This article is part of our special report What to expect in EU policymaking in 2022.
The new German government has made reforming the EU, as well as its own economy and society, a top priority. This year will show how fast and how much the ruling coalition wants to move and how well it will coordinate with its key ally France along the way.
The emphasis on the EU became clear in the coalition agreement between the Social Democrats, the Greens and the liberal FDP. Europe features prominently in almost every chapter of the agreement.
With the French EU Council presidency getting in full swing, Germany is pushing for a more sovereign EU – a notion close to French President Emmanuel Macron’s heart – and wants to discover new pathways to reform the bloc, together with France.
“The success of Europe is our most important national concern,” Chancellor Olaf Scholz said in his first government statement in mid-December. “European policy has become a major part of our domestic policy,” he added.
However, there are major challenges ahead at European level – especially regarding the reform of the EU budgetary rules and the rule of law issues with Poland and Hungary.
At home, Germany will focus particularly on the green and digital transition “to set the right course into the future,” Scholz said, adding that “Germany will make the transition to a climate-neutral and digitised society in the 2020s.”
A sovereign Europe
Berlin is particularly keen to advance European strategic sovereignty by increasing its ability to act in a global context and to be less dependent on other players in areas such as energy supply or digital technology.
Germany’s ambitions are closely aligned with France’s, which will put a special emphasis on the EU’s strategic sovereignty during its presidency.
“It’s about how we can make Europe strong, European sovereignty in all the dimensions that go with it,“ Scholz said during his state visit to Macron in mid-December.
The new coalition wants to foster cooperation with like-minded democratic states that share the EU’s democratic values and to enable the EU to compete in the “competition of systems” with authoritarian states.
One of the major tools to enhance the bloc’s strategic autonomy is the ‘Strategic Compass’, which aims to develop Europe’s strategic and military capabilities to advance the EU’s capacity to act in the world.
The compass was launched during the German EU presidency in 2020 and is expected to be finalised during the French presidency this March.
Another change the German government will push for is to make more use of qualified majority voting in the EU’s external relations. “We want to use the possibilities of the Lisbon Treaty for this,” Scholz emphasised in December.
“It must become the rule that we in Europe can decide by a qualified majority, in the Council, even in areas where that is not the case today. That is not a loss, that is a gain in sovereignty,” he added.
EU reform and the Franco-German tandem
Germany has set itself ambitious goals to launch a reform process of the EU.
The new government’s coalition agreement specified that they want to use the ongoing Conference on the Future of Europe as a starting point for EU reform that should ultimately lead to the “development of a federal European state”.
Macron welcomed Berlin’s ambitious approach and called for efforts to “regenerate a foundational momentum” in December.
“This momentum will perhaps lead to a reshaping of our treaties, and I welcome the fact that the new coalition in Germany has set such an ambition,” he added.
While major reform of the EU is currently off the table due to the unanimity requirement that comes with it, Scholz is advocating for a multispeed Europe.
“We must always be prepared to try out solutions in groups of states if not all of them are ready yet, as we have already done with Schengen, with the euro or also in security and defence policy,” he stated.
Scholz also stressed the need for close alignment with France on European topics, as the “Franco-German understanding is the precondition for progress in Europe.”
The points of friction
But there are some points of friction in the Franco-German couple, most notably the reform of the EU’s fiscal rules.
France, Italy and several other member states are pushing for more flexible EU fiscal and debt rules.
“We will not succeed … if we return to a budgetary framework which was created in the early 1990s,” Macron outlined during his press conference on the French presidency.
However, with the fiscally conservative FDP in charge of Germany’s finance ministry, Berlin is hesitant to loosen the strict budgetary rules too much, and too soon.
Although Finance Minister Christian Lindner has shown some willingness to compromise with France and Italy, the issue will remain contentious.
Another potential source of friction may come from Germany’s new approach to member states accused of breaching the rule of law principle.
The new government wants to take a tougher line on countries that violate the rule of law and wants to use existing rule of law instruments “more rigorously and timely.” This will also apply to the disbursement of the pandemic recovery funds, where the traffic light coalition wants to make payments conditional on adherence to the rule of law.
However, Germany also intends to offer closer cooperation to Poland – seen as the major rule of law offender, together with Hungary – in other areas, most notably the Weimar Triangle, a political forum of France, Germany, and Poland.
The climate government
Catching up on climate efforts is another key priority.
“The biggest transformation of our industry and economy in at least 100 years lies ahead of us,” Scholz said in December.
According to the Green economy minister Robert Habeck, Germany is already lagging behind and will fail its climate targets for 2022.
“We are starting with a drastic backlog,” Habeck told die Zeit in late December.
To reverse the trend, Scholz’s government plans to launch a comprehensive legislative programme, covering transport, electricity, industry and agriculture, in the next year to intensify its efforts to reduce carbon emissions.
The EU Fit For 55 package is also on the top of the agenda.
The EU package, that aims to reduce greenhouse gas emissions by 55% by 2030, is planned to become law in 2022.
The government has pledged to “actively support the European Commission in implementing its climate package Fit For 55,” Scholz said, but it remains to be seen which priorities the government will set regarding Fit For 55.