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06 November 2013

German coalition negotiations - slow progress

Two weeks into the coalition negotiations there has been some progress, albeit slow. But big questions on taxation, European policy and the financing of many projects remain open.

Translated from the German 

First agreements

As reported by the Zeit, experts from the the CDU and SPD have agreed on the basic principles of a common economic policy last Monday. The negotiating parties also agreed on a new scheme for part-time employment. Employees who reduce their working hours for family reasons should thus be better off in the future. They will be entitled by law to have the option to chose temporary part-time employment. CSU and SPD also plan a more flexible organisation of parental leave.

The Spiegel also reported that CDU and SPD have agreed to reintroduce start-up grants as standard legal benefit, in order to help unemployed people to become self-employed. Only two years ago, subsidies of this kind were weakened by the CDU/FDP coalition. 

However, Zeit reports that over several big issues such as taxation, finance and energy policy, there are still serious differences between the CDU/CSU and SPD. Equally, in the discussion of pensions, CDU and SPD have achieved no tangible result.

The manager magazin goes into more detail and elaborates that the CDU keeps insisting on the fact that Germans should not pay higher income tax. Nevertheless, to realise the coalition agreements and demands made by both parties, both CDU and SPD require more taxpayers' money. Manager magazin online has aquired a list with the SPD's 41 proposals on how to finance policies whilst avoiding a nominal increase in income tax. This list, the magazine warns, would be even more costly to the economy than the highest top-rate tax imaginable. 


The Zeit reports that CSU Executive Secretary Alexander Dobrindt is strongly opposed to a "central European state". Dobrindt is quoted as saying that, "an extension of competences in favour of the EU is not on the agenda", and that a "carte blanche" for further shift of powers to the EU-level could "not be given". However, CDU General Secretary Hermann Gröhe and his SPD colleague Andrea Nahles contradicted their CSU counterpart. "We have yet to deal with the area of ​​financial market regulation, and in some areas European regulations will be boosted", said Gröhe.

Meanwhile the Spiegel reported that CSU chief Horst Seehofer wants to achieve a drastic reduction in staff at the European Commission. "The number of Commissioners should be halved", he said. As the EU Commission had the right to initiate legislative proposals, and any Commissioner considered themselves as both indispensable and all matters appertaining to their own area of competences, the Commission was engaging in "insane activities", he said. 

Seehofer further called for more popular participation within German democracy. The power and size of a grand coalition raised the question as to how they could involve the population adequately, he said. He wants to introduce referenda at a federal level.

Still uncertain outlook

As reported by Spiegel, the Schleswig-Holstein SPD leader Ralf Stegner is not yet clear that the coalition negotiations will be successful after all. "I'm still critical, and the result is still open", he said. "In the end, the SPD members will still have to agree." The final hurdle for a grand coalition will be that the negotiated coalition agreement will need approval from the party base in a vote open to all members of the Social Democratic Party which is planned for the week of 6 to 12 December.

However, in an interview with the Frankfurter Allgemeine Zeitung, Social Democrat Malu Dreyer, Minister-President of Rhineland-Palatinate, said: "I'm optimistic that it will work". She is involved in the current federal coalition talks and sees a grand coalition with optimism. 

The Süddeutsche Zeitung warns that he lowest common denominator is usually the most convenient and least demanding solution - and often the most expensive. And the three parties involved in the negotiations are going down exactly this route, writes Marc Beise. The future coalition, he says, is elaborating a policy programme that will exact even more from citizens and businesses than was expected by many voters anyway. This would be moderately successful in the short term, but would take its toll in the long term.

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