Guten Morgen!

By God, we have a coalition agreement! This week the SPD, FDP, and Greens revealed the long-anticipated coalition treaty, and boy is there is a lot to unpack. We started by looking at the European topics in the document, then did a deep-dive into the overarching themes, and ended with an insightful WOOM on Germany’s likely future Außenminister, or Secretary of State. Happy reading, and as always, ping us for more!

Anna                                Christian

What about EU Politics?

While you can read more about the whole coalition treaty in the House’s View by Mats, let me give you a short introduction into the traffic light coalition’s (“Ampel”) priorities in EU politics. The new government wants to develop the EU into a “European federal state”. More integration seems to be on the way. Furthermore, the new government wants to make more use of the term “rule of law” as a form of leverage. While Angela Merkel (CDU) was reluctant to hold states like Poland or Hungary accountable for the weakening of their judiciary, the partners of the new coalition are for instance willing to tie EU payments in the recovery fund to the status of the rule of law in a country.

Furthermore, the new government wants to abolish the unanimity principle in matters of EU foreign policy. Accompanied with that, they want to transform the role of the EU’s “High Representative of the Union for Foreign Affairs and Security Policy” into a “real” EU foreign affairs minister. Also, in security politics the traffic light coalition aims for more EU power. While aiming to obtain NATO structure and competencies, they want to establish “common command structures and common civil-military headquarters” for the EU. Lastly, the traffic light coalition will probably take on a more distanced approach towards China than the Merkel-government did.

EU Discussions About Taxonomy 

The fact that when I hear the word “taxonomy” I think of the EU rather than plants or animals tells you everything you need to know about my affinity for biology in high school. Nonetheless, let’s have a brief recap of what exactly it means in a political context. Speaking simply, the EU taxonomy is our categorization list of different energy forms into “sustainable” and “baaaaaaad”. What’s the catch? Currently, the EU member states and the EU Commission are involved in a discussion mainly about nuclear energy and gas. While the new German government, especially the Greens, wouldn’t be pleased to label nuclear as “sustainable”, France is doing everything they can to bring the Commission to recognize it as such in an upcoming legal act in December. This was postponed, enabling the new German government to have a say in the process.

France still receives major parts of its national energy mix from nuclear power plants. And they want to continue building new ones, for which the classification in the EU taxonomy is important. And while Germany points the finger at France regarding nuclear energy, we suddenly become really quiet when it comes to (natural) gas. Hefty subsidy regulations are linked to the taxonomy categorization but still, a negative categorization does not necessarily spell the end for a technology. However, many financial institutions are already adjusting their investments according to the awaited EU taxonomy categorizations. And there are actually many who don’t want nuclear energy and gas being labelled as “sustainable” for reasons of long-term planning security. If you are investing over here, we’d love to keep you posted about how this plays out.

Brussels Sets its Sights on Political Advertising

While on your side of the Atlantic, you might hear “election interference” and roll your eyes thinking “that’s SO 2016,” we over here in Europe are only really getting to the issue now. On Thursday, the European Commission published a proposal for a regulation governing transparency in political advertising. Broadly, this new proposal seeks to protect the electoral process from interference through certain targeted ads.

So, what’s in the proposal? First, the scope: this regulation only applies to paid political advertising. Also, the Commission is not banning targeted advertising altogether, but rather limiting how individuals can be reached. For example, using ethnic origin, religious beliefs, or sexual orientation to identify a target group will be outlawed. When target groups are used, these need to be displayed, so get ready to see that you’re being targeted because you looked at a great deal on toasters three years ago. On the platform side, Facebook, Google and co. will be obligated to disclose who bought which ads with what amount of money. While this seems quite straightforward, we know all too well that politics never are. Critics are already pointing out that the regulation, in its current form, is not clear enough regarding what falls inside and outside of the scope. For example, you can target someone in the “outlawed groups” listed above if you are a foundation, association, or non-profit body with a political aim, given you are targeting your own members. Essentially: a very wide loophole for crafty organizations who want to get their message out at any cost. As with many other policy areas, the EU is hoping it can get the regulatory mix just right to set an international standard for other countries to follow. Is that the sweat of Russian hackers I smell?

Quelle: Twitter Wahlen_DE

by Mats

Green Light for the Traffic Light Coalition: What does the Next German Government Have in Store?

Five weeks of negotiations, 22 working groups, and more than 300 specialist politicians later, this Wednesday the so-called “traffic light coalition” of the Social Democratic Party (SPD), Free Democratic Party (FDP), and Greens presented their 177-page coalition agreement (we’re sorry, only in German) under the slogan “Dare More Progress: Alliance for Freedom, Justice, and Sustainability.” As a next step, the Members of the individual parties need to approve the document, which should happen over the next two weeks. In the meantime, we want to take you through some of the meta-level “Querschnittsthemen,” or cross-cutting issues. If you want to hear more detail about your specific area of interest, be sure to reach out to us.

Strategic Sovereignty and International Cooperation: A Tightrope Walk

Currently, Germany (and Europe) is heavily pushing the concept of “strategic sovereignty” or “strategic autonomy.” Regardless of what you call it, the idea is the same: Germany wants to reduce its dependence on foreign actors in key sectors like digital technology and security & defense, and the coalition treaty clearly reflects this effort. However, and this is decisive: sovereignty is not synonymous with isolationism. The traffic light parties have made clear that cooperation with international partners is key to the country’s success, but Germany needs to do a better job at setting the agenda. Let me give an example. For reasons we won’t get into here, data transfer between Europe and the US has been on unsure legal footing over the past year and a half. Given the harmful impact this legal uncertainty has on business relations, the three parties have stated in the contract that they will strive for an agreement with the US that reflect European data protection standards. This sends a clear message: we’d love to collaborate, but if it’s not on our terms, no deal. The same goes for a “renewal” and “dynamization” of transatlantic relations, which the traffic light parties want to craft in a “European way.”

Sustainability, Sustainability Everywhere!

This upcoming government is clearly moving away from pigeonholing green policy as its own, freestanding policy area. As one of the coalition partners is the Green party, few will be surprised that sustainability plays a major role across many parts of this document. Just to give you an idea, the word “sustainable” (German: nachhaltig) appears in the document 101 times. Whether mobility, agriculture, energy production, tourism, supply chains or most other policy areas, this next government will closely examine if and how these activities fit in with Germany’s ambitious climate protection goals. For example, the next government will implement strict sustainability standards for federal IT procurements and support a uniform CO2 minimum price with European and international partners.

Streamlining the Infamous German Bureaucracy

Finally, something that was hard to miss during the reading of this agreement was the frequency with which the parties promised a reduction in bureaucracy. Likely pushed forward by the FDP, the future governing parties want to streamline various processes in the infamous German bureaucracy to foster innovation and dynamism. For your company, this (hopefully) means that processes will be simplified and wait times for decisions will be reduced. To cut red tape, the coalition agreement promises the introduction of a law to reduce bureaucracy (German: Bürokratieentlastungsgesetz) to ease the burden on businesses and administration, and a “systematic procedure for reviewing the bureaucratic burden of laws and regulations.” This procedure also promises to involve stakeholders, including industry, in this regular review.

The House’s View

We could talk about the granular details of the coalition agreement all day, but overall, we can say the document is what you would expect from a partnership of three progressive, liberal parties. Each party left their clear mark on the contract, which is also explicitly reflected in the title. Beyond what we’ve already mentioned, for this upcoming government, you can expect heavy investment in digital- and green projects, more emphasis on European cooperation, and a wave of socially liberal policy initiatives (legalization of recreational marijuana, easier path to citizenship, LGBTQIA+-friendly policies). Reach out to us with any questions you might have.

• Battle for Cows, Chickens, and Pigs: The Greens already announced who they will fill their ministries in the government with. The last ministry to be decided was the Federal Ministry for Agriculture. And it was a real battleground between more-lefty Anton Hofreiter from Bavaria (popular in the Green party) and more-central Cem Özdemir (popular with many Germans). Özdemir, the man from Baden-Wurttemberg with Turkish roots, won the race but we heard that inside the party it got nasty.
• The King’s Speech: Traditionally, one of the most popular actors in German politics is the government’s spokesperson. Steffen Seibert, who served Angela Merkel in this job, said goodbye this week. His successor and the future voice of Olaf Scholz allegedly will be another Steffen: this time his surname is Hebestreit. Hebestreit is a long-time confidant of Olaf Scholz. Fun fact: with that, we will have had more people in this job called Steffen than women…
• Sad Numbers: This week, Germany reached the 100k mark in people who died in relation to Covid. While the political sphere had some glamour with the new government this week, the medical reality in the country isn’t looking good at all. Record high infection numbers, record high death counts. Not much to be joyful about on our road to Christmas.

Wonder Woman Annalena 

How come? Last Thursday, in time for Thanksgiving, that lefty-green-liberal coalition delivered their coalition treaty and the Germans can harvest “the transatlantic partnership and friendship with the USA as a central pillar of our international action.” Cheers to our old alliance!

Maybe it was because of her, Ms. Baerbock. With that treaty, our designated foreign minister Annalena Baerbock, not a big fan of the Russian or Chinese style of roasting human rights, will have a tasty recipe for a bolder Germany on the world’s plate. While Erdogan-critic with Turkish roots Cem Özdemir will become chefminister for agriculture, the coalition stuffed its coalition turkey with lots of concerns about too few servings of democracy, rule of law, human-, womens’-, minority-rights. Ethical international affairs have always been difficult to hold up. If Minister Baerbock can, however, she will certainly have the potential to become a new Wonder Woman.

Does she have that superpower in her? I think: Oh yes! Annalena Baerbock had a difficult year. She had to endure a few punches below the belt during the campaign, was held responsible for Olaf Scholz’s rise and has been facing a power-cancel-culture within her party. Her Co-Chair of the Green party, Robert Habeck, took over the role of the strong negotiator, securing himself the Vice-Chancellery and the “Superministry” of Economics and Climate. He will surely become the green Hulk while Baerbock no loger appears to be the unbeatable bear she still was some months ago.

But she will come back, bigly! I have seen and admired her resolve, e.g. when she stood her ground in front of enraged coal miners losing their jobs because of the changes pushed by the Greens. As a matter of fact, that coalition treaty reads like some fights are about to come up on foreign affairs. The partners for battle are chosen with a pledge of allegiance to the USA and a stronger EU. Given President Biden is in need for some wins in foreign affairs, and our new foreign minister is starving for a fight, I bet she will turn the tradition of a Merkel-Chancellery managing foreign policy into a Scholz-Chancellery watching her and Biden kicking ass, soon, avenging herself on all toxicity, far beyond coal. I can see it in her eyes.