ZEW President Achim Wambach on the CDU/CSU and SPD’s Coalition Paper

In their recent coalition paper released following exploratory talks about forming a “Grand Coalition”, the CDU/CSU and SPD reached key compromises on EU policy, digitalisation and Germany’s planned energy transition. Professor Achim Wambach, president of the Centre for European Economic Research (ZEW), Mannheim, offers his view on the paper.

“As expected, the negotiating parties have taken a strongly pro-EU stance. Their plans to push things forward at the European level together with France will help to overcome the current roadblocks to decisive action in European politics. However, their commitment to making higher contributions to the EU at this stage of EU budget preparations could weaken Germany’s position in negotiations. As a result, the next German government runs the risk of missing a crucial opportunity to push for fundamental reform of the EU budget.

The parties have also put off making any decisions regarding the development of Germany’s energy transition by announcing plans for a new Commission for Growth, Structural Change and Employment tasked with ensuring Germany meets its climate change goals in the 2020s and 2030s and continues to divest from coal. It is disappointing that the much called-for introduction of a CO2 price was not considered.

Other suggested measures such as the planned Immigration of Skilled Workers Act and tax incentives for research and development will help to create the necessary structural changes in the digital economy. However, their declared intention to ‘create a universal digital portal for citizens and businesses’ is still very vague. In terms of the digitalisation of public services, Germany is currently in the middle of the pack internationally – and that’s being generous – and lags far behind countries such as the United Kingdom, Denmark or Estonia.”