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GERMANY: The greening of federal politics continues

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Last week’s constitutional court ruling on Germany’s climate law has not remained without consequences. The Karlsruhe judges decreed that, in its current form, the law violates the freedoms of future generations in that it postpones the most drastic climate adjustment measures until after 2030. This week, the government reacted with plans to increase its 2030 CO2 reduction target from 55 to 65%.

Court rulings

Having often backed the court in its Eurozone rulings, some conservative commentators have voiced skepticism over the climate verdict, complaining about judicial activism. This shows how the court’s latest ruling positions it in new ways politically. In previous, Eurozone-related rulings, the judges’ insistence on lengthy and unpredictable democratic procedures had begun to annoy the pro-European political camp. In contrast, the court’s climate ruling is in line with the political preferences of new middle-class voters.

As a result, there are now hopes that the climate ruling may have repercussions also for the still ongoing assessment of the EU recovery fund. Recall that the fund’s focus on the green transition had initially raised eyebrows among some German lawyers. They have argued that EU law might limit rescue measures to immediate crisis-fighting purposes. But if the court’s newfound climate credentials also facilitate clearance of the green recovery fund, this would have a convenient (side) effect: the looming question of potential limits to EU integration under Germany’s existing constitution would, once again, get delayed – until the next crisis situation requires further steps, this time, beyond the latest innovation of joint EU bond issuances.

In the meantime, the climate ruling is forcing the government to move even faster along the green transition principally endorsed by almost all political parties. Politically, the goal is to take the topic off the agenda quickly given the continued popularity of the Greens. But the political consensus is moving towards the Greens, now including even the Karlsruhe court, one of the country’s most respected institutions.

Fiscal questions

The continued greening of German politics lends additional urgency to the question of financing the ever more ambitious climate targets. But as discussed, the Greens’ idea of altering the debt brake lacks seriousness given the need for 2/3 majorities in both houses of parliament, i.e., among Bundestag MPs and the representatives of regional state governments in the Bundesrat. More importantly, weakening the debt brake is politically unrealistic as long as the Greens (more or less openly) desire a coalition with the fiscally conservative Christian alliance (CDU/CSU); even a coalition with the probably more amenable Social Democrats (SPD) may involve cooperation with the fiscally even harder-nosed Liberals (FDP) – unless the Greens overcome their suspicions of the post-communist Left, for instance, on issues such as foreign policy vis-à-vis Russia.

Cutting through the pleasant sounds of Green campaigning for new middle-class voters, then, a programmatic meeting point with CDU/CSU could be cuts to social spending – but repackaged as smart reforms focused on future returns, rather than the “black zero” orthodoxy of the Schaeuble days. Combined with demographic change, the pandemic-induced holes in the budgets of social and health insurance funds raise serious questions. The SPD’s likely desire to revert to higher transfers from the federal budget could create competition for funds required for speeding up the green transition. CDU/CSU and the Greens might end up as natural partners, including on the fiscal front.

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GERMANY: The greening of federal politics continues

Last week’s constitutional court ruling on Germany’s climate law has not remained without consequences. The Karlsruhe judges decreed that, in its current form, the