Merkel’s climate strategy called into question at last visit to motor show

No German leader's diary would be complete without a visit to the venerable IAA motor show, which welcomes Angela Merkel on Tuesday for the last time in her chancellorship.

Merkel's climate strategy called into question at last visit to motor show
Chancellor Angela Merkel opens the biennial IAA car show in Frankfurt to the public on September 12th, 2019. Photo: Tobias SCHWARZ / AFP

But the biennial celebration of all things auto-related is mired in controversy this year as Germany struggles to adapt its flagship industry to the electric and digital revolution.

Merkel, who is quitting politics after an election on September 26th, has been a regular at the show over her 16 years in power – even earning the sobriquet the “car chancellor” for her efforts to shield German carmakers from tougher EU pollution rules.

The German leader will give a speech when the fair opens to trade visitors on Tuesday in Munich, a new location as part of efforts to rebrand itself as a “mobility fair” with a spotlight on electric cars.

But there is little chance of the chancellor herself arriving in an electric vehicle, since they make up only 2.4 percent of the government’s 25,000-strong fleet, according to official figures from January.

The figure rises to 5.6 percent when taking into account hybrids and cars that run on clean fuels.

Even so, it is a stark reflection of the blind spots in state support for the German automotive industry, which has received billions of euros in funding in recent years but without any meaningful focus on clean mobility.

‘Depressing and incomprehensible’

The 2015 “dieselgate” scandal spelled the beginning of the end for diesel. That was when Germany’s biggest carmaker Volkswagen admitted to fitting 11 million vehicles with illegal emissions-cheating devices.

Until then, Diesel was favoured by German and other governments as an efficient and more environmentally friendly alternative to gasoline.

Merkel expressed anger at the scandal.

But in Brussels, her government sought to slow the shift to e-mobility by watering down toughened emissions regulations that German carmakers would struggle to comply with, the Sueddeutsche Zeitung said.

On the eve of Merkel’s visit, the boss of Volkswagen even blamed her government for slowing down the electric revolution by incentivising diesel engines even after his company was seeking to make the switch following the emissions scandal.

READ ALSO: German climate groups plan legal action against car giants

“A car company cannot do this transition (alone) because you need the right environment,” Volkswagen chief executive Herbert Diess told AFP in an interview. “If you keep diesel cheap… nobody will buy an electric car, it’s impossible,” he said.

Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, called the government’s diesel strategy “depressing and incomprehensible”.

Ferdinand Dudenhoeffer, an expert in the automotive sector, thinks Merkel’s strategy for the car industry is “depressing and incomprehensible”. Photo: picture alliance/dpa | Roland Weihrauch

“The state fuelled a diesel boom through tax breaks, and now diesel passenger cars are practically unsellable,” he told AFP.

“Scrappage schemes, incentives to buy electric cars, subsidies for battery production, aid for recycling, short-time working allowances – this has been the strategy for 16 years. This alleviates short-term economic problems, but does not build a new structure,” Dudenhoeffer said.

“The government has had to balance short-term economic concerns with the interests of industry and the unions,” he said.

READ ALSO: German public transport slammed as ‘failure’ as half of users switch to car

Merkel’s government has always treaded gingerly because of the 800,000 jobs at stake in the industry.

But the Sueddeutsche Zeitung lamented in August that “with her overly generous attitude towards the car industry, the chancellor has helped neither the companies nor the country in the medium term”.

“Valuable years have been lost in the battle to phase out the combustion engine,” it said.

Existential crisis

With the momentum for greener mobility growing, and with tougher anti-pollution guidelines in place, Germany’s car manufacturers are now no longer able to put off the inevitable.

The decline of the combustion engine is proving to be an existential crisis for the car industry, which accounts for more than 12 percent of jobs in the industrial sector in Germany.

READ ALSO: Is Berlin set to become car-free in the next few years?

In late 2019, Audi said it was planning to cut 9,500 jobs in Germany by 2025, while Daimler announced it would cut 10,000.

While Germany’s large manufacturers have the resources to weather the transition, the ecosystem of equipment manufacturers and smaller businesses in the supply chain may not be so resilient.

By Sophie Makris 

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Germany’s ‘traffic light’ parties sign coalition agreement in Berlin

Two and a half months after the federal elections on September 26th, the three parties of the incoming 'traffic light' coalition - the SPD, Greens and FDP - have formally signed their coalition agreement at a public ceremony in Berlin.

Traffic light coalition
Germany's next Chancellor Olaf Scholz (front, left) on stage in Berlin with other members of the new coalition government, and their signed agreement. Photo: picture alliance/dpa | Michael Kappeler

The move marks the final stage of a 10-week week process that saw the three unlikely bedfellows forming a first-of-its-kind partnership in German federal government. 

The SPD’s Olaf Scholz is now due to be elected Chancellor of Germany on Wednesday and his newly finalised cabinet will be sworn in on the same day. This will mark the end of the 16-year Angela Merkel era following the veteran leader’s decision to retire from politics this year. 

Speaking at the ceremony in Berlin on Tuesday morning, Scholz declared it “a morning when we set out for a new government.”

He praised the speed at which the three parties had concluded their talks and said the fight against the Covid crisis would first require the full strength of the new coalition.

Green Party co-leader Robert Habeck, who is set to head up a newly formed environment and energy ministry, said the goal was “a government for the people of Germany”.

He stressed that the new government would face the joint challenge of bringing climate neutrality and prosperity together in Europe’s largest industrial nation and the world’s fourth largest economy.

Green Party leader Annalena Baerbock spoke of a coalition agreement “on the level of reality, on the level of social reality”.

FDP leader Christian Lindner, who managed to secure the coveted role of Finance Minister in the talks, declared that now was the “time for action”.

“We are not under any illusions,” he told people gathered at the ceremony. “These are great challenges we face.”

Scholz, Habeck and Lindner are scheduled to hold  a press conference before midday to answer questions on the goals of the new government.

‘New beginnings’

Together with the Greens and the FDP, Scholz’s SPD managed in a far shorter time than expected to forge a coalition that aspires to make Germany greener and fairer.

The Greens became the last of the three parties to agree on the contents of the 177-page coalition agreement an in internal vote on Monday, following approval from the SPD and FDP’s inner ranks over the weekend.

“I want the 20s to be a time of new beginnings,” Scholz told Die Zeit weekly, declaring an ambition to push forward “the biggest industrial modernisation which will be capable of stopping climate change caused by mankind”.

Putting equality rhetoric into practice, he unveiled the country’s first gender-balanced cabinet on Monday, with women in key security portfolios.

“That corresponds to the society we live in – half of the power belongs to women,” said Scholz, who describes himself as a “feminist”.

READ ALSO: Scholz names Germany’s first gender-equal cabinet

The centre-left’s return to power in Europe’s biggest economy could shift the balance on a continent still reeling from Brexit and with the other major player, France, heading into presidential elections in 2022.

But even before it took office, Scholz’s “traffic-light” coalition – named after the three parties’ colours – was already given a baptism of fire in the form of a fierce fourth wave of the coronavirus pandemic.

Balancing act
Dubbed “the discreet” by left-leaning daily TAZ, Scholz, 63, is often described as austere or robotic.
But he also has a reputation for being a meticulous workhorse.
An experienced hand in government, Scholz was labour minister in Merkel’s first coalition from 2007 to 2009 before taking over as vice chancellor and finance minister in 2015.
Yet his three-party-alliance is the first such mix at the federal level, as the FDP is not a natural partner for the SPD or the Greens.

Keeping the trio together will require a delicate balancing act taking into account the FDP’s business-friendly leanings, the SPD’s social equality instincts and the Greens’ demands for sustainability.

Under their coalition deal, the parties have agreed to secure Germany’s path to carbon neutrality, including through huge investments in sustainable energy.

They also aim to return to a constitutional no-new-debt rule – suspended during the pandemic – by 2023.

FDP cabinets
Volker Wissing (l-r), FDP General Secretary und designated Transport Minister, walks alongside Christian Lindner, FDP leader and designated Finance Minister, Bettina Stark-Watzinger (FDP), the incoming Education Minister, and Marco Buschmann, the incoming Justice Minister. Photo: picture alliance/dpa | Michael Kappeler


Incoming foreign minister Annalena Baerbock of the Greens has vowed to put human rights at the centre of German diplomacy.

She has signalled a more assertive stance towards authoritarian regimes like China and Russia after the commerce-driven pragmatism of Merkel’s 16 years in power.

Critics have accused Merkel of putting Germany’s export-dependent economy first in international dealings.

Nevertheless she is still so popular at home that she would probably have won a fifth term had she sought one.

The veteran politician is also widely admired abroad for her steady hand guiding Germany through a myriad of crises.