Tensions Build in New, ‘Explosive’ German Coalition

Tensions Build in New, ‘Explosive’ German Coalition

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“The CDU/CSU parliamentary group will ensure that for each SPD issue, a concern of the CDU and CSU will be put forward,” Kauder said at a CDU party conference held to approve the coalition deal

For the conservatives, taking a tougher line on immigration after the 2015 refugee crisis is a top priority, as is spending on domestic and foreign security.

“If there is room for manoeuvre in the budget, we won’t forget the armed forces,” Kauder said.

The coalition deal foresees additional fiscal space of 46 billion euros ($57 billion) over the next four years.

 

 

Any additional surplus is earmarked primarily for defence, development and crisis prevention, with spending to be split equally between military and non-military projects.

 

DEFENCE AND EUROPE

But SPD leaders are likely to be sceptical about any big jumps in the defence budget. They have also raised questions about the NATO target of moving toward spending 2 percent of gross domestic output on the military.

Should economic growth slow and tax revenues come in weaker than projected – a scenario that new U.S. trade tariffs could help to bring about – the social spending plans dear to the SPD could also be threatened.

 

The issue of European Union reform, given great prominence in the coalition deal under the heading ‘A new start for Europe’, also promises to be contentious

The agreement echoed the SPD’s vocal backing for French President Emmanuel Macron‘s reform initiative, which foresees creating a euro zone Finance Ministry and budget. In their document, the CDU/CSU and SPD offered support for budgetary means to shield the euro zone from crises and said Germany was prepared to pay more into EU finances – albeit still stressing Germany’s commitment to the EU’s strict budget rules.

“I suspect the Social Democrats’ vision is considerably different to ours,” said Seif of the CDU, who worried about German taxpayers’ money being splashed about. “We are not a debt or transfer union, and we don’t want to become one.”

 

 

To clinch the coalition deal, Merkel gave up the finance ministry to the SPD – a surprise concession, considering that the conservatives defeated the SPD by 32.9 percent to 20.5 percent in September.

 

New Social Democrat finance minister Olaf Scholz promises to be a safe pair of hands whose budgets will in any case be overseen by parliament

But Scholz is close to Andrea Nahles, poised to take over as SPD leader in April in a move that will give the Social Democrats a significant platform outside the government.

Instead of becoming a minister, Nahles will lead the SPD’s parliamentary party. A fierce debater with a common touch that Merkel lacks, Nahles promised after the election to “smash in the face” of the CDU.

“She’s going to give Merkel a tough time,” said Andrea Roemmele, professor at the Hertie School of Governance in Berlin. ($1 = 0.8133 euros)

 

(Writing by Paul Carrel; Editing by Kevin Liffey)