making little public noise and in more of a moderating role. In the instance of the Jamaica coalition, this failed entirely. In the second instance, she had to give up on many policy positions and also had to hand over the Ministry of Finance.

Expectedly, this riled up the conservative wing of the party. But much unlike the SPD, Merkel needed only a few moves to quell the unrest. The CDU’s youth organisation wanted a party convention to discuss the coalition contract – Merkel granted the wish. The conservative wing wanted representation in the would-be cabinet – Merkel axed her close confidante Hermann Gröhe (until now Minister for Healthcare) and gave the position to one of the young leaders of the conservative wing (Jens Spahn, 37). Making place for Horst Seehofer, Chairman of the Bavarian CSU and until now State Premier, is longtime Merkel ally and Minister for the Interior Thomas de Maizière.

Lastly, Merkel needed someone to take care of the party. The last few years saw losses among the party base, members who defected because they didn’t identify with Merkel’s political course. She knew she couldn’t fulfil the integratory role that the party needed. Hence, she pulled Annegret Kramp-Karrenbauer (otherwise known as AKK), until now State Premier in the Saar region, out of her hat. Technically, AKK (55 years old) isn’t really young. Technically, she isn’t a member of the Christian-conservative wing. Technically, she has been a close ally of the Chancellor for quite a while.

But yet, AKK is enough of an integratory figure that she can represent most of the party base. At the party convention last Monday, she gave a rousing speech that sparked hope that she might also be someone who can transition the party into the time after Merkel.

By Sunday, we will know whether we will soon have a functioning government or not. There is hope, that we do. But in any case, the two parties have a very different path to success. Angela Merkel seems on a good path to allow for a smooth transition of the CDU into the time after her Chancellorship. For the SPD, the transition process seems nothing but smooth., whether they enter the coalition or not.

The Belgian Job: Germany looking for a government

After eight long weeks since the federal election, the outlook for politics in Germany seems bleaker than ever. An election that saw the rise of right-wing populism in form of the Alternative for Germany (AfD) now has resulted in a situation that once seemed reserved for countries like Italy or Belgium: with nothing more than an interim government and no prospective coalition in sight.

After the liberal FPD vacated the negotiation table late Sunday night, the idea of a three party coalition between the CDU/CSU, the Greens and said liberals is off the table for good. After four weeks of exploratory talks, which were as much an extended trust building exercise as they were contract negotiations between embattled partners, the bridges are burnt. Tales of the events are spun already.
For the FDP, their decision to not enter a coalition supposedly was a matter of principle. The Liberals are wary of the experience of their last government under Chancellor Merkel, when they were marginalized and failed to re-enter the Bundestag in subsequent elections. Even though they seemed be able to secure substantial parts of the their policy demands in the exploratory talks, they again felt that they were marginalized between Merkel’s CDU/CSU and the Greens. Strategically, they now have the chance to follow a national-liberal course that would place them well between Merkel’s conservatives and the AfD.
Unlike the Liberals, Conservatives and Greens both felt that substantial progress was made even at the last hour. As such, many of those who took part in the negotiations were stunned when the FDP walked away. With a supposedly almost finished compromise on the table, it felt like it was a move that was very much planned ahead. Even worse was the sentiment, that the FDP stopped to negotiate in good faith quite some time ago.
This leaves Germany in a precarious political situation. The only other viable coalition to have a majority in parliament is the Grand Coalition of CDU/CSU and the Social Democrats (SPD). The latter however made it clear that they will not enter a coalition with the CDU/CSU again, a stance they re-affirmed on Monday. Out of six parties elected to the Bundestag (seven when counting the Bavarian CSU separately), only Conservatives and the Greens want to govern.
Under these circumstances, Federal President Frank-Walter Steinmeier now is the key decision maker. He will have the final say on whether he appoints a minority government – possibly between Greens and Conservatives – or if he calls for a snap election. For now he is trying to get all parties to the negotiation table again, but these efforts are very likely to be futile.
It isn’t entirely unlikely that Germany is headed to an extended period of political uncertainty. A minority government is wanted by nobody and a snap election – as of polls from Monday – is unlikely to show results much different from the September vote. The picture might become a bit more clear over the next few days, as President Steinmeier is meeting with the leaders of all parties, trying to gauge the situation.
If the German people were to make the decision, the choice would be overwhelmingly clear. 65 percent of voters want a snap election, only 29 percent a minority government.


Europe is busy discussing the proposals of Jean-Claude Juncker, an the major election campaigns made it a point to comment. Minister of Finance Wolfgang Schäuble (CDU) expressed his concern about wanting to expand the Eurozone, saying it was good for Juncker to “up the pressure and tempo” on the issue, but cautioned that candidates would really have to meet the economic conditions for joining.

Sigmar Gabriel (SPD) was enthusiastic, calling the speech “engaged and leaded the way”. He also said that the “firework of ideas (…) would give us much to further discuss and debate.” 

Just as Juncker’s speech, the taxation proposal of Germany, France, Italy and Spain regarding the taxation of the digital economy also garnered much attention, albeit not from German politics. Germany media mostly praised the proposal, although some also noted that actually getting companies to pay their taxes dutifully would be a tough task, even for the European Union. It was also noted however, that any action at the European level would require unanimous consent, which seems unlikely as of now.

Regarding the election itself, that still hasn’t been a major swing. Yet, smaller fluctuations over the last few weeks have removed the theoretical option of a coalition between CDU/CSU and one of the Greens or Liberals, respectively.

Overall, the poll numbers currently are as follows: CDU/CSU 37%, SPD 23%, FDP 8%, The Left 10%, AfD 9%, Greens 8%. With a majority requiring 327 seats, CDU/CSU and SPD would be the only two-party coalition that has a majority.

POLITICAL OVERVIEW: Government and car producers hold diesel summit, Merkel still leading by a wider margin

Leading government politicians and major German car producers have agreed upon the introduction of new software upgrades which would reduce harmful emissions by up to 30% in more than 5 million affected diesel cars across Europe. The decision was made on the occasion of the so-called diesel summit the federal government has held in order to remind the ailing and pressured industry of its obligations. The decision had become necessary as bans on Diesel cars in many German cities are looming over the violation of tough environmental standards.

Before the agreement was reached, co-host Transport Minister Alexander Dobrindt had already sent strong signals that he would be satisfied with a comparatively industry-friendly correction and thus contradicted his colleague Barbara Hendricks, who had called for more far-reaching changes. The Environment Minister made no secret of her intention to use the scandal for promoting a serious emissions cut of up to 30%. “There is still a possible gap, which must be closed“, Hendricks said and promised to carefully monitor future developments in the field. Meanwhile, industry representatives like the German Car Manufacturer’s Association (VdA) signaled a certain remorse and announced that they would learn from their mistakes. However, they preserved their tough stance on free software updates being fully sufficient and only laid out plans to align these updates with new incentives for customers to trade in particularly old and environmentally harmful vehicles.

While the diesel scandal dominates Germany’s political landscape for the moment, there are almost no election-related repercussions or ramifications on the horizon. On the contrary, Chancellor Merkel has successfully stabilised her CDU/CSU’s polling numbers at around 40% with the main rival SPD far behind at 22% and the minor parties FDP, Greens, AfD and the Left all competing in a neck-to-neck race with 8% each. These are devastating numbers for the Social Democrats’ lead candidate and former saviour Martin Schulz who was almost universally predicted to become a major obstacle for another four years of Merkel rule just a few months ago – and who is now on his way to essentially undercut Frank-Walter Steinmeier’s historically low 2009 result of 23.0%. Even worse, Mr Schulz has tried almost every tool modern-day party politics can provide, from agenda setting to strategic surprises (c.f. the SPD’s vote in favor of same-sex marriage) and personal attacks against the Chancellor and her governing style. But nothing of it has worked so far.

Political Overview: German-Turkish relations face new pressure, Berlin enchanted by Royal visit, CSU publishes “Bayern Plan“

The already tense relationship between Germany and Turkey has suffered another major blow this week with Turkish police forces arresting six human right activists, including a German citizen, they accuse of supporting violent terrorist groups in the Kurdish areas. German politicians across the political spectrum have voiced harsh criticism on the Turkish government’s course of action and called it “a politically motivated farce“ as well as a clear violation of the rule of law. Chancellor Merkel, who used to be quite reluctant in the past in an effort to not damage her work relation with Turkish President Erdogan more than necessary, expressed “major concerns“ and demanded the immediate and unconditional release of those arrested. Foreign minister Sigmar Gabriel, SPD, even announced that Germany would need to reconsider its entire Turkey policy since “the most absurd things“ seem to be possible now and Turkey is no longer the trustworthy ally of the past.

While a tough stance on Turkey remains a largely undisputed issue in German party politics, the country’s gatekeeper position and its ability to significantly curb refugee flows from the Middle East are still valuable assets. For the conservative CSU, this kind of dependency should be abolished  rather sooner than later and replaced by a tougher national border regime and less immigration. In their recently published “Bayern Plan“ (a composition of ideas either too radical for the common election manifesto or too specific), the CSU puts great emphasis on exactly this kind of domestic security issues, fighting for potential AfD voters who feel disenfranchised by the political mainstream. Again, they embrace their infamous “Obergrenze“ (upper limit) for asylum seekers and the very concept of a German “Leitkultur“ (lead culture) as a guiding principle for integration and community. Since there will be Bavarian state parliament elections in 2018, the CSU needs to satisfy its conservative clientele and the “Bayern Plan’s“ content may provide a helpful tool in this regard.

Political Overview: G20 meeting taking place in Hamburg, CDU presents election program, Merkel heading into summer recess with huge poll lead

Angela Merkel will host the annual G20 meeting in Hamburg this weekend, welcoming state leaders from the world’s most important economies in Germany to discuss a whole plethora of urgent world affairs. Topics on the agenda include for instance the most recent diplomatic incidents concerning Qatar, the ongoing civil war in Syria, potential threats posed by digitisation and large-scaled hacker attacks and future prospects for the African continent. More than 19,000 policemen have been deployed to protect the chancellor’s high-profile guests since at least two major protest marches have been announced, one of them including well-known militants that are particularly  likely to use violence. For world leaders, the summit itself is widely considered an expedient platform to familiarise themselves with each other and to address major challenges as a seemingly unified bloc. However, Ms Merkel may also take the opportunity to distinguish her calm leadership approach from the more impulsive style of U.S. President Trump and his Turkish colleague Erdogan, thus strengthening her own role as a global key player.

Domestically, the chancellor is maintaining a strong position as well. Together with CSU chairman and Bavarian Minister-President Horst Seehofer, Ms Merkel has just presented their parties’ election manifesto, labelling it „a great opportunity to dream a little bit about the future.“ With not even 80 pages, the CDU/CSU’s program is not particularly extensive but still aiming at a great number of different subjects: More housing construction projects, lower unemployment figures and taxes, increased investments in the fields of research and education and a more restrictive asylum policy are all mentioned in the text. However, the refugee crisis has lost its topical dominance with even Mr Seehofer stating that his infamous „Obergrenze“ (upper limit) won’t play any further role for the election campaign. „It’s alright. There is not a single point where we had a serious content-related dispute“, he proclaimed. Since Ms Merkel is still leading in the most recent GMS (06.07., 39% to 23%), Forsa (05.07., 39% to 23%) and Forschungsgruppe Wahlen (07.07., 40% to 24%) polls by double digits, the CDU/CSU’s manifesto will most probably serve as the foundation of a potential coalition treaty with either the FDP or the Greens – maybe even with both.

Political Overview: British negotiation capability questioned, SPD earns mixed reactions for tax plans, FDP rising to new heights

Almost exactly twelve months after the infamous referendum of June 2016, EU lead negotiator Michel Barnier and his UK counterpart David Davis have formally begun Brexit negotiation talks in Brussel, thereby opening up the latest chapter of the British withdrawal from the European institutions. Meanwhile, German politicians have voiced strong criticism against the UK’s negotiation stance which appears to be all too vague, erratic and additionally weakened by the recent parliamentarian elections’ political turmoil and the subsequent government reshuffle. „A negotiation partner not knowing his own goals is a difficult partner“, German MEP Elmar Brok noticed – a position that was quickly seconded by Foreign Minister Sigmar Gabriel and SPD lead candidate Martin Schulz. Both SPD politicians called for „British realism“ and clear yet reasonable negotiation demands.

Previously, Mr Schulz has unveiled his tax plans which would not only see top income but also corporate tax rates rising. Consequently, reactions varied between staunch opposition and cautious praise: the President of the Federation of German Industries (BDI), Dieter Kempf, didn’t withhold criticism and accused the SPD of knowingly hampering the economy. Contrasting this position, economists from the SPD-leaning German Institute for Economic Research (DIW) praised the plans as a reasonable and feasible balancing act between appeasing the party base and reassuring the corporate world that a Schulz chancellorship might only seek comparatively moderate changes. Yet, there is no hint that embracing the issue might save Mr Schulz from his quickly deteriorating poll numbers and generally poor chances to replace Ms Merkel.

This is even more the case since another party is already rising in the polls and creating the kind of momentum the SPD has lost since the May 2017 state elections: the FDP. Germany’s liberals have been revitalised by an energetic campaign and the increasing popularity of party chairman Christian Lindner who is widely considered to be young, smart and well-spoken enough to successfully reshape the party’s unfavourable image. With recent FDP numbers steadily oscillating between 8.0% (Forsa) and 10.5% (Allensbach), the chances of a CDU/CSU-FDP coalition have also been elevated to the rank of a serious theoretical possibility. For Ms Merkel, it would be another power option to use as a bargaining chip in possible coalition negotiations. For Mr Schulz, It’s another burden to overcome.

Angela Merkel 3 – Martin Schulz 0

There have been three regional elections in Germany this year and the results don’t bode well for Martin Schulz, the former President of the European Parliament, and now the leader of the Social Democrats (SPD) ahead of September’s federal election. The latest two setbacks came just seven days apart, as Schulz’s party lost consecutive votes in the states of Schleswig-Holstein and North Rhine-Westphalia (NRW), despite leading the incumbent government. To make matters worse, the weeks leading up to the elections saw the Social Democrats quickly dropping in opinion polls in both states, with Schulz being almost invisible in both campaigns.

You may read more on the blog of our London based partner Newgate Communications

Political Overview: De Maiziére pushes “Leitkultur”, Merkel in Brussels, Russia, Middle East, FDP Convention

Federal Minister for Interior Affairs Thomas de Maiziére has published 10 theses on German “Leitkultur” (dominant or guiding culture), calling on immigrants to assimilate to German culture and observe local customs such as “shaking hands when greeting”. Neither the ideas nor the following debate is new, reflecting Germany’s slow awakening of being an immigration-society. CDU Vice Chairmen Thomas Strobl and Armin Laschet reacted with praise. CSU General Secretary Andreas Scheuer agreed: “It’s about time that this discussion happens in Berlin as well.”

SPD and FDP chairmen Martin Schulz and Christian Lindner both insisted that no theses on Leitkultur were necessary, referring to the German constitution instead, while Green party leader Simone Peters criticised that instead of culture debates, Government should work on an improved security policy.

Overall, integration of immigrants reemerges as a campaign issue: Following the Turkish constitutional referendum, which was supported by 60% of cast votes in Germany, some CDU members had called for an end of dual citizenship — a step Ms Merkel has ruled out. In a later interview, Mr Schulz extended his criticism, arguing that the debate was used to distract from the case of a presumed Nazi-terrorist within the German Army, a matter which also puts the German Minister of Defense Ursual von der Leyen under pressure.

After a visit to Brussels, Chancellor Angela Merkel went to Saudi Arabia and Abu Dhabi to talk about human rights, economic and security cooperation, G20 and regional conflicts. On return, she also met Russian President Vladimir Putin in Sotchi to discuss conflicts from Ukraine and Syria to Yemen. Germany’s foreign policy establishment welcomed the talks.

At the FDP’s party conference over the weekend, the Liberals passed their manifesto for September’s general election and confirmed Christian Lindner as lead candidate with 91%. The manifesto focuses on education and digitisation, including investment into the digital infrastructure of schools and digital education of teachers. Beyond education, the manifesto seeks to create more accommodative conditions for entrepreneurs and to give consumers more control over their data. The manifesto also covers civil rights, foreign policy, and taxation.

Mr Schulz meanwhile has come under scrutiny for his personnel policy when back as EP President. Polling gives even less good news for the Social Democrats, they dropped by 8 points, scoring 28% now, with the CDU/CSU scoring 41% (+4), the Left 8% (+2), the Greens 8% (+1), FDP 7% (+3), and the AfD 6% (+/- 0). Also on personnel, the CDU has regained her support hand: Half of all respondents would vote for Ms Merkel 50%, while Mr Schulz would only get 37%. In Saarland, CDU and SPD agreed to renew their grand coalition.