Dispute in the traffic lights: Traffic lights argue about the right economic policy

Germany’s economy is in crisis – and the way out of it is increasingly becoming a contentious issue for the traffic light coalition. The main struggle is to find the right measures that could stimulate the sluggish economy again. Two events next Tuesday will also provide an insight into the tense atmosphere within the coalition. After Chancellor Olaf Scholz (SPD) invited people to an industrial summit, the FDP organized a “top-level economic policy discussion” with important association representatives.

Chancellor calls for unity

Scholz called on everyone involved to pull together. “It has to be about a lot of cooperation,” he said during his visit to India when asked by a journalist about the different initiatives in his government for economic aid. “We have to get away from the theater stages. We have to get away from presenting and suggesting something that is then not accepted and accepted by everyone.”

Mismatched concepts

Federal Finance Minister Christian Lindner criticized on ZDF that recent economic policy initiatives by Chancellor Scholz and Economics Minister Robert Habeck (Greens) had not been coordinated. The FDP leader called for a quick decision on direction. It will show “whether we can come together as a coalition,” he said on ARD. This fall, clarity must be created as to “which direction this country is heading in terms of economic and financial policy.” Otherwise economic development would be further damaged.

“No, Mr. Scholz’s suggestions were not coordinated and neither were Mr. Habeck’s,” said Lindner on ZDF’s “Heute Journal.” “We talk to each other, but I don’t know about these proposals. And that in itself is a problem.”

What Lindner didn’t say: The FDP presidium also constantly produces papers on economic policy and other issues without first discussing this with the coalition partners.

Lindner versus Habeck

Habeck had previously proposed stimulating the economy with a debt-financed state investment and infrastructure fund. According to his ideas, companies should receive ten percent of all investments reimbursed by the state through a Germany fund.

Finance Minister Lindner rejected this. “In detail, according to an initial rough calculation, the concept would cost 48 billion euros per year including all deadweight effects,” he said on the sidelines of the annual meeting of the International Monetary Fund in Washington. The German debt level would then rise by one percentage point every year – so the concept would contradict European fiscal rules. “We therefore advise not to pursue this plan any further.”

Lindner also questioned whether it makes sense for Germany to, on the one hand, demand the highest taxes in the world from its companies and then compensate for the lack of location quality with flat-rate investment support.

Two conferences – one topic

Chancellor Scholz announced an industrial policy offensive in the Bundestag last week. He wants to meet with representatives from companies, unions and associations at an industrial summit in the Chancellery. Measures should be explored “so that we can march forward together,” said Scholz on the ZDF program “Maybrit Illner”. The meeting is scheduled for Tuesday afternoon. Economics Minister Habeck is not invited to the summit, but is calm about it. “I don’t need a summit now. I’m constantly climbing mountains,” he said in the Indian capital New Delhi. He is in daily discussions with the business associations.

In the morning, FDP parliamentary group leader Christian Dürr and party leader Lindner want to discuss the same topic with top representatives of business associations. The presidents of the Federal Association of German Employers’ Associations, the Central Association of German Crafts and the Federal Association of Liberal Professions, Rainer Dulger, Jörg Dittrich and Stephan Hofmeister are expected. The general manager of the German Chamber of Commerce and Industry, Martin Wansleben, and the executive board member of the Association of Family Businesses, Reinhold von Eben-Worlée, will also take part.

The FDP event was “rather complementary” to the Chancellor’s appointment, said Lindner in Washington. “Because the German economy is not just industry, it is also medium-sized businesses, crafts and freelance professions.”

Loyalty to the coalition on one condition

In recent months there has been repeated speculation about an early end to the coalition due to the many arguments at the traffic lights. On ZDF, the finance minister countered the impression that he sounded like an opposition figure. “If everyone wants to stick to the coalition agreement and its spirit, then I have no intention of ending a government coalition.”

But one thing is clear: “If what the country needs becomes more urgent and what is politically achievable becomes smaller, everyone has to lay their cards on the table.” In the ARD “Tagesthemen,” the finance minister said that they would have to talk to each other after his return. “Are our similarities so great that we can solve the country’s problems? I hope so.”

Scholz to traffic light partners: Don’t hit the bushes

Scholz acknowledged difficulties in the traffic lights, but called on the partners to continue working until the end of the electoral period. Anyone who has been given a mandate to govern by the citizens must fulfill their tasks, he said in the ZDF program “Maybrit Illner”. That is a duty. “And no one should just fall into the bushes. That’s certainly not my style.”

When asked in New Delhi whether the traffic light partners still work well together in view of the diverse economic policy proposals, Vice Chancellor Habeck said: “Absolutely. We do.”