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What’s in the German coalition deal for Europe

1 week ago 15

Germany's incoming government plans to urge Brussels to be tougher on the rule of law, supports EU treaty changes and might just be open to changing Europe's debt rules.

Those were just some of the messages Germany's next ruling coalition sent out on Europe on Wednesday as it presented a deal that paves the way for a center-left government to take over under the leadership of Social Democrat Olaf Scholz.

The agreement means the leadership of the EU's biggest economy will soon leave the hands of center-right Chancellor Angela Merkel, who decided to step down after 16 years in office. And that has raised questions about how much Germany will change its approach to core European issues.

The coalition treaty emerged after weeks of talks between the Social Democrats, Greens and pro-business Free Democrats (FDP) — a trio that has never before governed Germany. In the deal, the parties stressed that Germany has a "special responsibility" to serve Europe. But their version of serving Europe may occasionally differ from that of Merkel, who often took a centrist, nonconfrontational approach to divisive EU issues.

Significantly, the coalition's agreement called on Brussels to take a tougher stance in its rule-of-law battles with countries like Poland and Hungary. The European Commission has long expressed frustration with both countries over backsliding on democratic norms, but has yet to formally use some of its more punitive powers, such as a tool that would allow it to withhold certain funds from its members over rule-of-law concerns.

"We urge the European Commission ... to use the existing rule-of-law instruments more consistently and in a timely manner," the text reads. It adds that Berlin will only approve payment of EU pandemic recovery funds to those countries "if preconditions such as an independent judiciary are secured."

On EU debt rules, the coalition treaty strikes a balance between the more hawkish fiscal views of the FDP and the more reform-oriented approach of the other parties. The EU's rules on debt and deficits have been temporarily relaxed during the pandemic to help stabilize the economy.

On the one hand, the document stresses that the EU's debt rule "has proven its flexibility" — an argument often used by those who say there is no need to raise debt ceilings. But it also says fiscal rules can be "developed further" to secure growth, safeguard debt sustainability and foster green investment.

The text also envisions the current EU pandemic recovery fund as "an instrument limited in time and amount," suggesting a rejection of permanently pooling debt risks in Europe.

The deal dances around a touchy subject: European Commission President Ursula von der Leyen. Von der Leyen hails from Germany's soon-to-be opposition party, the Christian Democratic Union, raising questions about whether the new government would nominate her for a second term.

The text stipulates that the Greens will have the right to nominate Germany's next European commissioner, the role occupied by von der Leyen while she is also the EU executive's president. But it also adds an enigmatic caveat: "as long as the Commission president is not from Germany."

It also includes a call for a common European electoral law, which would include transnational lists of candidates, with the winning lead candidate being elected president of the European Commission. In theory, von der Leyen could win a second term if that system were to be widely accepted. But that model has faced fierce resistance from some EU governments and parties in the past.

More broadly, the three parties set the highly ambitious goal of changing the EU's treaties. The deal says the ongoing Conference on the Future of Europe — a discussion forum for possible EU reforms — "should lead to a constitutional convention and the further development of a federal European state." That stance won't go down well in some other EU capitals like Warsaw or Budapest, which would likely veto any such moves.

On foreign policy and defense, the treaty demands a reform of the EU's foreign policy division, the European External Action Service. And it pushes the EU to move away from requiring unanimity for all foreign policy moves — a barrier the bloc has struggled to overcome on basic matters like issuing statements on China's crackdown in Hong Kong.

It suggests the bloc move to qualified majority voting on foreign policy but with a mechanism that would let smaller member countries "participate appropriately." Such countries have resisted moving away from unanimous decisions as they fear their vital interests could be overridden by larger states.

It also calls for "increased cooperation between national armies of EU members willing to integrate, especially in training, capabilities, operations and equipment" — a position that touches on the revived debate around how the EU can bolster its own military capabilities. What's missing, however, is a commitment to the NATO goal of raising defense spending to 2 percent of economic output.

As for China, the rising foreign policy challenge of the day, the parties urge any relationship to be based on "partnership, competition and system rivalry." Notably, however, the parties agree that an EU investment deal with China — pushed forward at Merkel's behest — cannot be ratified at this stage. The parties also vow to "clearly address China's human rights violations, especially in Xinjiang."

On migration, the treaty urges "a fundamental reform of the European asylum system" and stresses, hinting at the Belarus border crisis, that "the EU and Germany must not be open to blackmail." EU members for years have failed to reach an agreement on a common approach to processing asylum seekers.

If the U.K. had any hopes that Germany's stance on post-Brexit talks might change with the new coalition, those are squashed by the text: It stresses Berlin's commitment "to a common European policy" toward the U.K. And it insists on the need for "full compliance with the agreements adopted," particularly the Northern Ireland Protocol, which governs the contentious issue of trade between Great Britain and Northern Ireland.

Any non-compliance by the British side, the text says, must lead to the "consistent application of all agreed measures and countermeasures."

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