In its first year, the administration of German Chancellor Olaf Scholz has driven the biggest overhaul of German policy since World War II. The next year could be even tougher, further absorbing Berlin’s bandwidth to Europe’s detriment.
Scholz, a former German minister of finance, came to power pledging continuity with the era of his predecessor, Angela Merkel, who oversaw 16 years of prosperity and stability in Europe’s largest economy, enabling her to take stewardship of the broader region.
However, Russia’s invasion of Ukraine cast a shadow over her legacy and forced him to focus on re-arming Germany, replacing the cheap Russian energy deliveries upon which it relied, and accelerating a shift in foreign policy toward more strategy and less mercantilism.
Photo: EPA-EFE
The zeitenwende, or epochal change of times, as Scholz dubbed it, has proven all the trickier given the heterogeneity of his government — the first three-way coalition at national level in decades.
His center-left Social Democrats, the Greens and the liberal Free Democrats, have had to wrangle to reach compromises, sometimes delaying decisions.
Some European allies say the focus on domestic challenges and internal politicking have distracted Berlin from regional cooperation and especially the key German-French motor that traditionally drives the EU.
Their frustration reached boiling point when Berlin did not seek to coordinate its latest mammoth economic relief package with other European capitals to avoid market distortions.
A French diplomat said Germany appeared to be isolating itself, adding that the leaders of France and Germany no longer spoke every day, unlike under Merkel.
“That’s not good,” the diplomat added.
Scholz’s understated communication and leadership style — which helps him manage his coalition, but can come across as aloof — has not helped.
Given the dimension of the problems, his government has gotten through its first year pretty well, said Frank Decker, a political analyst at the University of Bonn.
“But the problems remain and will worsen in the future,” he added.
The cold weather has only just begun, testing Germany’s ability to stay warm without Russian gas deliveries, and prices are unlikely to return to what they were.
The German economy is expected to dip into recession next year, and the government’s planned tougher approach toward top trade partner China, as well as new US green subsidies, could pose further challenges to Germany’s traditional free trade, export-driven business model.
Relief measures worth hundreds of billions of euros have helped Scholz’s coalition stave off serious social unrest due to soaring energy prices in the wake of the Ukraine war, but recent polls suggest it has lost its majority.
“This country is in search of a new foreign policy posture, in search of a new business model,” said Thomas Kleine-Brockhoff, a fellow at the Washington-based German Marshall Fund think tank.
“As long as it does that, it is going to join the ranks of those European countries that are no longer available for European leadership,” he said.
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