Scholz bridges marathon 30-hour spat with partners with deals on climate protection and transportation

Crisis?

What crisis?

The German chancellor, Olaf Scholz, denied on Tuesday that his government, made up of a tripartite Social Democrats, Greens and Liberals, has entered into a crisis due to the continuous quarrels between them and the impossibility of agreeing on key issues such as public spending on the next federal budget.

He did it shortly before the end of a marathon meeting between the partners that has lasted for three days, when normally this type of meeting produces results in a matter of hours.

The truth is that the dispute has been resolved, at least on some points that have to do with climate protection and the decarbonization of transport.

The agreement that the three parties have presented after 30 hours of negotiation allows them to muddle through and save face after days and weeks of discrepancies,

The agreement includes provisions that are pleasing to all parties.

Climate protection laws will be revised, the rail network as well as the road and motorway network will be strengthened and a surcharge on tolls paid by trucks for driving through Germany will be created to help finance some of these initiatives, the leaders of all three parties at a press conference on Tuesday night.

The three underlined the idea that the foreign minister had advanced in a previous appearance with the president of Kenya, William Ruto: the objective is "the modernization" of the country.

“After many hours of intense discussions, I can affirm that it has been worth it!” Scholz said on Twitter at the close of the negotiating round.

The lack of progress and growing friction between the tripartite's junior partners, the Greens, and the liberals of the Free Democratic Party (FDP), had raised doubts about the government's ability to carry out its ambitious program to modernize the economy, one of the biggest challenges facing the country, Scholz noted.

Lars Klingbeil (SPD), Ricarda Lang (Greens) and Christian Lindner (FDP) acknowledged that it has not been easy to reach agreements, but they said they were satisfied with the result.

On Tuesday morning, when they were still locked up in the Chancellery, the opposition leader, the Christian Democrat Friedrich Merz, had warned of an obvious "crisis in the coalition."

The Greens have managed to get the increase in truck tolls to be used to pay for rail investment.

80% of the additional revenue from the new surcharge will have to "flow towards the expansion of the rail system, to get a modern railway," said Lang, who estimated that upgrading the country's trains and infrastructure will require $45 billion. euros until 2027.

The Liberals, for their part, have reached an agreement to speed up construction projects for new sections of motorways.

Although, as the leader of the Greens stressed, when they are approved, they must also study how to install solar panels on the margins of the new infrastructures to obtain renewable energy.

The expansion of the road network is one of the favorite topics of the liberals, defenders of the private vehicle and the powerful German car industry, while the Greens fight to prioritize public transport and more specifically the train.

According to Lindner, who in addition to being the leader of his party is finance minister of the Scholz Executive, there are 144 highway projects classified as of general interest and to which priority will be given.

The Liberals score the same with the modification of the climate protection law.

Until now, each economic sector had its own emission reduction targets.

“We will leave behind the pure sector orientation”, said Lindner, so that “some sectors help others”.

In other words, if the transport sector does not meet its objectives —as is the case in Germany— it can be compensated with the emission reductions of others.

Another victory for the Minister of Transport, the liberal Volker Wissing, responsible for blocking the European law that ends with combustion engines in 2035, which pitted Berlin against the Commission and many of its partners.

Another of the points of friction in recent weeks, that of the prohibition to install new gas or diesel fueled heaters from 2024, also seems to have been resolved.

It was a proposal from the Greens that did not convince either the liberals or the social democrats, who were concerned about the cost of massively installing much more expensive electric heat pumps.

The Government will present a bill in this regard in April that will include some type of subsidy for low- and medium-income households.

“We will not leave anyone in the lurch,” Lang said.

The leadership of the parties met at 6:30 p.m. on Sunday, in principle to reach an agreement that they could tell the public on Monday morning;

instead, they took a break to travel with Scholz to the Netherlands and resumed talks on Tuesday.

In total, 30 hours of negotiations, part of them on weekends and at night, something that they had promised to avoid when they signed the coalition agreement at the end of 2021.

Scholz considers that the bump with his partners is over: “The modernization of our country brings growth opportunities that have not existed for a long time.

This is how we manage digitization and stop man-made climate change, ”he congratulated himself on Twitter.

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