Finance

Germany’s FDP agrees to formal coalition talks

Germany’s Social Democrats, Greens and liberal Free Democrats (FDP) are to launch formal talks on creating a coalition government after the FDP gave the green light to negotiations.

The move comes three weeks after national elections, which were narrowly won by the SPD and saw Angela Merkel’s ruling Christian Democratic Union slump to the worst result in its history.

If the talks go according to the parties’ plan, Olaf Scholz, Germany’s finance minister and Social Democrat candidate for chancellor, will succeed Merkel, who is stepping down after 16 years as Germany’s leader.

Christian Lindner, FDP leader, said a joint meeting of the party’s parliamentary caucus and its national executive on Monday had voted unanimously to start talks with the SPD and Greens.

“Germany needs a stable government, Germany can’t be leaderless,” he said. “Germany needs a sweeping modernisation of its society, economy and state.”

The so-called traffic light coalition — named after the three parties’ traditional colours — will be the first such combination in Germany’s postwar history. It could prove awkward — the FDP and Greens, in particular, disagree strongly over fiscal policy, the role of the state and how to tackle climate change.

However, the three overcame some of those differences over eight days of exploratory talks after the election. These resulted in a 12-page paper published last Friday summing up policies they could all agree on, that will now form the basis of formal coalition negotiations.

The paper reflected some of the key demands of each party. The SPD won a commitment to raising Germany’s minimum wage, the Greens a suite of environmental measures to fight climate change, including a much earlier phaseout of coal power than is currently envisaged. The FDP was able to fend off all attempts by the other two to raise taxes or soften Germany’s strict rules on new borrowing.

Lindner said it was “no surprise that there are still big policy differences” between the FDP, Greens and SPD. At the outset, he said, it was a “marriage of convenience”: “it’s up to all the participants to see if something can come of it”.

He said the three would all have to exhibit “a great deal of tolerance” and “be prepared for new thinking”. Then there was a real chance that a new, reform-minded government could be created that would make Germany “freer, more sustainable, more digital, more modern and more competitive”.

The FDP, which was last in government in Merkel’s second cabinet between 2009 and 2013, was the last of the three partners to give the green light to coalition talks. The SPD did so on Friday and the Greens on Sunday.


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