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How the coalition agreement changes everyday life in Germany

What does the coalition agreement between the SPD, the Greens and the FDP mean for the everyday lives of people living in Germany? Tenants, teens, families and car owners will all be affected under the new plans. Here are a few of them that may impact you.

Low income families will be given more financial support.
Low income families will be given more financial support. Photo: dpa-Zentralbild | Sebastian Kahner

The next coalition is promising to ‘dare to make progress’ in its government programme, with a particular emphasis on an ambitious climate policy. But there are many smaller changes that will have a more immediate impact on our lives.

Here are the key changes that are planned.

Families with children are to benefit from more daycare places and all-day care in schools.

They want to introduce a new child allowance, which is intended to support families on low incomes. It will wrap in the current child benefits, with other welfare including education support.

There is also a gift to new parents. Both parents are to receive two weeks’ paid leave after the birth of a child, while parental payments will also be extended for an additional month.

Tenants will no longer have to bear the entire extra costs put on heating bills by CO2 taxes. The coalition wants to achieve “fair sharing” by making landlords take on some of the costs.

The coalition wants to develop a model for the sharing of costs according to energy classes by mid-2022. If they haven’t done so by that time, they’ve agreed that cost will be shared 50/50 between tenant and landlord from June 1st onwards.

The rental brake, which limits new rents in areas with an overstretched housing market, will be extended and tightened up. As opposed to allowing rents to go up by 15 percent over three years, landlords will only be able to raise rents by up to 11 percent over this time. 

READ MORE: Four ways to help lower your rent in Germany

Homeowners will have to prepare for higher costs of building their own four walls. Those who build or renovate will soon have to comply with higher energy standards. That means more insulation, new windows and more heat generation with solar and biofuels. For new private buildings, solar panels are to become the rule, but they won’t be mandatory.

From 2025 onward, only heating systems that use 65 percent renewable energy, such as heat pumps, are to be allowed.

Electricity customers are to be offered relief on energy bills, which have been shooting up recently. From 2023, the EEG levy to promote green electricity will no longer be financed via the electricity bill, but by the federal government.

SEE ALSO: Why households in Germany are facing higher energy bills

According to comparison portal Verivox, abolishing the EEG will reduce the electricity bill for an average family by around €177 each year. The coalition also wants to offer a one-off increase in heating allowance to help households manage rising heating costs.

Car owners can expect fuel prices to keep rising. The CO2 tax will go up at the start of 2022, making petrol and diesel more expensive. However, a Green Party demand for a sharper rise to the carbon tax didn’t make it into the document.

Petrol prices will go up next year. Photo: dpa-tmn | Christin Klose

The state pension is to remain stable. In addition, more self-employed people are to be included in the statutory pension scheme. Some of the money paid in is to be invested on the capital market, which the coalition hopes will lead to better returns.

Low-wage earners will benefit from an increase in the minimum wage from the current €9.60 to €12 an hour. “This means a salary increase for ten million citizens,” said Olaf Scholz (SPD).

Rejected asylum seekers who learn German, are in steady work and do not commit crimes will be given new opportunities to remain in Germany permanently.

Family caregivers should receive more support including wage compensation for care-related time off.

Those who work in home office will still be able to claim a lump sum on their tax return next year. The allowance is €5 per day worked at home, up to a maximum of €600 per year.

SEE ALSO: Six Berlin cafes and co-working spaces to escape the home office

Teenagers are to be allowed to vote and obtain a driver’s license at an younger age. The voting age for federal elections is to be lowered to 16.

Accompanied driving is also to be possible from the age of 16, instead of the current 17. But drivers younger than 18 will still only be allowed to drive in the company of someone who is at least 30 years old.

The coalition agreement promises internet users anonymity while surfing. The ‘traffic light’ parties want as little monitoring and storage of communications data as possible. In the future, people who sign contracts online will be able to cancel them simply by clicking a button.

Consumers are to be given more protection against buying poorly manufactured products. Products that are used for a long time will have to have a correspondingly long warranty.

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Green ministers outshine Scholz as stars of German government

Eclipsed by two Green party ministers over his response to the war in Ukraine, Chancellor Olaf Scholz is battling to wrest back public approval - starting with a speech to parliament on Thursday.

Green ministers outshine Scholz as stars of German government

Scholz, whose Social Democrats (SPD) are in power with the Greens and the liberal FDP, has faced a barrage of criticism over his perceived weak response to the war, including his hesitancy over sending heavy weapons to Ukraine.

Meanwhile, Green party Foreign Minister Annalena Baerbock and Economy Minister Robert Habeck have impressed with their more vocal approach, topping a recent survey of the country’s most popular politicians.

Scholz’s party suffered a crushing defeat in a key regional election at the weekend, losing to the conservative CDU with its worst-ever result in Germany’s most populous state of North Rhine-Westphalia.

The Greens, meanwhile, almost tripled their score compared with five years ago to finish in third place and look almost certain to be part of the next regional government.

READ ALSO: Why the Greens are the real winners of Germany’s state elections

Der Spiegel magazine called the result a “personal defeat” for Scholz after he was heavily involved in the election campaign, appearing on posters and at rallies.

Already famous for his lack of charisma before he became chancellor, Scholz now appears to be paying the price for dragging his feet in dealing with Moscow over fears of escalating the crisis.

In a bid to win back the public, Scholz has in recent days given lengthy television interviews.

On Thursday, he will be explaining his policy to lawmakers ahead of the EU summit at the end of May.

Chancellor Olaf Scholz (m) with ministers (l-r) Svenja Schulze, Annalena Baerbock, Robert Habeck, Cem Özdemir and Christine Lambrecht at a meeting in May 2022.

Chancellor Olaf Scholz (m) with ministers (l-r) Svenja Schulze, Annalena Baerbock, Robert Habeck, Cem Özdemir and Christine Lambrecht at a meeting in May 2022. Photo: picture alliance/dpa | Kay Nietfeld

Sitting tight

In a devastating reading of Scholz’s outings so far, the weekly Focus assessed that “his language is poor, his facial expressions monotone and his body language too understated.”

According to Der Spiegel, the chancellor’s communications strategy seems to revolve around one mantra: “Repeat, repeat, repeat.”

Other media have accused him of stubbornly sticking to the same plan and ignoring what is going on around him.

“His party is plummeting, but the chancellor feels that he has done everything right… Doubts and questions rain down on him, but Olaf simply sits tight,” said Der Spiegel.

Scholz’s spokesman Steffen Hebestreit has defended the chancellor, suggesting that the public value his calm demeanour and would find it “inauthentic” if he tried to turn himself into Barack Obama.

READ ALSO: How war in Ukraine has sparked a historic shift in Germany

But for political scientist Ursula Münch, Scholz does not come across as calm and measured but rather “imprecise” compared with his colleagues from the Green party.

Scholz has also not been helped by the fact that Defence Minister and fellow SPD politician Christine Lambrecht is currently caught up in a storm of criticism for allowing her son to accompany her on a government helicopter on their way to a family vacation.

‘Strong moral underpinning’

Baerbock, meanwhile, has turned around her public image after a series of blunders during the 2021 election campaign, coming across as clearer and more decisive than Scholz in her response to the Ukraine crisis.=

The 41-year-old former trampolinist has become the face of Germany at international summits, from the G7 to NATO, and in early May became the first German minister to visit Kyiv.

Habeck, meanwhile, has impressed with his dedication to weaning Germany off Russian energy.

And their meteoric rise is all the more surprising given the Green party’s traditional positioning as a pacifist party opposed to sending weapons to conflict zones.

For the first time in their 42-year history, according to Der Spiegel, the Greens are being judged not on “expectations and promises” but on their performance in government.

“The strong moral underpinning of the Greens’ policies and the fact they openly struggle with their own principles comes across as approachable and therefore very credible,” according to Münch.

“Of course, this increases their clout compared with the chancellor.”

She therefore predicts an “increase in tensions” between the Greens, the SPD and the FDP, with life not expected to get easier for Scholz any time soon.

By Mathieu FOULKES