Germany: The Green Party’s economic plans | Company | German economic and financial news | DW


Germany faces incredible headwinds in a post-COVID world. Whichever party wins the federal elections in September, it will be responsible for helping to reinvent the economic power of Europe, whose industrial export model risks becoming obsolete.

A new Forsa / RTL / n-tv opinion poll on Tuesday showed the German Green Party had taken a seven point lead over Chancellor Angela Merkel’s Tories, who, if retained, could see the Greens take power from the center-right CDU / CSU alliance. .

The surge in popularity has made many wonder whether a party, which has traditionally championed a single cause – the environment – can be pragmatic enough to rebuild Germany‘s economic base. DW reveals what the Greens promised in their 137-page economic policy document released last month.

Reinventing Germany

The Green Party has announced that it will review Germany’s so-called debt brake, which is enshrined in the Basic Law and prevents governments from taking on too much debt. Although Merkel’s administration broke these rules to cover costs related to COVID-19, it has pledged to return to a balanced budget by 2022.

The Greens, for their part, believe that the current low interest rate environment is too good an opportunity to miss. New cheap loans will allow much greater investment in the green economy, which is why the party has pledged to spend 500 billion euros ($ 600 billion) over the next decade for “transformation.” socio-ecological ”of the economy.

And he will need it. Two of Germany’s biggest export markets – the United States and China – may not be as willing customers in the future. China is becoming increasingly self-sufficient, while the United States appears determined to uphold the protectionist policies adopted under former President Donald Trump.

The Greens’ spending plans are expected to help deal with the unprecedented headwinds caused by the transition to electromobility, which will dramatically increase the use of automation in vehicle production and could result in the loss of 400,000 jobs alone. ‘in Germany over the next decade.

The Greens have promised that new jobs will be created through energy and digital transitions, while a wealth tax and a 50% increase in social assistance will help reduce inequalities.

New venture capital funds will be created to promote research and development and support innovative startups, according to the economic policy document.

But some analysts have warned that the Greens’ gigantic spending plans will make German exports even less competitive, while many of its ideological positions – such as its opposition to the Nord Stream 2 pipeline – will prepare Germany for another confrontation with people. as Russian President Vladimir Putin.

Annalena Baerbock is the Green Party candidate for chancellor

The environment above all

As you can imagine, the Greens want Germany to engage more ambitiously in the fight against climate change and will seek to reduce CO2 emissions by 70% instead of 55% by 2030. This will mean that the carbon tax, introduced in January, will more than double by 2023, which is likely to hit businesses and drivers hard.

The party also pledged to step up investment in renewable energy, not just in the electricity sector, while promising that low-income people will see their utility bills reduced.

By 2030, a green government has pledged to allow registration of only emission-free vehicles and will aim to make short-haul flights redundant. Instead, the party will seek to significantly expand rail traffic and promote more environmentally friendly tourism.

Proposed tax increase

The Greens say its ambitious spending program will also be funded by a 1% wealth tax on assets over 2 million euros ($ 2.4 million).

The proposals suggest that the party will also crack down on certain business expenses that can be offset by taxes. For example, companies currently often claim senior management salaries of € 500,000 for tax-deductible expenses.

Income taxes will also increase for those earning over € 100,000, including a new top rate of 48% for income over € 250,000 – down from 42%, while those earning an average salary should see their lower taxes, depending on the party.

A charging station for electric cars

Only electric cars can be registered by 2030 as part of the Greens’ plans

Other economic commitments of the Green Party:

  • The legal minimum wage will drop from € 9.40 to € 12.
  • Germany’s two-tier health insurance system will be streamlined, and high-income people who opt for private insurance may also have to pay for the public health system.
  • A 2.5% cap on rent increases for domestic tenants.
  • The Harz IV social protection system will no longer penalize beneficiaries for failing to meet job search goals.
  • Germany’s new supply chain law will be toughened, requiring companies with more than 1,000 workers to comply with social and environmental standards at all stages of sourcing and production.
  • At least a third of the positions on the boards of directors of listed companies should be held by women.
  • An expansion of the circular economy which encourages the repair and recycling of all products.
  • A right to work from home will be created and workers will be able to reduce their working hours from 40 to 30 hours.


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