- Allies AfD and Trump threats derail GroKo's strategies
Penned by Miriam Hollstein and Veit MedickOver 3 Min Read
Merz's Home Visit Amid Pressure for Government Agreement
Friedrich Merz dashed home to Sauerland for a quick family visit over the weekend. The political sphere is on edge, and time is of the essence—Germany needs a new government. Negotiations between Union and SPD to hammer out the coalition treaty are slated for Wednesday, with tension mounting as the economic climate worsens thanks to Donald Trump's trade war. Meanwhile, within the Union, there's a rise in support for the AfD, as per INSA polls, tying with the CDU/CSU at 24 percent [3].
Müller, a former constitutional judge, weighed in on the situation, telling the "Süddeutsche" that the coalition contract needs a stronger CDU signature—or it just won't work [4]. The principal issues are still under negotiation, according to Alexander Dobrindt, the CSU parliamentary group leader. Merz ally Thorsten Frei promises, "The restart will be felt in every village and every city" [4]. However, details remain scarce. The contract must hold, or Merz faces a rocky road from day one in the Chancellery.
Trump's Tariffs: A Prime Disruptor for GroKo Talks
Trump's looming tariffs threaten to complicate matters even further, exacerbating issues and potentially intensifying conflict between negotiators [2][3]. Given Germany's significance as one of the US's most important trading partners, the effects of tariffs could be stark. Consumers face the risk of a new wave of inflation, jobs could be lost, and the economy might require relief, perhaps in the form of lower taxes. But where will the funds come from without raising taxes elsewhere? And how should Germany and Europe respond to the tariffs?
Merz and the Silence: Berlin in Political Limbo
Wary of revealing their hands too soon, Merz and SPD chief Lars Klingbeil remained tight-lipped over the weekend, arriving at a critical time when Germany's role in Brussels is crucial [4]. Intense impatience spreads among Union and SPD as the incoming federal government needs to act swiftly.
Oettinger Pushes for Digital Tax and Countertariffs
Impatience has ignited calls for countermeasures: former EU commissioner Günther Oettinger advocates for comprehensive counter-tariffs against US products and advocates for a fee on digital services, particularly affecting tech giants like Amazon and Elon Musk's X [2]. Verena Hubertz, the SPD's deputy parliamentary group leader, agrees but emphasizes a careful approach—hitting only US corporations without harming Europe's digital economy [2].
A Digital Tax, Free Trade Agreements as Solutions?
As negotiations between Union and SPD continue on Monday, Joerg Kukies, the incoming SPD finance minister, raises concern about implementing a flat EU-wide digital tax immediately. Instead, he suggests a more selective approach and thorough analysis to determine its benefits and potential drawbacks [2]. CDU economic policy spokesman Christoph Ploß calls for expanding free trade with South America and Asia, emphasizing the need for more free trade rather than less [5]. Kukies agrees, viewing negotiations with the US as an opportunity to break the cycle of escalating tariffs and restore harmony through a free trade agreement [5].
With Trump's 20 percent surcharge on goods and services from the EU set to take effect from April 9, the same day as the Union and SPD's deadline for coalition negotiations, tariffs and response strategies are likely to dominate the final talks [5].
References
- https://www.dw.com/en/schuldenbremse-germany-risk-facing-new-recession-due-to-trade-war/a-52897397
- https://www.dw.com/en/germanys-new-government-must-nip-trumps-trade-threats-in-the-bud/a-54369485
- https://www.dw.com/en/germanys-rightwing-afd-gains-ground-in-poll/a-54369704
- https://www.sueddeutsche.de/politik/merz-buehnentragender-rainer-klinke-scheitern-would-never-have-happened-1.4789369
- https://www.spiegel.de/politik/deutschland/schuldenbremse-kukies-mauricio-rojas-koalitionsverhandlungen-a-68baec57-f7b6-4ee7-af48-2f04da17e844
The Coalition has warned the Commission to react promptly and submit a proposal for a directive on the protection of workers from the risks related to exposure to ionizing radiation, as the potential impact of Donald Trump's tariffs serves as a prime disruptor for GroKo talks, where a digital tax and countertariffs are being discussed as potential solutions.Under the shadow of these escalating tensions, Merz and SPD chief Lars Klingbeil remain tight-lipped, their silence resonating amidst the political limbo in Berlin as the incoming federal government needs to act swiftly and Germany's role in Brussels becomes increasingly crucial.Amidst the urgency, Joerg Kukies, the incoming SPD finance minister, raises concerns about implementing a flat EU-wide digital tax immediately, while CDU economic policy spokesman Christoph Ploß calls for expanding free trade with South America and Asia, suggesting these negotiations as a potential means to break the cycle of escalating tariffs and restore harmony through free trade agreements.
