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Issue #116

Issue #116

Guten Morgen! 

Welcome to another edition of the Krautshell! This week, the team joins you live from Munich (among other places), and we bring you a special double edition of our House’s View providing insights on some of key issues at the Munich Security Conference. In addition, our main articles discuss a government spat outlining key political differences between the German Liberals (FDP) and Greens, the rather disappointing (preliminary) results of Scholz’s big “tank alliance”, and some background and analysis into why Germany’s Liberals are – and could well remain – in deep trouble. 


Anna                                Christian


From Habeck And Lindner With Love

These days, a special pen friendship or maybe pen enmity has developed in Berlin. In the traffic light coalition, the main conflicts run between the two junior partners, the FDP and the Greens. Their respective leaders and vice-chancellors Lindner (FDP, finance minister) and Habeck (Greens, economics minister) are always in close personal exchange. When things don’t go anywhere, they stage a public power play. This week, Habeck wrote a letter to Lindner, complaining about the key points of the 2024 federal budget planned by Lindner. A reply from Lindner was not long in coming, both letters were leaked to the press. What is at stake?

The essential conflict concerns the necessary investments on the one hand (if the Greens have their way, especially for climate-neutral technologies and climate protection programs) and on the other hand the compliance with budgetary discipline, which is the core issue and raison d’être of the FDP. It is becoming increasingly clear that the programs the three parties agreed in the coalition agreement are too expensive if budget discipline is to be maintained at the same time. In addition, there are the new challenges and thus demanded additional spending by Chancellor Scholz and Minister of Defense Pistorius (both SPD) for defense in response to the war in Ukraine. Consequently, Lindner says everything cannot be implemented, so priorities must be set and calls on everyone to be disciplined. The Greens criticize: Lindner cuts mainly in the projects of the Greens, prestige projects of the FDP like a stock market-based pension or the continuation of subsidies, for example, for company cars or car commuters were not subject to “discipline” by him. A new power struggle has broken out in the coalition, which once again may have to be decided by the chancellor’s word of power.

Tank Coalition on the Rocks

Poor Chancellor Scholz can’t seem to get anything right on Ukraine. Last year, he caught flak for holding back on heavy weapons deliveries, despite Germany being one of Kyiv’s largest providers. This year has been all about tanks, and Scholz was in the headlines for delaying the supply of Leopard 2s from Germany and other countries. When he did finally relent on 25 January, the decision – far from gratitude – left a bitter aftertaste of reluctance among Berlin’s partners and allies. Now, in a strange turn of events, the German government has been forced to admit that the promised Leopard 2 deliveries are not going as planned, since several EU partners have surprisingly withdrawn their agreement to providing the German-made tanks. What’s going on?

The optics, for one, are awful. After being pushed from many sides to up the stakes by delivering tanks, Scholz looks like he has been hung out to dry by those who were pushing in the first place. Almost three weeks after “freeing the Leopards”, the planned tank coalition for two Leopard battalions (88 tanks) has become a serious embarrassment, with few formal commitments and both the Netherlands and Denmark reportedly withdrawing their participation. Asked whether he had any sympathy for countries that had first pushed Germany to deliver and were now having second thoughts, Defense Minister Pistorius said, “As I’m in a diplomatic arena right now, I would just say — not much.“ Main battle tank deliveries mark a major step in NATO participation in this war, and unlike Britain or the United States, Germany can’t withdraw across the sea in case of military escalation with Russia. With Moscow exploiting the “German tanks back in Ukraine” narrative and Germany struggling to provide Kyiv with the necessary military support, Scholz’s commitment puts him in a difficult spot. Once the smoke has settled, it will be up to historians to discuss whether this was a smart move or not.

German Liberalism on the Ropes

Lenin once said: “If Germans ever stormed a train station, they’d buy platform tickets first.” What sounds like a joke actually reflects Germany’s historical Recht und Ordnung (“rules and order”) reputation and helps explain why liberalism has had such a tough stand in the Land of Poets and Thinkers. It isn’t always true – Germany’s post-WWII economy was developed by liberals like Erhard and Eucken, after all – but it certainly has been for a time, and the Free Democratic Party’s (FDP) demise is an interesting case in point. Let’s have a closer look.

The FDP has traditionally performed a bit of a balancing act between political camps, being center-right in outlook but uncomfortable with the more dogmatic social conservatism of parts of the CDU/CSU. One thing it has never been is left-wing. Following the 2021 elections, however, FDP chief Christian Lindner took a fateful gamble and joined a coalition with the Social Democrats (SPD) and Greens. The logic seemed sound in theory: With the Finance and Justice Ministries under their belt, the FDP could balance the “worst” of the left-wing “excesses” and provide a strong liberal voice to Germany’s government. Five disastrous state elections later, and the political pundit class is struggling to understand how the charismatic Lindner’s Liberals have fallen so far, so fast.

The answer could be surprisingly simple: The FDP’s voter base is traditionally conservative in outlook and rejects Lindner’s complicity in (and acquiescence to) Scholz’s left-wing policies. On the economy, the FDP-led Finance Ministry has overseen the largest debt increase in modern German history. On Covid, the FDP-led Justice Ministry has allowed the government to impose restrictions on civil liberties long after most other countries had dropped them, breaking a promise to voters in the process. And on social policy, the FDP has pushed a controversial “Self-Determination Act” allowing people 14-years-old and up to change their gender once a year and criminalizing so-called “deadnaming”. Voter support for the FDP has roughly halved (from 10 percent) since the 2021 election, and the next federal election is still two years away. How low might they go?



By Mats and Jonny

The Double House’s View: Lots to Do in Little Munich

This morning, I’m reaching you from the Bavarian capital of Munich, where the world’s premier geopolitical/security conference is taking place: the Munich Security Conference (MSC). This year, the conference enters its 59th edition, and for the first time, it is taking place at the same time as a war on European soil. The city is in complete lockdown: the whirr of police helicopters in the air, security checks on every street corner. You really feel like you’re in the middle of something monumental. Government leaders, company CEOs, NGO representatives, and geopolitical academics have all flocked to the city at the base of the Alps to hopefully put a dent in the mountain of issues that burdens the world today: war, famine, cyber threats, geopolitical tensions, and migration just to name a few. 

For weeks, my team and I have been preparing for this conference of conferences, and all this preparation has allowed us to gain some insights into what the hot-button issues will be. So, we want to take this opportunity to reflect a bit on what will be discussed over the next three days. Specifically, as proud geopolitical and history nerds, the overall temperature of transatlantic relations and European defense policy are two aspects we want to dive deeper into. 

If you’re particularly astute, you will have noticed I’m using the plural here. I say WE because this week we’re giving you not one but TWO House’s Views on the topics of the MSC. Mats will get us started.

Mats’s View: Pussyfooting around the Transatlantic Relationship

Despite what political leaders might have you think, the transatlantic relationship is ill. Yes, the US and Europe have come together to express their solidarity for Ukraine, but that seems to be the only thing the two sides can currently agree on: the Russian war of aggression is atrocious. My whole life, the transatlantic relationship has been a bedrock of stability – globalization was in full swing, and both sides recognized the multiple benefits that come from working closely together. But the façade is crumbling.

We’ve reported in the Krautshell on the numerous battles raging on between the two sides on everything from the response to China to tech policy. European governments are skeptical of American national interests and the US is pissed that Europe sets up regulation that almost exclusively affects American companies (especially large ones of the tech variety). I see these skirmishes as little league. Both sides are entrenching themselves, focusing on minute details, all while losing sight of the bigger picture.

We’re entering a new world in which the US’s power is on the decline, and, to put it bluntly, Europe is a museum. China is continuously on the rise, and Russia has shown it has no reservations about imposing itself through violence. Both sides have agreed that they are in an “us” vs “them” world at the moment, but they can’t really decide what the “us” is. Just to give an example: back in 2019, French President Emmanuel Macron described NATO as almost “brain dead,” now it’s his only hope to keep Europe’s and the US’s way of life as is. I really do believe collaboration is the only way forward. 

Who Will Trust First?

The combined genius of the best minds in Europe and the US are, in my opinion, unbeatable. My wish for this year’s MSC: think less about national or continental boundaries, and think more about philosophies. I hope politicians increasingly ask themselves the question: who shares my vision of the future? Who shares my view on how to get to a successful future? I can assure you, there are plenty of those like-minded people in the halls of the Bayerischer Hof this weekend. Once European, US, or any other international leaders for that matter stop looking for reasons to distrust one another, we can let the real collaboration begin. 

Jonny’s View: The Acid Test for Germany

Thank you, Mats, for the apt insights from the MSC. Yes, all differences aside, action should be taken. What might that look like and what is Germany’s role in it? Less than a year after the start of the Ukraine war and the “Zeitenwende” heralded by Chancellor Scholz, we must first look inward before we can consider how to act outward. The problem concerning the turn of the times (“Zeitenwende”), the more self-confident foreign and security policy and a stronger German leadership role are unfortunately the Germans themselves. It remains to be seen whether this country will reward a policy that does exactly what is supposedly required. On the one hand, people here are prepared to confront Russia economically and support the corresponding policy decisions. Paradoxically, on the other hand, the same majority wishes that German foreign policy had been more restrained in this war. Does German angst strike again?

Maybe Not in NATO, But At Least in Europe?

NATO’s leading role belongs to the U.S., and that is unlikely to change. But Germany has room for maneuver (no pun intended) in Europe. The tank coalition has shown how not to do it. Our allies pressured us for tank deliveries until Chancellor Scholz finally relented. Now, it is primarily the European partner countries that are suddenly going: we can’t deliver, a large part of the tanks is not operational and so on. Does Germany lead so little that we are denied leadership when we finally make a decision?

It is especially Eastern Europe where Germany should finally recognize potential. These countries see themselves as particularly affected by the current war and in some cases even openly doubt German support should they be the next to be hit by Russian aggression. Recognizing the partners in Eastern Europe on an equal footing and supporting their interests in NATO would be a natural leadership role that Germany can take. Also, the European states must harmonize their weapons procurement systems. Here, too, Germany, with the strongest arms industry, can make a push – why not dictate to the others what they have to procure? Or, at any rate, better coordinate the votes.

House’s View (Part 2)

It fails at home. Foreign and security policy are still as popular topics in Germany as a visit to the dentist. The German Bundeswehr is a parliamentary army and every deployment must be mandated by parliament. Nevertheless, we only ever discuss it when it comes up. What exactly the German Bundeswehr is doing in Mali and what goals we are pursuing there is probably known to only a fraction of Germans. And you can’t even blame them. As long as we don’t give the issues the prominence they demand at home, we won’t be able to lead anything outside Germany either.


  • Grande Vienna: While Finance Minister Lindner is not happy to spend German taxpayer money (read above), he had no problem that his Austrian colleague booked him a VIP lounge at the Vienna Opera Ball for a total of €30,000 – paid for by Austrian taxpayers. This author’s highlight of the Ball, however, was VIP guest Jane Fonda who, when asked if she was planning to come to Vienna after the Ball again, said: “I’m 85 years old, maybe I’m dead tomorrow” – cheers to cynics in difficult times.
  • Grounded: Around 300,000 passengers won’t fly today in Germany. The labor union Ver.di initiated strikes to increase pressure on the collective bargaining for pay rises. And they threaten even more: this would only be a “pre-taste” of what might be coming if their demands are not met.
  • Farewell: This week, the Scottish Prime Minister Nicola Sturgeon resigned after a long fight about cultural conflicts. She introduced a reform with cross-party support to make it easier for people to change their gender. This was heavily opposed by major parts of her own party – opposition of which she seems to have had enough now. Now, the race for her succession is on. Read more here.