After sixteen years of power, the German conservative party—the Christian Democratic Union (CDU)—is plummeting in the polls. They are falling behind the Social Democratic Party (SPD) which, left for dead a while ago, is now experiencing a surprising comeback. Olaf Scholz, the SPD’s candidate for Chancellorship, is gaining an opportunity that probably neither he nor his most devoted supporters expected. The reason for this opportunity, however, might be less his popularity, and more the striking unpopularity of his greatest contenders – Armin Laschet of the CDU, and Annalena Baerbock of the Greens.
The public debate during the election has focused on the prospects of these candidates and the possibility of forming coalitions between the main parties in Parliament: the CDU, the SPD, the Greens, the Free Democratic Party (FDP), and The Left (Die Linke). But that debate has been avoiding the elephant in the room. The different party programmes reflect a conflict over the distribution of wealth in times of skyrocketing public debt and large-scale industrial transformation, and there is a lot at stake: who will pay for the costs of the pandemic? Are we going to witness another long night of austerity in the EU? And will the ‘green and digital transition’ be a just transition, making sure no one is left behind?
The answers to these questions depend on the SPD and the Greens. If they decide to seek, together or individually, a coalition with the conservative camp—the CDU and/or the FDP—they will have to give up on their more progressive ambitions. On the other hand, if they decide on a coalition with The Left, the course of German and potentially EU politics may change for good.
Take the question of tax. The FDP and CDU are categorically ruling out any tax hikes. Instead, both parties are seeking to reduce corporate taxes, with the FDP also demanding tax cuts for top income earners. According to the economic research institute ZEW, the tax and social transfer plans of the FDP and CDU would create a hole in the public purse of €87 billion, or €33 billion respectively. As the economists say, there’s no such thing as a free lunch: somebody will have to pay the bill. In order to finance the tax cuts for corporations and the rich, these parties will have to cut public services and social spending. In other words, their political programme entails a bottom-up redistribution of wealth.
In contrast, the SPD, Greens, and The Left are advocating tax increases for top income earners in addition to a wealth tax, while demanding tax cuts for low- and middle-income earners. These three parties could find an agreement to install proper taxation for digital businesses and a financial transaction tax. These measures would allow the government to collect billions in additional tax revenues, which could be used to manage the consequences of the pandemic and to finance a social and ecological transition. A progressive centre-left coalition would therefore mean a top-down redistribution of wealth to the benefit of the great majority of working people.
The prospect of such redistributive policies is giving the conservative camp nightmares. The latest tactic used by the CDU and FDP has been an antiquated fear campaign against the ostensible threat of a swing to the left. The strategy is to pressure the moderate centre-left parties—the SPD and Greens—to rule out a coalition with the Left, committing them to a coalition with the conservative camp.
And it’s no secret that key figures in the centre-left parties, like Olaf Scholz and Annalena Baerbock, would prefer that option. Don’t be fooled: the main reason they have not yet ruled out a coalition with the Left is that they need the left option to strengthen their bargaining power and push for a ‘traffic light’ coalition with the FDP. There is, however, a clear downside to such a coalition: the SPD and Greens would need to make major concessions to satisfy the free market fundamentalists.
There would also be major reverberations for the EU. After the elections in Germany, the European Commission will relaunch the debate about EU debt rules. The long decade of austerity policies has been traumatic for the EU, fissuring its unity; France and Italy are now looking for a partner to reform the rules, providing more flexibility and enabling member states to strengthen public investment. There are likely to find an ally in a German government composed by a coalition between the SPD, the Greens, and The Left. All of these parties have pledged in their programmes to turn their backs on the EU debt rules and promote public investment. On the other side, the FDP and CDU have confirmed their oath to an unconditional adherence to the EU debt rules. These parties want to return to the imposition of fiscal discipline as fast as possible, despite the dramatic economic and social consequences of the pandemic. They have nothing else to offer to the Community than the iron cage of austerity, which has been suffocating our neighbours for years.
There is, however, an important lesson in their campaign of fear against The Left in Germany. Beneath the surface, the campaign is a confession that a different Germany—and potentially, therefore, a different Europe—could exist. Indeed, the Left is prepared to start turning the wheels of change and inspiring other countries in Europe to join the swing leftward. The Left has proposed a set of immediate measures for the next government to implement to improve people’s lives directly – primarily through a mix of pro-labour policies, redistribution of wealth, and climate neutrality. The programme includes, for example:
- Strengthening the wage demands and bargaining power of workers by introducing a minimum wage of €13 and abolishing the privilege of employers to opt out of the general application of collective agreements.
- Minimising poverty at all ages by substantially increasing social security benefits, introducing a minimum pension of €1,200 and a basic income for children (€328-630, depending on the income of the parents), and abolishing the sanctions regime for unemployed. The programme also calls for a cap on rent increases.
- Creating decent work in a climate neutral economy by establishing a fund for industrial transformation worth €20 billion, while championing a coal phase-out by 2030.
From the perspective of the party bases of the SPD and Greens, these points are a sensible opening bid to negotiate a progressive centre-left government, overlapping substantially with their own transformative ambitions. But the greatest obstacle to such a progressive coalition is their own largely conservative leaderships, including both Scholz and Baerbock, who are using differences in foreign policy as a smoke screen to conceal the option of a coalition with The Left, and open the path for a collaboration with the FDP and/or CDU.
In any case, the message here is that The Left is prepared. We are part of the regional government in Berlin, Bremen, and Thuringia. We know how to govern, and we know who we are. Our function is to be the voice of labour, of the poor, and of the marginalised. We take this role seriously, and we will not concede to a sell-out. We are prepared to continue our fight for social justice, either in the next government, or in opposition to it. Our mandate is clear – and we will not step back until all voices are heard.