Recovering from the pandemic and the end of the Merkel era

After 16 years in the post, An­gela Merkel has passed on the baton of Ger­man Chan­cel­lor to Olaf Scholz. Merkel’s de­par­ture marks the end of an era, dur­ing which time the East Ger­man-born politi­cian be­came to be seen as one of the ar­chi­tects of to­days’ Eu­ro­pean Union. In Ger­many, her de­par­ture gives way to an un­prece­dented gov­ern­ment in the form of a coali­tion that has al­ready been called a “traf­fic light”, in­clud­ing as it does So­cial De­moc­rats, Green en­vi­ron­men­tal­ists and FDP lib­er­als. The new for­mula has gen­er­ated high ex­pec­ta­tions and un­cer­tainty in equal mea­sure.

An ur­gent chal­lenge for the new ex­ec­u­tive is the cri­sis caused by the Covid pan­demic. With just over 70% of the pop­u­la­tion vac­ci­nated with a sin­gle dose, the vac­ci­na­tion fig­ures in Ger­many are among the low­est in Eu­rope. Faced with this sce­nario, the Ger­man au­thor­i­ties are con­sid­er­ing call­ing on par­lia­ment to ap­prove com­pul­sory vac­ci­na­tion, in the form a free vote that would mean MPs could vote ac­cord­ing to their con­science rather than along party lines.

The pan­demic is act­ing as a brake on the Ger­man econ­omy, and Chan­cel­lor Scholz will have to push for new mea­sures, such as in­creas­ing pub­lic spend­ing but with­out rais­ing gov­ern­ment debt, a move that has been de­scribed as “squar­ing the cir­cle for 2022”. An­other major chal­lenge fac­ing Eu­rope’s lead­ing econ­omy is the fight against cli­mate change, a key aim of the Green party in the rul­ing coali­tion. The goal is en­ergy trans­for­ma­tion, with plans to aban­don coal for re­new­able en­ergy, and rad­i­cal changes in adopt­ing elec­tric ve­hi­cles. Some 2% of the Ger­man ter­ri­tory will be given over to the gen­er­at­ing wind and hy­dro­gen-based en­ergy. The goal is to get 80% of elec­tric­ity in the coun­try from re­new­able en­ergy sources by 2030 and to put 15 mil­lion elec­tric cars on Ger­man roads.

In the next few years, the coun­try is also fac­ing the re­tire­ment of the baby boom gen­er­a­tion, which in Ger­many are those born from the early fifties to the mid-six­ties. This will stretch the Ger­man pen­sion sys­tem and cre­at­ing fears about labour short­ages. Some mea­sures have al­ready been taken, such as rais­ing the re­tire­ment age to 67. Im­mi­gra­tion could al­le­vi­ate the prob­lem of an age­ing pop­u­la­tion, but at the same time cre­ates new chal­lenges. Since the 2015 mi­gra­tion cri­sis, which se­verely af­fected Ger­many, the rise of the far right has been strik­ing. The Al­ter­na­tive for Ger­many party (AfD) has won seats in just about all re­gional as­sem­blies as well as the Bun­destag.

fea­ture eu­ro­pean union