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An even greener Germany?

Angela Merkel has been Chancellor for 16 years and has said she will not run again for that office. What does this mean for Germany and the EU?

Angela Merkel has been Chancellor for 16 years and has said she will not run again for that office. What does this mean for Germany and the EU?

by
Charles Stanley

in Features

14.04.2021

At the end of September Germany holds a federal election. The current state of the opinion polls points to the need for several parties to enter coalition to form a new government, but also implies possible major change in the post-Merkel era. Given Mrs Merkel’s often pivotal role in achieving compromise agreements in the EU as well as at home we need to ask what might happen to German leadership.

Germany is an unlikely leader of the green revolution. As the European dynamo of the internal combustion engine vehicle (ICE) industry, with substantial success in steel making, engineering and coal mining, the country has more than its fair share of industries and companies that face dramatic change and closure of what they currently do.

Nonetheless, German voters have consistently given more support to Green candidates than in most other European countries. Mrs Merkel, ever the consummate dealmaker trimming to the political wind, shifted her party to being anti-nuclear power under green pressure and then adopted a wide-ranging climate-change agenda which took her into policies requiring the closure of coal mines and the wholesale transition from ICE to electric vehicles.

Green surge

In the long run up to the September 26 Bundestag Parliamentary election, the Green party has surged into a strong second place in the polls. The party has governing experience in coalitions in several of the regional lander governments and at 22% in the national polls is only a few points behind the CDU, Mrs Merkel’s party which has led coalitions for 16 years.

In a few days’ time the joint leaders of the Greens, Annalena Baerbock and Robert Halbeck, have to decide which of them will run as the Chancellor candidate in the election, when for the first time there is a chance that the Green leader could even become Chancellor. If the polling remains similar to today, the Greens could try to lead a government with some combination of SPD, Linke and or Free Democrat support, pushing the CDU and their Bavarian CSU allies into opposition.

Alternatively, the Greens might poll well and find a way to enter a coalition led by the CDU. Either way, on today’s polls they would have considerable influence to shift German policy even more in the green transition direction, allied to a further transfer of powers, budgets and responsibilities to the EU which they support.

The CDU and its sister party the CSU who lead the current government coalition are struggling in the polls. They still cannot make up their mind who their Chancellor candidate should be, with the CDU’s relatively new leader replacing Mrs Merkel having to woo support against the possible candidature of the CSU leader instead.

Whilst there is no hint in the media of Mrs Merkel changing her mind about her retirement, no-one can say the CDU leadership election has settled the issue of effective leadership of the CDU/CSU group and possible future government. Armin Laschet the new CDU leader has been damaged by poor CDU election results and by a lack of support from Mrs Merkel.

The longer the issue of who will be the CDU/CSU Chancellor candidate drifts the more likely it is polls languish for them. The aggressive second wave of the virus and the problems rolling out vaccines quickly have damaged the government and the new CDU leader. Maybe there will be better news in late summer that will boost their prospects.

Increasing rate of change

We can be fairly sure Germany is not going to move in an EU-sceptic direction and is going to reinforce its commitment to the green agenda despite court challenges to ECB policy and EU budget plans. This means a faster pace of change with Germany, no doubt wishing to help speed the greening of the world at COP 26 in November.

The green revolution requires large extra quantities of renewable electricity for more or less anything it does, so there will need to be more investment in wind and solar. It will require massive expansion of battery capacity as people link car batteries to the grid and to home systems and as power generators put in large battery capacity to store wind and solar power for peak period use. It will doubtless take economies into substantial production of green hydrogen which may become the way to power heavier vehicles and heat many homes.

There will be substantial new investment in these areas globally, though there are still lively market tussles over the appropriate share prices to pay for all this potential growth.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

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