Germany’s “Traffic Light”: A True Change Coalition?

Germany gained a reputation for stable leadership under Angela Merkel. Can a new coalition shake things up?


Hayden Toftner

As Germany prepared to head to the polls in September 2021, the country was facing a situation it had not seen in nearly two decades: Angela Merkel would not be the chancellor candidate for the center-right CDU/CSU alliance, after she announced in 2018 that her fourth and then-current term would be her last. The CDU (Christian Democratic Union), the larger of the two parties, has often branded itself as a steady hand; West Germany’s first postwar chancellor, Konrad Adenauer, promised “No experiments!” as the country rebuilt in the 1950s. But Merkel’s retirement threw the CDU into an unprecedented state of inner turmoil.

After the February 2020 resignation of Annegret Kramp-Karrenbauer, Merkel’s preferred successor, the CDU eventually settled on Armin Laschet, leader of Germany’s most populous state, who began the campaign on a less-than-auspicious note. Saddled with dismally low approval ratings after a drawn-out public battle over the alliance’s nomination for chancellor candidate with the more popular Markus Söder, head of the Bavarian CSU (Christian Social Union), Laschet failed to improve his public image as the campaign heated up. Among numerous other gaffes, he was spotted laughing with other politicians while the German president delivered a somber speech honoring the victims of devastating floods.

Despite glowing public opinion of the outgoing chancellor, and general consensus that Germany’s initial pandemic response was excellent, Merkel’s legacy was not enough to overcome Laschet’s unpopularity. The CDU/CSU suffered its worst election result in history, dropping nine points from its 2017 share to just 24% of the vote, coming in second to the center-left Social Democrats’ (SPD) 26%.

The SPD, which has faced its own share of leadership crises in recent years, was revived in part by the stumbles of its conservative opponents. But the party was also buoyed by the candidacy of Finance Minister Olaf Scholz, who campaigned on many of the same themes that voters admired about Merkel: competence and sensible policy. In fact, Scholz’s success may be attributed to the fact that he convinced voters he would not mark too radical a break from Merkel — after all, he had served as a high-ranking cabinet minister during Merkel’s last term.

Exit polling suggests that roughly 2,000,000 voters, mostly among the older segments of the electorate, ditched the CDU/CSU to vote for the SPD. Nevertheless, Scholz has found himself at the head of a change coalition with the environmentalist, progressive Greens, and the socially and economically liberal Free Democrats (FDP). The government, commonly dubbed the “traffic-light coalition” in Germany for the colors of the parties involved, was forged after around two months of relatively smooth negotiations that featured little public fighting or leaks, occasional grumbling from the Greens’ left flank notwithstanding. In late November, the parties unveiled their 180-page coalition agreement, titled “Mehr Fortschritt wagen” (roughly: “Venture more progress”), which is filled with ambitious plans and promises to modernize Germany after years of inertia by speeding up the country’s green transition, reducing inequality, and liberalizing society. But Scholz must manage the interests of three parties, a type of coalition Germany has not seen in 70 years, and the resistance in German politics to radical change. How much progress can we actually expect from the new government?


One of the most striking changes to the German political landscape in recent years has been the rise of the Greens, who achieved their best result in history, securing a solid third-place finish with 15% of the vote. With their ascent to mainstream party status and assignment of key ministerial portfolios, like the economy, agriculture, and the environment, climate policy is certain to play a crucial role in German policy making over the coming years. While Merkel oversaw the passage of a long-term climate action law in her final term as chancellor, the Scholz government has pledged to accelerate the timelines for reducing emissions and transition to renewable energy to ensure Germany remains on course to meet its commitments to keep global warming below 1.5 degrees Celsius. 

But to stay on track, Germany will need to rapidly reduce its consumption of fossil fuels, which as of 2018 still provide 77% of Germany’s energy demands (covering not just electricity, but also needs like heating and transportation), although that figure has trended downwards in recent years and is lower than in many of Germany’s neighbors. A significant portion of that figure is tied to the production and burning of lignite, a particularly polluting variety of coal that is extracted in vast open pit-mines along Germany’s western and eastern borders. Under rising pressure from environmental groups to uphold the country’s climate pledges and halt the damage to the natural landscape surrounding the mines, Merkel’s government agreed to the phase-out of coal by 2038, a date the traffic-light coalition “ideally” wants to move forward to 2030. The government has set 2030 as the deadline for a number of other environmental goals, including the production of 80% of Germany’s electricity needs by renewable means, a number that already stands at 41%, with a goal of complete climate neutrality by 2045. 

To bring about Germany’s green transformation the government has put forth a number of initiatives, from expanding the use of electric rail over private cars and diesel-guzzling trucks, to covering up to 2% of the country in wind farms. Regardless of which plans Scholz and his cabinet ultimately implement, they are committed to making rapid and sizable investments in the sustainability of the largest economy of the European Union, a move that is sure to be watched closely by other members of the bloc as it strives to meet its own climate goals


The government’s climate policies are only one part of the coalition agreement’s pledge to be an “alliance for freedom, justice, and sustainability,” and the proposals to bring about a transformation of German society are equally ambitious. Germany, despite its reputation for industry and invention, has remained peculiarly analog as the rest of the world becomes increasingly digital. Teachers and students bemoan the outdated technology in classrooms, government agencies maintain troves of paper records and regularly communicate with fax machines, and cash persists as the preferred or even exclusive form of payment in many businesses. The traffic-light coalition’s efforts to bring Germany into the twenty-first century will be led by the newly-rebranded Ministry for Digital Affairs and Transport, which the government hopes will oversee a vast expansion of critical digital infrastructure like fiber optic cables for higher internet speeds and improvements to mobile phone coverage, an area where Germany lags markedly behind its neighbors. 

The progressive tendencies of the FDP and the Greens have also left their imprint on the coalition’s plans to reshape German society in other ways. On the issue of cannabis legalization, for instance, the SPD — who have often directed their focus toward economic issues and labor rights to appeal to their working-class base — was hesitant to embrace the idea in full, calling for experimental local projects and studies as a compromise. The coalition has nevertheless agreed to the fully legal and controlled sale of cannabis in licensed establishments. Prospective cannabis businesses have expressed optimism at the news that the government intends to implement legalization within the next year, perhaps motivated in part by the promise of billions of euros in extra tax revenue that could help fund the government’s climate and infrastructure projects. 

The coalition agreement is dotted with countless other liberal priorities, among them lowering the voting age to 16, improving legal protections for transgender people, and in one particularly notable shift for German policy, easing the process of immigration and naturalization. Germany, like many European countries, has not historically considered itself a land of immigration, and bases its citizenship on descent, rather than the birthright citizenship laws of the United States and most other nations in the Americas. 

But this position is increasingly out of line with Germany’s modern reality. During the 1950s and 1960s, when the West German economy boomed and labor shortages threatened to hamper growth, immigration spiked after the government created a “guest-worker” program. Under the policy, the West German government rolled out agreements allowing workers from relatively poor countries, particularly along the Mediterranean, to live in Germany for a limited amount of time, earn money, and then return to their homelands. Most eventually did go back, but many — especially those from Turkey — settled in Germany and brought their entire families, creating a Turkish diaspora community that now numbers around 3 million. 

In 2015, the migration landscape in Germany changed again as Angela Merkel’s government granted asylum to over 1 million refugees fleeing from war-torn regions like Syria and Afghanistan. Merkel’s humanitarian stance earned her the expected blowback from the far-right, but among mainstream parties it appears to have left a durable imprint on the German outlook on immigration. Currently, German citizenship law is relatively exclusive; prospective German citizens are forced to renounce their old nationality unless the process would impose a significant hardship on the applicant. Children born in Germany to at least one foreign-born parent with permanent resident status are required to choose between German nationality and that of their parents by age 23. The new coalition has proposed to scrap these restrictions, allowing all naturalized citizens to retain their original nationality without conditions. Furthermore, the process of naturalization would be streamlined: the required residency period before applying for citizenship would be shortened from eight years to five, and possibly even three with “exceptional integration efforts” like high German language proficiency or volunteer work with a local organization.


All of the domestic policies the coalition intends to pursue — or at least has claimed it will pursue — were negotiated with relatively little tension. Some compromises had to be made; the Greens agreed to set aside their calls for a speed limit on the notorious Autobahn in the face of FDP opposition, while the more business-friendly FDP had to grant to the SPD an increase in the minimum wage to €12 per hour, a key Scholz campaign pledge. There could be some tension down the road if the Greens’ calls for significant state investments at the risk of increasing public debt clash with the FDP’s fiscally conservative sensibilities. But compromise is always priced in when building coalition governments, and these concessions were a small price to pay for wielding the levers of power. The major fault lines between the governing parties are more likely to appear instead on the international stage, divisions that may be coming to a head as it appears more likely that Russian President Vladimir Putin will soon launch an invasion on Ukraine.

In light of the escalating tensions in eastern Europe, Scholz has been forced to walk a delicate line on foreign policy. His own party has a significant contingent of Russlandversteher, translated roughly as “Russia understanders” or less charitably as “Russia sympathizers,” who assert that Germany should maintain a conciliatory foreign policy toward Russia, no matter how egregious Putin’s provocations. Gerhard Schröder, the last SPD politician to serve as chancellor, has deep personal and business ties to Russia, and now sits on the Board of Directors at Rosneft, one of the largest Russian oil and gas companies.

This group of Russlandversteher argues that Germany should not poke the bear that provides over a third of the country’s natural gas imports and purchases $30 billion in German goods each year. Germany was set to become even more dependent on Russia with the opening of Nord Stream 2, a natural gas pipeline through the North Sea that would circumvent the land route running through Poland and Ukraine. Those two countries’ leaders have slammed the deal as a security threat, sentiments echoed by a number of U.S. politicians that have called for sanctions to be placed on the operators of the pipeline, mainly Nord Stream AG (whose Shareholders’ Committee is chaired by none other than Gerhard Schröder). For his part, Scholz has attempted to remain above the fray by referring to Nord Stream 2 as a purely commercial investment, and thus a project in which his government has no involvement. However, he has signaled potential penalties if Putin invades Ukraine, the first time German government support for the pipeline has wavered. 

Scholz has also dispatched Foreign Minister Annalena Baerbock, who was the Greens’ chancellor candidate last year, to Ukraine and Russia for crisis talks as a last-ditch effort to hold off Russian aggression, followed by meetings with U.S. Secretary of State Antony Blinken in Berlin. Although Baerbock was in a position to offer little more than verbal reassurances of Germany and the E.U.’s support for Ukraine, linked with condemnation of Russian hostility, having a prominent member of the Greens in charge of Germany’s foreign policy could herald a shift toward a tougher line against the West’s most prominent adversaries. 

Not only have the Greens called for Germany to reduce its reliance on Russia — for both security and environmental reasons — they have criticized German cooperation with China, saying that economic interests should not outweigh serious concerns about China’s human rights record. It is unclear as of now what kinds of concrete steps Baerbock could take to move Germany’s foreign policy in a more vocally humanitarian direction. She must balance any confrontations with German rivals against the Greens’ strong pacifist streak that continues to run through the party despite her more conventional rhetoric on NATO commitments and defense expenditures. 

Baerbock’s leadership in the foreign ministry will bring her closer in line with recent developments in the relations between China on one hand, and Germany’s European and American allies on the other. Small E.U. member states, like Lithuania and Slovenia, have developed closer ties with Taiwan, even at the price of heavy penalties from the mainland. It is likely, then, that the Greens’ influence will have a lasting impact on German foreign policy, just as the traffic-light coalition as a whole will give German domestic policy a greater focus on equality and social progress.

 Regardless of any disagreements the parties may have at the start, particularly on economic issues, German coalitions rarely rupture in the dramatic fashion seen in other nations. (Italy, for one, is on its third government and second prime minister since its last election in 2018.) It is important to note that most of the government’s proposals are for now mostly vague plans on the pages of a coalition agreement, but even if only a minority of these ideas come to fruition, Scholz and his cabinet will likely leave behind a Germany that is pursuing climate action more aggressively, is more competitive in the digital age, and is more open to newcomers. The traffic-light coalition may not be the wholesale reshaping of German society that some had hoped for after 16 years of status quo politics by the CDU/CSU, but Scholz could be the unexpected leader of one of the most progressive governments in Germany’s postwar history, no small accomplishment for a country that in many ways continues to embody the “No experiments!” ethos of its modern founders.⬩

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