Germans elect a new Bundestag on September 26. Outgoing chancellor Angela Merkel is not seeking reelection after serving four terms. Her center-right Christian Democratic Union (CDU) is polling in first place, but the left-wing Social Democrats (SPD) and Greens are not far behind.
Three more parties (counting the union of Merkel’s CDU and Bavaria’s Christian Social Union as one) are expected to win seats: the center-right Free Democrats (FDP), the far-right Alternative for Germany (AfD) and the far-left Die Linke.
The outgoing “grand coalition” of Christian Democrats and Social Democrats may not defend its majority. More importantly, neither wants to form another two-party government after sharing power for twelve of the last sixteen years.
All other parties rule out pacts with the AfD. The Greens, who are projected to be the biggest winners of the election, would be needed in all possible coalitions:
- Union + Greens + FDP: Failed in 2017, when the liberals balked. Could be a modernizing, pro-EU government that seeks technological solutions to the climate crisis.
- Union + SPD + Greens: Less attractive to the Christian Democrats on labor and tax policy, but the Union and SPD see eye to eye on protecting industries and jobs.
- SPD + Greens + FDP: Makes less sense for the FDP, who would face opposition from the center- and far right.
- SPD + Greens + Linke: Politically risky for SPD and Greens, who want to appear moderate, and difficult policy-wise on defense and foreign relations.
Here’s where the four mainstream parties stand on ten of the issues at stake in this election.
Budget and taxes
The Greens would relax Germany’s debt break, which limits structural deficits to .35 percent of economic output, in order to finance investments in infrastructure and schools.
The Union and FDP oppose taking on more debt. The former would even use windfalls to pay off Germany’s debt — 60 percent of GDP — faster.
The Greens would raise taxes on the highest incomes as well as tech giants like Facebook and Google. The Union wants to cut taxes on businesses, from 30 to 25 percent, and on low and middle incomes.
Climate and energy
Germany struggled to cut emissions 40 percent from 1990 last year and only met the target thanks to the COVID-19 pandemic. The outgoing coalition of Christian Democrats and Social Democrats is committed to reducing Germany’s emissions 65 percent by 2030 and achieving carbon neutrality by 2045, five years ahead of the EU’s schedule. But that will require reforms, particularly in energy.
Merkel’s decision to phase out nuclear power has raised the country’s reliance on coal and natural gas. Renewables are enough to power Germany for just eight days out of the year. No smart grids exist to bring wind-generated power from the north of Germany to the industrial west and south. With coal being phased out as well by 2038 — billions of euros have been earmarked in compensation for affected power companies — Germany will need to import electricity from its neighbors during peak hours from 2030.
The Union and SPD want to stay the course and avoid more disruption to fossil-fuel industries.
In addition, the Christian Democrats would:
- Ease planning laws to accelerate the construction of new solar and wind installations.
- Invest in biomass, geothermal and hydropower, particularly in rural areas.
The Social Democrats aim to be fossil-free by 2040 but are short on details.
The Greens have the most far-reaching plans:
- Cut emissions 70 percent by 2030.
- Bring the coal phaseout forward to 2030.
- Use only renewables by 2035.
- Build 1.5 million solar roofs in the next four years.
- Increase the carbon price from €25 to €60 per tonne from 2023.
- Ban the export of unrecyclable plastic waste.
- Push for an EU-wide deposit return scheme for bottles and cans.
The Free Democrats have more faith in innovation, including chemical recycling, which they would legalize. They would get rid of all energy subsidies, including for renewables.
The Christian Democrats want to raise German defense spending to 2 percent of GDP, as agreed in NATO, by 2024. The FDP would go to 3 percent. The SPD and Greens don’t see the need to meet the target.
The German military is chronically underfunded to the point where it is barely combat-ready. Not one of Germany’s six submarines is able to leave port. Fewer than half of the Bundeswehr‘s 244 combat tanks are operational. Munitions and spare parts are lacking.
All four parties support closer defense union in Europe.
Germans are terrible technophobes. Their 4G mobile network is one of the worst in Europe. Cash still accounts for 75 percent of transactions. Few stores allow card payments under €10.
The pandemic made clear just how far Germany lags behind. Health authorities had to fax in their updates to Berlin. Home-schooling and -working were handicapped by a lack of computers and absence of high-speed Internet. Half of German schools don’t even have Wi-Fi.
All parties now call for investments in digitalization with the Christian Democrats setting a goal of nationwide 5G by 2025. But many of the ambitions are paired with a desire to regulate and tax American big tech. That will be easier for Germany’s tech-wary politicians to do than dragging their voters into the twenty-first century.
Economy and business
The World Economic Forum has downgraded Germany from third to seventh place in its competitiveness index. Capital and regulatory requirements make it more difficult to start a business in Germany than in neighboring Denmark or the Netherlands.
All parties want to encourage business creation, but where the Christian Democrats would give startups a “bureaucracy-free” first year, the Greens believe the solution is more government financing. The liberals want to do both.
The Social Democrats would raise the minimum wage, introduced in 2015, from €9.90 to €12 per hour.
All four parties, like most Germans, support deeper EU integration, but the Christian Democrats and liberals are wary of “transfer union”: the permanent subsidization of poorer member states in the south and east by those in the north and west.
The SPD, Greens and FDP would transform the EU’s coronavirus recovery fund into a European Monetary Fund, but they see different roles for it. The first two want such a fund to be able to issue short-term credits, financed by the EU as a whole; the latter envisage an authority to monitor compliance with EU fiscal rules, which the European Commission has often refused to enforce.
All four parties would give the European Parliament the right to initiate legislation. Currently it can only debate and vote on laws proposed by the commission. The liberals and Greens call for transnational voting lists. Currently members of the European Parliament are elected nationally.
The Union and Greens would switch to majority voting in EU foreign policy. The Greens would also eliminate the need for unanimity in EU tax policy. The FDP is the only major party that opposes EU taxes.
Deutsche Bank reckons the country needs an additional one million homes. Housing prices have doubled in the last decade. Half the population rents, and rents have increased 35 percent.
Proposals reveal a traditional left-right divide: the SPD and Greens seek to rein in prices with rent controls; the Union and FDP call for more construction, including by relaxing planning laws and other regulatory requirements.
Although Germany was able to integrate more than one million refugees between 2015 and 2017 better than expected, the migrant crisis casts a long shadow. Almost all parties call for stricter immigration controls.
The German population is projected to shrink from 83 to 74 million by 2060. There would be eleven million fewer Germans of working age by then, but five million more retirees. A doubling of migration to 311,000 could stabilize the population.
The SPD, Greens and FDP would switch to a Canadian-style points-based system to encourage more skilled immigration. German law currently favors family reunification.
All mainstream parties want to encourage Germans to buy more electric cars and travel more often by rail than air. The Greens are by far the most aggressive, proposing to:
- Ban the sale of new polluting cars from 2030.
- Raise fuel tax from €1.27 to €1.43 per liter.
- Add a truck tax based on carbon dioxide emissions.
- Double use of public transport.
- Invest €100 billion in rail by 2035.
- Cut all airport subsidies.
- Tax domestic flights.
- Introduce a European kerosene tax.
Both the SPD and Greens want a third of German cars to be electric by 2030 and limit the speed on all highways to 130 kilometers per hour.
The SPD sees great potential for battery production and recycling to replace jobs that will be lost in fossil-fuel industries. The party also advocates a (desperately needed) European scheduling system to align train timetables. Everybody who’s ever tried to plan a European holiday by rail will be grateful if they can pull that off.
The Christian Democrats and FDP oppose banning diesel cars and reducing speed limits. Both believe synthetic fuels can replace kerosene and thus avoid the need to cut air travel. They do agree Germans should travel more by train. The Union calls for more public investment. The liberals would prefer to privatize Deutsche Bahn, abolish aviation taxes and allow autonomous vehicles and air taxis.
Germany gets about 40 percent of its gas from Russia; a share that is likely to grow as the Netherlands winds down production in Groningen. Merkel has resisted pressure from in- and outside Germany to pull the plug on Nord Stream 2, an expansion of the Baltic Sea pipeline that allows Russia to circumvent transit nations in Eastern Europe, like Ukraine.
Her successor as CDU party leader, Armin Laschet, is even more Putin-friendly. He has defended Russia’s support for the Syrian dictator, Bashar Assad; questioned evidence that Russia tried to poison defector Sergei Skripal and his daughter, Yulia, in England in 2018; and argued for improving relations even after assassination attempt of Russian opposition leader Alexei Navalny.
The Greens and liberals are more hawkish with the former arguing for a human rights-led foreign policy.