KEY POINTS: What Germany’s three parties in coalition talks have agreed

Here's what the parties hoping to form Germany's next government are planning on tax, climate change, autobahn speed limits and pensions.

Annalena Baerbock from Bündnis 90/Die Grünen, Christian Lindner, head of the FDP, Olaf Scholz from the SPD in Berlin on Friday.
Annalena Baerbock from Bündnis 90/Die Grünen, Christian Lindner, head of the FDP, Olaf Scholz from the SPD in Berlin on Friday. Photo: dpa | Kay Nietfeld

German Finance Minister Olaf Scholz took a step closer to succeeding Angela Merkel as chancellor on Friday, as his Social Democrats, the ecologist Greens and liberal FDP announced a preliminary deal to form a new government.

The three parties have been holding talks since Scholz’s centre-left Social Democratic Party (SPD) won the general elections on September 26th with Merkel’s conservatives in second place as she prepares to leave politics.

“Overall, we can sense here that a new beginning is possible, brought about by the three parties that have come together here,” Scholz told reporters.


No tax hikes

The three parties aiming to form Germany’s next coalition government promised Friday to maintain the no-new-debt rule and not introduce any tax hikes, continuing the country’s familiar path of fiscal rigour, according to an initial coalition agreement.

The centre-left Social Democrats, the Greens and the liberal FDP pledged massive investments to make Europe’s top economy greener and more digital, but “within the framework of the constitutional debt brake”. The text also vowed not to introduce new taxes or increase existing ones.

In their initial agreement, they agreed to maintain the so-called debt brake limiting new borrowings to 0.35 percent of output per year.

Minimum wage

The Social Democrats secured their electoral promise of raising minimum wage to 12 euros ($14) “from the first year” from the current 9.60

Lower voting age

All three agreed to lower the voting age to 16 – something likely to favour the Greens and FDP which have younger supporters as opposed to Angela Merkel’s conservatives, who are largely backed by Germany’s army of pensioners.

Lower electricity costs

​​The SPD, Greens and FDP want to reduce electricity costs for private households and businesses.

“In the course of the legislative period, we will end the financing of the EEG levy via the electricity price as quickly as possible,” reads a joint paper presented by the three parties on Friday. “In this way, we will reduce electricity costs for private households and businesses.”

Billions of euros in levies under the Renewable Energy Sources Act (EEG) are currently used to subsidise green power.

The subsidies for wind and solar partly explain why Germans pay the highest electricity bills in Europe.

READ ALSO: Germany slashes electricity surcharge as prices surge

Quicker end to coal

Germany will aim to bring forward its exit from coal energy to 2030 from the initially planned 2038, according to an initial agreement.

“To meet targets on climate protection, an accelerated exit from coal power is necessary. Ideally, that should be achieved by 2030,” said the text agreed on between the Social Democrats, Greens and the liberal FDP.

No speed limit

The SPD, Greens and FDP do not want a general speed limit on Germany’s famous autobahns.

“We want to make Germany the leading market for electro-mobility and, to this end, massively accelerate the expansion of our charging station infrastructure. There will be no general speed limit,” the joint paper said.

Green Party leader Robert Habeck said conceded that “we were not able to push through the speed limit.” The Greens had pledged at 130 km/h limit in their manifesto.

READ ALSO: Will Germany soon introduce a speed limit?

No new combustion engines after 2035

The paper states that the EU’s “Fit for 55” climate program should be supported.

“According to the EU Commission’s proposals, in the transport sector this would mean that only CO2-neutral vehicles would be registered in Europe in 2035 – with a correspondingly earlier impact in Germany.”

No increase in pension age

“There will be no pension cuts and no increase in the statutory retirement age,” the paper says. The paper foresees “partial capital coverage” for future pensions – ie an investment fund to run parallel to the current Generationsvertrag.

“To this end, in a first step we will inject a capital stock of ten billion euros into the German pension insurance scheme from budgetary funds in 2022,” the paper says.

Sovereign Europe

Foreign policy was dealt with in broad strokes in the initial document.

The parties however emphatically said they “want to raise Europe’s strategic sovereignty” — likely to please the continent’s second biggest power France, which has made this a priority of its EU presidency beginning 2022.

The transatlantic relationship will remain a “central pillar” for Germany, and NATO is an “indispensable element” for the country’s security, the text said.

And potentially grating to Poland or Hungary – the parties want “an EU which protects its values and rule of law internally and externally”.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


‘Russia must not win this war,’ says Germany’s Scholz

German Chancellor Olaf Scholz pledged once again to stand with Ukraine against Russia - but said Ukraine's bid to join the EU cannot be sped up.

'Russia must not win this war,' says Germany's Scholz

Scholz said the war in Ukraine was the greatest crisis facing the EU in its history, but that solidarity was strong. 

“We are all united by one goal: Russia must not win this war, Ukraine must prevail,” Scholz said in the speech to the Bundestag on Thursday.

Putin thinks he can use bombs to dictate the terms for peace, the SPD politician said. 

“He’s wrong. He was wrong in judging the unity of Ukrainians, and the determination of our alliances. Russia will not dictate peace because the Ukrainians won’t accept it and we won’t accept it.”

Scholz said it was only when Putin understands that he cannot break Ukraine’s defence capability that he would “be prepared to seriously negotiate peace”.

For this, he said, it is important to strengthen Ukraine’s defences. 

Scholz also pledged to help cut Europe free from its reliance on Russian energy. 

The Chancellor welcomed the accession of Finland and Sweden to Nato. “With you at our side, Nato, Europe will become stronger and safer,” he said.

However, Scholz dampened expectations for Ukraine’s quick accession to the EU.

“There are no shortcuts on the way to the EU,” Scholz said, adding that an exception for Ukraine would be unfair to the Western Balkan countries also seeking membership.

“The accession process is not a matter of a few months or years,” he said.

Scholz had in April called for Western Balkan countries’ efforts to join the EU to be accelerated amid a “new era” in the wake of Russia’s invasion of Ukraine.

Last October, EU leaders at a summit in Slovenia only reiterated their “commitment to the enlargement process” in a statement that disappointed the six candidates for EU membership — Albania, Bosnia, Serbia, Montenegro, North Macedonia and Kosovo – who had hoped for a concrete timetable.

“For years, they have been undertaking intensive reforms and preparing for accession,” Scholz said on Thursday.

“It is not only a question of our credibility that we keep our promises to them. Today more than ever, their integration is also in our strategic interest,” he said.

The chancellor said he would be attending the EU summit at the end of May “with the clear message that the Western Balkans belong in the European Union”.

Scholz also called for other ways to help Ukraine in the short term, saying the priority was to “concentrate on supporting Ukraine quickly and pragmatically”.

France’s President Emmanuel Macron has also said it will take “decades” for a candidate like Ukraine to join the EU, and suggested building a broader political club beyond the bloc that could also include Britain.