Brexit will have “consequences” for UK, says Olaf Scholz
Mr Scholz will lead a tripartite coalition with broad plans for Germany’s transition to a green economy, in a deal that will end Merkel’s 16 years in power. It has been almost two months since his Social Democratic Party (SPD) won the German national elections. Mr Scholz has since been in coalition talks with the Greens and Free Democrats (FDP), who will enter government on the basis of a climate-friendly and business-friendly deal.
The environment is a big part of the alliance, with the parties aiming to phase out the use of coal by 2030, eight years ahead of schedule.
A long list of coalition winners and losers in and around Europe has since been drawn up, highlighting the many advantages and challenges facing outside powers now.
It is believed that the German coalition will be resolutely pro-European, which the SPD, the Greens and the FDP stressed during discussions unveiled on Wednesday.
However, it’s not entirely clear what tact the trio will take when it comes to things like EU finances.
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German coalition: SPD, Greens and FDP leaders arrive at press conference
The coalition signaled “openness to reforming fiscal rules and some form of fiscal solidarity,” according to Politico.
It would be good news for countries like Italy and Spain which have backed policies like the EU stimulus fund, which saw members share debt for the first time in the bloc’s history. .
However, this legislation divided the EU, with many northern European countries, such as the Netherlands, Sweden, Denmark and Austria, initially rejecting the idea, suggesting that more loans, and not more loans. grants, should be awarded.
Whatever approach Mr Scholz and his colleagues decide to take when examining the EU, their actions will have a big impact on Germany’s neighbors, given that the country is the largest economy in the country. continent.
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Coalition agreement: it is believed that the coalition will focus on the fight for the environment
Among the losers, Politico lists the countries that initially blocked the EU’s stimulus fund: the Netherlands, Sweden and Denmark.
The publication said the coalition treaty was vague on whether Berlin would support a new round of Commission bonds or any other kind of EU funding, adding it was “anathema” to “frugal” countries. “from the Netherlands, Sweden and Denmark.
However, in an overnight interview, Christian Lindner, leader of the FDP, hinted that he was open to discussion.
Sweden itself faces a political crisis after new Prime Minister Magdalena Andersson, who led a Social Democratic Party coalition with the Greens, was forced to step down after just nine hours in office.
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Netherlands: Mark Rutte has long opposed liberal EU financial policies
Denmark: Mette Frederiksen nation has also taken a hard line on financial reform
This was after she failed to get enough support for her proposed budget.
Instead, the Swedish parliament backed a plan drawn up by the center-right Moderate Party, the Christian Democratic Party and the far-right Swedish Democrats.
It was an example of Sweden’s backlash against liberal financial reforms, some of which could be brought into the EU through the new German coalition.
Earlier this month, as the SPD, Greens and FDP discussed details of the coalition, Politico was told by people familiar with the negotiations that the leaders were seriously considering using German state bank KfW to finance investments.
Budget fractions: Germany has changed its position on finance in the EU in recent years
Another plan that was reportedly discussed was the EU common loan.
One concrete idea was for a Commission bond program similar to that launched by the EU for the stimulus fund, which would allow member states to borrow from a central bank on a debt basis. shared.
Mark Rutte, the Dutch Prime Minister, led the âfour frugalâ (Netherlands, Austria, Denmark, Sweden) against the stimulus fund last year.
He had long relied on Germany to defend the budgetary discipline of the EU, pushing back the attempts of the integrationists to mutualize the debt or to relax the budgetary rules.
Sweden: in short, the country’s first female prime minister, Magdalena Andersson resigned after just nine hours
However, Ms Merkel and French President Emmanuel Macron changed tack when the pandemic struck and fervently pushed for greater economic integration – something the Frenchman in particular had been trying to do since coming to power in 2017.
Mr Rutte and the other frugal nations initially called for a “realistic level of spending” and that all the money be paid back.
However, they were defeated when the bill came to a vote.