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German parties seal coalition deal to make Olaf Scholz chancellor

RavenSupreme

Well-Known Member
Social Democrats, Greens and liberals set to take over from Merkel.

BERLIN — Leaders of Germany’s Social Democrats, Greens and liberals clinched a deal Wednesday to form the country’s next government with Olaf Scholz as chancellor.

The new alliance will bring the curtain down on 16 years of conservative-led government under Angela Merkel, who did not run for another term in September’s general election. It is also something of an experiment: The trio of parties has never governed Germany together before and the country is used to two partners, rather than three, running the federal government.

The 63-year-old Scholz, finance minister in Merkel’s outgoing coalition, led the Social Democrats (SPD) to victory in the election as their candidate for chancellor. That put him in pole position to lead the next government, provided he could seal a coalition with the Greens and Free Democrats (FDP).

At a press conference in Berlin on Wednesday, leaders of the three parties announced they had reached agreement and unveiled a coalition pact running to more than 170 pages. Provided it is approved by the wider parties in the coming days, the next government should take office early next month.

The coalition deal aims to combine the main priorities of the different parties. It aims to raise the country’s minimum wage, as championed by Scholz and the SPD, and to please Greens by phasing out coal power by 2030, eight years earlier than previously planned. It also pledges to maintain fiscal discipline, a cause pushed by the FDP.

But the new government will take office in the midst of crisis, with coronavirus cases rising rapidly across Germany. Scholz acknowledged as much right at the start of the press conference.

“We still haven’t defeated corona. Day after day we are racing to new records,” he told reporters.

Scholz said the new government would ramp up the national coronavirus vaccination campaign and consider making shots compulsory for health staff and other essential workers.

“We must vaccinate and give booster shots to prevent the spread of the virus,” he said. “Vaccination is the way out of this pandemic.”

The coalition pact brings to an end nearly five weeks of formal negotiations, involving roughly 300 negotiators hammering out policy positions across 22 working groups. The teams worked behind closed doors, with party leaders repeatedly refusing to publicly reveal much about the talks.

From the beginning, the SPD, Greens and FDP — known as the traffic-light coalition, due to their respective colors of red, green and yellow — strove to appear civilized and optimistic at all times, attempting to contrast their talks with the messy and ill-fated 2017 coalition talks between Merkel’s conservatives, the Greens and the FDP.

Their efforts to put on a united front even led to some mockery in the German media, especially after leaders of the Greens and the FDP posted a to demonstrate their team spirit.

But the peace generally held, even though the FDP and Greens have never been considered natural allies, given the FPD’s free-market, low-tax ideology and the Greens’ focus on the environment and social equality.

Not always smooth sailing​

However, some disagreements did emerge from the talks.

Earlier this month, the Greens complained of a lack of ambition in the coalition’s climate policies, prompting them to put pressure on the SPD and FDP. That logjam broke on Tuesday when the three parties agreed to phase out coal by 2030.

Meanwhile, FDP leader Christian Lindner is expected to become the new finance minister, a key requirement for selling any deal to the liberals’ base. Giving Lindner that post amounts to a significant compromise by the Greens, given their advocacy for looser fiscal rules in Europe.

In return, the Greens are expected to be rewarded with two major ministries for their own leaders, Robert Habeck and Annalena Baerbock. Habeck is in line for a new economy and climate ministry while Baerbock is expected to take over the foreign ministry.

Before oaths of office can be taken, the deal will first be put to the wider parties for consideration. The Greens plan to consult their members about the pact, while the SPD will vote on it at an extraordinary party conference scheduled for December 4. The FDP plans to do the same at a party conference on December 5.

If all parties approve, they will be done in time to have Scholz elected as chancellor in the week starting December 6, sticking to the parties’ intended timeline — and just days before Merkel to become the country’s longest-serving post-war chancellor on December 17.

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The big and important things are climate, foreign policy and finances.

The coalition claimed their program is "the most ambitious climate program of any industrial nation"(Lindner during the press conference). Coal exit to be reached preferrably at 2030 instead 2038. Renewables officially becoming the general energy providers with making up 80% of the energy mix. Various other policies (e.g. 15M electric cars till 2030 (so a multiplication of 15 times going by current numbers).

Foreign policy: Returning back to an active foreign policy - focusing on not only the EU, USA and China but a heavy look on future hop topics like SA emerging markets and East Asia markets (Indonesia, India, Malaysia...) as well as Africa. For that: The Army will get armed drones - therefore ending a year long debate about whether to get them or not. In addition: Yes to the Nuclear Deterrent and NATO responsibilities.

Finances: Probably one of the most important parts. Surprisingly little details yet. However. 12 Euro minimum wage, investing into 400.000 new apartment complexes, starting a stock-pension fund - and this is supposed to be done just in 2022. Thankfully no tax increase for inheritance or whatever (my retirement plan is save :skully )

All in all after many years the new german coalition has active ambitions to shape things anew. Not just mix up little details but look to get things done. It sounds very promising honestly.
 

dergeist

Well-Known Member
Finances: Probably one of the most important parts. Surprisingly little details yet. However. 12 Euro minimum wage, investing into 400.000 new apartment complexes, starting a stock-pension fund - and this is supposed to be done just in 2022. Thankfully no tax increase for inheritance or whatever (my retirement plan is save :skully )

Stock pension fund sounds neat, large pension funds are forced to hold bonds which yield a pittance and they'll suffer crlonsequences. For a conservative (Thatcherite) government we have shit policies when it comes to encouraging markets and commerce. It seems these guys are planning on doing something right.

Although, they've got something bigger to deal with (EU nations debt have exploded) and may only last one term.

 

dr_shadow

Moderator
Moderator
If all parties approve, they will be done in time to have Scholz elected as chancellor in the week starting December 6, sticking to the parties’ intended timeline — and just days before Merkel to become the country’s longest-serving post-war chancellor on December 17.

Can't they stall a little bit to let Merkel beat Kohl? When she's so close?
 

blk

Well-Known Member
I like Germany's aggressive approach towards decarbonization & sustainability.

The quicker it is accomplished the larger will be the returns.

Wish all countries did that.

Tho i don't like their opposition to nuclear (since it's just as clean, if not more, as renewables.. and I recall they had to ramp up coal use after they Clos down one of their nuclear plants or something), but don't know if the popular & political sentiment on it is still negative.


Stock pension fund sounds good.

EU economies are undercapitalized compared to the US (that is overcapitalized).
We need to invest more into our own companies.



Also i don't know about these parties but i hope they'll continue to push for further European integration (working towards that sweet EU federal state dream) :catsleep
What's their stance on this @RavenSupreme ?
 

dergeist

Well-Known Member
We need to invest more into our own companies.

Taxation in this part of the world makes starting a business here less viable and investors less likely to invest. You make capital gains after you sell you pay taxes here, in the US they allow you to stall payments so you can compound wealth. In the US you can invest in startups and use transfer your shares to tax efficient accounts, so you can avoid capital gains. The US incentivises capitalism, Europe (UK included) somewhat punishes you for saving your hard earned money and investing it. Also, the barriers they erect (don't get me started on that).

We need to change our market structures and building regulations and all this to maximise potential.
 

Pliskin

Well-Known Member
I lowkey enjoy the market liberals party turning around immediately and going at the CDU as the most irresponsible spenders.

It's really cathartic to see conservatives get gaslit with the same budget argument we got ad nauseam.

10/10, good coalition.

Also, Greens screwed themselves over by avoiding 'hard' ministries imho, at the end of the day power is power, not just popularity.
(might be a good long play for the chancellorship in 4 years, but still ...)
 

Pliskin

Well-Known Member
Tho i don't like their opposition to nuclear (since it's just as clean, if not more, as renewables.. and I recall they had to ramp up coal use after they Clos down one of their nuclear plants or something), but don't know if the popular & political sentiment on it is still negative.
What's their stance on this @RavenSupreme ?
Every country has topics where the cultural collective is pretty retarded. For some countries its really really dumb opposition to Gun Regulation and a pathological fear of health care that is free at the point of service,

for us, it is really really dumb opposition to Speed Regulation on the Autobahn and a pathological fear of any technology that was featured in scary cold war era movies.
 

blk

Well-Known Member
Taxation in this part of the world makes starting a business here less viable and investors less likely to invest. You make capital gains after you sell you pay taxes here, in the US they allow you to stall payments so you can compound wealth. In the US you can invest in startups and use transfer your shares to tax efficient accounts, so you can avoid capital gains. The US incentivises capitalism, Europe (UK included) somewhat punishes you for saving your hard earned money and investing it. Also, the barriers they erect (don't get me started on that).

We need to change our market structures and building regulations and all this to maximise potential.

I don't know about that.

I'm not familiar with US taxation but even here (at least in Italy) capital gains & dividends are treated better than job income for example.
Since the former are taxed at a fixed rate of 26% while the latter have progressive tax that can easily surpass the 26% on "capitalistic" type of income.

So it would seem to me that increasing income from capital is more incentivized than increasing income from a job, after a certain point.


I would argue that it's more a cultural tendency than a real evaluation based on taxation systems and whatnot. Since most people don't invest in financial markets, they don't even know about the specifics about taxation.

In Italy almost everybody are about houses/real estate instead. That's where most of the wealth of families is parked on.

And i'm not sure about your claim on the tendency of savings, since the US median wealth per adult is less than in most european countries

(of course their mean wealth is much higher cause they have all the billionaires pretty much, but talking about the common folk it doesn't seem they have much of an advantage)

Despite that people in the US have more income on average (even adjusted for cost of living it seems).



Every country has topics where the cultural collective is pretty retarded. For some countries its really really dumb opposition to Gun Regulation and a pathological fear of health care that is free at the point of service,

for us, it is really really dumb opposition to Speed Regulation on the Autobahn and a pathological fear of any technology that was featured in scary cold war era movies.

Yeah and the fun thing is that we have tons of nuclear plants next door in France anyway lol (if people are scared about nuclear accidents etc)

In Italy it's the same as Germany, we had not one but two referendums where people voted out nuclear power..... a shame.
Tho lately there has been renewed interest on it cause of the G20 & COP26 climate talks, green transition and whatnot.
 
I really do firmly believe that Germany is the best country in europe

no matter how many setbacks, they continue to alway rise back to the top
 

dergeist

Well-Known Member
don't know about that.

I'm not familiar with US taxation but even here (at least in Italy) capital gains & dividends are treated better than job income for example.
Since the former are taxed at a fixed rate of 26% while the latter have progressive tax that can easily surpass the 26% on "capitalistic" type of income.

Capital gains taxes are generally off putting, you take the risk and you pay for benefitting:scust

Anyway, I was saying you can delay paying your capital gains taxes for years on end in the US. People do it when they flip properties so it allows accumulation of wealth (that which you would be taxedisi reinvested). Then at a certain point you have to back pay.


So it would seem to me that increasing income from capital is more incentivized than increasing income from a job, after a certain point.

As it should be, but they should allow deferred taxation.


I would argue that it's more a cultural tendency than a real evaluation based on taxation systems and whatnot. Since most people don't invest in financial markets, they don't even know about the specifics about taxation.

The capital gains tax isn't exclusive to financial markets, tbh, it's for all appreciation on capital. Not sure about Europe but you get leeway for your residential abode.


In Italy almost everybody are about houses/real estate instead. That's where most of the wealth of families is parked on.

That's understandable, since it's an extremely conservative safety play.

And i'm not sure about your claim on the tendency of savings, since the US median wealth per adult is less than in most european countries

(of course their mean wealth is much higher cause they have all the billionaires pretty much, but talking about the common folk it doesn't seem they have much of an advantage)

Despite that people in the US have more income on average (even adjusted for cost of living it seems).

I'm not talking about savings, I'm talking about acquired assets. The US economy is actually heavily debt driven, but the accumulation of assets is insane. The debt driven economy allows one to write off against taxes, which is another benefit to the capital accumulator.

I can't post the whole article, but it's worth a read.

U.S. household wealth jumps to record $136.9 trillion, Fed says​



 
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