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BERLIN – Amid the election campaign in Germany, nearly 200 people have died in extreme flooding in Germany. Four months later, the fight against climate change has become the central theme of the new post-Merkel government.

Most rooftops will be fitted with solar panels and more than 1,000 wind turbines will be built, nearly doubling the share of renewable sources of electricity to 80% by 2030. The last coal mine will close in the same year, eight years earlier. provided that. And 15 million electric cars will travel the country’s legendary highway.

At least that is the ambition of what, according to Olaf Scholz, the next Chancellor-designate, will be “Germany’s greatest industrial modernization in over 100 years”. It was part of the governing plan that he and his coalition partners announced on Wednesday.

Who will pay for all of this is another question – and one that has been hotly debated by the very different parties that have joined Mr Scholz’s Social Democrats, the Progressive Greens and the pro-business Free Democrats.

The Greens have campaigned to spend € 50 billion in green investment every year for a decade to fund the country’s transition to renewables – and pay for it by removing the country’s tough balanced budget rule.

Free Democrats only agreed to join the government on condition of not raising taxes and respecting the country’s balanced budget law, a so-called debt brake enshrined in its Constitution.

It is no coincidence that the biggest battle in the six weeks of coalition talks was who would control the finance ministry and with it the purse strings. Robert Habeck, co-leader of the Greens, and Christian Lindner, leader of the Free Democrats, wanted the job and fought for it to the end.

In the end, Mr Lindner won, while Mr Habeck will oversee a new super-ministry for the economy and climate.

“As far as finances are concerned: it is no secret that the positions within the coalition are very far apart,” Habeck of the Greens told Süddeutsche Zeitung in an interview published on Thursday. “We have talked a lot about taxes, reducing subsidies and regulating the market. If you ask me where I would have liked to see more, it is this area.

One of the biggest questions for climate change experts is whether the commitment to put Germany – Europe’s largest economy – on a carbon neutral path by 2045 is still primarily an issue. pushed by the Greens or is now really a project shared by all members of the new administration.

“Will its achievements match its ambitions, or will the parties fall back on ideological starting points?” said Lutz Weischer, who heads the Berlin office of Germanwatch, an environmental watchdog.

There are signs of hope, he said. By making the green transition a national project of industrial competitiveness and social justice, each of the three parties was able to sell it to its base.

The new government has woven a commitment to put in place measures that would limit global warming to 1.5 degrees Celsius by the end of the century, as stipulated by the Paris climate agreement, throughout its 177-page master agreement. There are 198 mentions of “climate” in this document, in all policy areas, from culture to foreign policy.

“The climate crisis endangers our livelihoods and threatens freedom, prosperity and security,” says the preamble to the Coalition Treaty. “Achieving the Paris climate objectives is our top priority. We want to reinvent our social market economy as a socio-ecological market economy.

Even Mr Lindner, the leader of the Free Libertarian Democrats, proudly called the treaty “the most ambitious climate protection program of any industrialized country.”

“If this is really the spirit of the new government, then it is a real game changer,” Weischer said. “But that remains to be seen.”

Germany’s debt brake, enshrined in the Constitution in 2009, limits annual borrowing to 0.35% of nominal gross domestic product, or about 12 billion euros per year, far from the 50 billion that the Greens feel necessary.

But there are signs the new government has come up with roundabouts for borrowing.

One is to exploit the temporary suspension of the debt brake during the pandemic. As finance minister, Mr Scholz last year suspended the spending ceiling, which was allowed in the event of a national emergency, and the Coalition Treaty foresees that it will not be reinstated until the end of 2022.

This gives the new government time to borrow the money and put it into a fund that will continue to operate even after the borrowing limit comes back into effect.

Another way to raise funds is to strengthen the state development bank, known as KfW, which can borrow funds that the government can then allocate to infrastructure projects and other investments – without it appearing in the federal budget.

There are also ways to change the formula depending on how the debt brake is calculated and thereby increase the spending limit, economists said.

Few people expect this creative accounting to be enough to raise the € 50 billion a year the Greens have been pushing for, but the commitment to significantly increase public investment has been widely applauded.

“I think this agreement signals a change,” said Clemens Fuest, president of the Ifo Economic Institute. “A lot of the transformation investments are really being pushed harder now. “

Marcel Fratzscher, director of the German Institute for Economic Research, said he was impressed by the detail of the proposed measures.

“There is a wind of change in the air,” Mr. Fratzscher said. “On the climate, it’s a very ambitious, very detailed and very convincing program. It remains to be seen whether this is enough for Germany to meet the 1.5 degree target.

Environmental organizations and climate activists were not convinced.

“This coalition agreement alone is not enough to secure the 1.5 degree limit,” youth movement Fridays for Future said in a statement. According to Greenpeace, the program “only hints at a radical ecological breakthrough”.

Mr. Habeck, the future Minister of the Economy and Climate, recognized the difficulties ahead.

“No other country in Europe is doing what we are doing,” said Habeck. “Our neighbors cling to coal, like Poland, or rely on nuclear, like France, or they do both and a little renewable energy. We are leaving behind the two old technologies.

“There will be decisions that will be difficult,” he added. “I know that.”


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