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ANALYSIS

Sceptical Europe and a housing crisis: the problems facing new German chancellor Olaf Scholz

The Times
Olaf Scholz must master the dynamics of a three-party coalition
Olaf Scholz must master the dynamics of a three-party coalition
SEAN GALLUP/GETTY IMAGES

Despite his zen-like demeanour Olaf Scholz is a man in a hurry. From crowded intensive care units to the Russian forces massing near the Ukrainian border, the new chancellor’s desk is piled with urgent decisions to be made.

MODERNISING GERMANY

Scholz has promised to open a liberal chapter in his country’s history. This week he and the leaders of the three parties in the coalition — his Social Democrats (SPD), the Greens and the Free Democrats (FDP) — approved an agenda that promises, in theory, to unblock the logjam of reforms that characterised Angela Merkel’s final years in power. His government’s ambitions are extensive. It wants to ease the housing shortages by building 400,000 homes a year and expand the wind farms while putting solar panels on the roofs of all sizeable new buildings. It also plans to withdraw from coal and nuclear energy. It wants to restore “respect” to people in low-paid jobs with a rise of nearly 30 per cent in the minimum wage and to bolster the state pension system with investments in the stock market.

LIBERAL REVOLUTION

Its social programme is radical: gender self-identification, lowering the voting age from 18 to 16, legalising cannabis, allowing foreign residents to take German citizenship without surrendering their other passports and abolishing an archaic ban on abortion clinics. How the public and the conservative opposition parties will respond to this jolt of liberalism remains to be seen.

FUTURE OF THE EU

On Europe as well, the coalition has grand plans. It aspires to bind the European Union more closely into a “federal state of Europe” modelled on Germany. Other member states are sceptical of this idea. Sanna Marin, Finland’s prime minister, told The Times that she saw little reason to rewrite the bloc’s rules, while Sauli Niinisto, the country’s president, said that the project was likely to founder. Jaroslaw Kaczynski, Poland’s deputy prime minister, dismissed the vision as tantamount to a “fourth Reich”.

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COALITION TENSIONS

Scholz must also master the dynamics of a three-party coalition. The preliminary talks went well, with few of the leaks and hostile briefings that have hobbled previous efforts. His partners have been full of praise. Christian Lindner, the FDP leader, who will take Scholz’s old job as finance minister, said that the chancellor had an “inner landscape of clear values that allow him to lead this country forward”. Yet conflict is inevitable, particularly between the Greens and the FDP. There are signs of tension between the Green-led foreign ministry, with its hawkish positions on Russia and China, and the more emollient approach of Scholz. Lindner’s finance ministry is also likely to lock horns with the business and climate “superministry” under Robert Habeck, the Green vice-chancellor.