For the first time in history a Green candidate, Annalena Baerbock, is poised to take over the role of Chancellor. What would it mean if the environmental, left-leaning party of Bündnis 90/Die Grünen (Alliance 90/The Greens) were to lead the EU’s most important economy? What plans do the Greens have for the transformation of the German and European economy? What do they mean by the term “environmental and social market economy”? Will there still be trade agreements under a green Chancellor? What goals do the Greens have for trade and foreign policy?
Alliance 90/The Greens on the brink of chancellorship?
For the first time in the history of the Federal Republic of Germany, a Green candidate has a realistic chance of becoming Chancellor. Just four months prior to the federal elections, the Greens – according to the key polling institutes – have an approval rating of 26 to 28 %, making them the strongest political power for the first time, ahead of even the CDU. While the parties of the grand coalition, the conservative CDU/CSU and the social democrats, the SPD, have lost a huge amount of trust due to the recent, painfully exposed, deficits in digitalisation and education and their crisis management of the COVID 19 pandemic, the Greens are benefitting from the hope of the German people that, under their leadership, not everything will be different, but much better. Issues that surveys show to be the main priorities for people during and after the coronavirus crisis, such as climate change, are areas where the Greens have real credibility. That is also reflected in Green Chancellor candidate Annalena Baerbock’s personal approval ratings, who is well ahead of her rivals Armin Laschet (CDU) and Olaf Scholz (SPD). So the questions more and more people are now asking, both in and outside Germany are: What do the Greens want and what would a green Chancellor mean for Germany, the EU, the economy and international trade?
Industry concerns about a green Chancellor
German industry, despite some thawing of relations over the past few years, is fundamentally sceptical about the plans expressed by the Greens in their draft manifesto. According to a current Civey survey, more than two thirds of private industry decision-makers in Germany fear a negative trend in the German economy should Annalena Baerbock become Chancellor. These concerns are currently being significantly fuelled by the draft manifesto the party is due to endorse in mid-June at its party conference, which has been largely criticised by German industry associations (“too little light – too much shade”, BDI).
Transformation of the economy, new rules for international trade policy – the goals of the Greens
The Greens are fundamentally sceptical about international trade agreements. After a hefty battle against TTIP both in and outside the parliamentary sphere, according to their draft manifesto, the Greens plan to oppose the EU Mercosur Treaty and have no wish to ratify the CETA agreement in its current form either. Instead they plan to introduce additional requirements at the European level, such as binding and enforceable environmental and social standards, which would hamper the signing of any new trade agreements. An import stop on agricultural products linked to illegal deforestation or human rights infringements also plays a prominent role in the draft manifesto.
A central component of the Greens foreign policy goals is their desire to foster fair competition by extending anti-dumping and anti-subsidy instruments – an approach also designed to ensure more consideration is given to environmental and social standards. The introduction of a border adjustment of CO2 costs, which the EU also advocates, is another key element of their trade policy goals. By reforming the EU state aid legislation, the Greens want to prevent unfair competition with state-subsidised companies from non-EU nations, and plan to introduce a binding and effective supply chain law at both the national and EU level, which would include civil liability clauses for companies. The social market economy is to be transformed into an environmental and social market economy. The fundamental concept behind this is a desire to entrench sustainable commerce and environmental protection as key policy elements within the social market economy. According to their draft manifesto, the Greens see a need for change in the underlying framework and a rethink of Germany’s economic policy. For instance, they want the economy to have climate neutrality as its target and establish a circular (recycling) economy. Research and innovation to promote climate-friendly commerce will focus firmly on products and services with sparing use of resources.
Can the Greens implement their goals in Germany?
These ambitious goals inevitably raise the question of implementation. Which of the plans outlined in the draft manifesto might actually become part of any coalition agreement is hard to predict with any real certainty at this point and before any election results are known. However, based on the experience of coalition negotiations over the past few years and current statements being made by leading representatives of the Greens, some realistic assumptions can be made. For instance, it has been clearly articulated on several occasions that the Greens would claim the Economic Affairs portfolio to ensure effective implementation of their economic policy goals. From the experience of the past few years at the individual state level, it seems likely that the Greens would have many of their demands met in coalition negotiations, as has happened in Baden-Württemberg, Hessen, Brandenburg, Hamburg and also Bremen. Moreover, the Greens are currently represented in 11 out of the 16 state governments, which would give them considerable additional influence on federal politics via the Bundesrat (Federal Council).
Can the Greens also achieve their goals at the European level?
Many goals of the Greens’ draft manifesto can only be achieved at the European level. So the crucial thing will be how much traction a green Chancellor would have in Brussels. Many believe Baerbock will have a difficult position in Brussels as there is currently only one EU Commissioner who sees himself as part of the EP faction of the Greens, and there are currently no Greens within the European Council of Heads of State and Government. However this analysis fails to take into account the fact that Ursula von der Leyen (CDU), the current German President of the European Commission is also a German who was considered very progressive as a minister under Angela Merkel and, even before her election to the role of President of the Commission, placed particular emphasis in her programme on classic green issues. For instance, the first priority of her government programme is the European Green Deal. In the recent past, the President of the ECB, Christine Lagarde, has also made positive remarks about Annalena Baerbock and her policy approaches and goals. So a Chancellor Baerbock may already have some very central and influential allies in Brussels, aside from the grassroots movements like Fridays for Future and the general zeitgeist, and could potentially have an influence on the policies of the European Union in that sense.
Can the Greens use the G7 to implement their policies at the international level?
Since the cooperation of the major emitters like China (29 % of global emissions), USA (13.9 %) and India (6.9 %) is essential to combat climate change, the G7 alongside the EU could provide an opportunity to pursue green policies at an international level too. A Chancellor Baerbock would be aided by the fact that Germany is due to take over the chair of the G7 in 2022. Due to the informal structure of the G7, where the chair plays a particular role in the organisation and agenda of the summit, there are some significant opportunities for additional influence here. Even though, apart from the USA, the biggest emitters are not part of the EU or the G7, a combined axis of EU and G7 would be a powerful alliance for jointly entrenching the Greens’ proposed climate change instruments within international trade. The fact that the USA, following the election of Joe Biden as President, now wants to adopt a more climate-friendly policy is evident from the appointment of former US Foreign Minister John Kerry as the 1st Special Presidential Envoy for Climate. At an international level too, the issue of climate change is already back on the agenda. For instance, according to the latest international “Peoples’ Climate Vote” survey, two-thirds of the world’s population view climate change as a global emergency. So a green Chancellor Baerbock could – with the tailwind of powerful NGOs like Fridays for Future, amongst others – successfully introduce national, European and even international instruments which would have significant implications for international trade and industry.
Contact: Dr Benjamin Seifert, Johannes Wendlinger