Challenges for Olaf Scholz’s government
December 8, 2021 - Germany’s new coalition includes three parties that have never governed together before -- Social Democrats (SDP), Greens and liberal Free Democrats (FDP) -- and faces a host of urgent issues.
With Olaf Scholz’s ascendency to Chancellor, the untested governing coalition faces questions about several critical topics, including the looming threat of a Russian invasion of Ukraine, the future of Nord Stream 2, and German commitments in NATO.
Former finance minister Chancellor Scholz must deal with a sputtering economy. Figures released on Monday (December 6) showed a far more significant slump in factory orders in October than analysts had predicted. The Economy Ministry said demand was down 6.9 per cent compared with the previous month, the second drop in three months in Europe’s biggest economy.
Shortages of raw materials and products such as microchips have hit the automobile industry hard. And inflation has surged to six per cent, far exceeding the European Central Bank’s two per cent goal.
Foreign minister Annalena Baerbock has to build the coalition’s response to a possible Russian invasion of Ukraine. There is likely to be a row over Nord Stream 2, the gas pipeline from Russia across the Baltic, which the Greens oppose and the SPD backs.
The 40-year-old MP and Green co-leader will also have to deal with President Vladimir Putin, while many in the SPD are inclined to go easy on Putin.