Germany in Crisis: As winter approaches, the governing coalition is being punished.

• Author: Engelen, Klaus C.

With 10 percent inflation, a looming recession, and the threat of deindustrialization, Europe's largest and strongest economy is experiencing the worst erosion of the fundamentals of its prosperity since the post-war economic miracle in the 1950s and 1960s built Germany into an economic powerhouse.

As many of Germany's 84 million citizens contemplate the end of their prosperity, the ruling "traffic-light" coalition of Social Democrats, Greens, and Free Democrats is confronted with a mission impossible. As Politico summed up the crisis: "Two pillars of Germany's economic success story-cheap energy supplies from Russia and low security spending--collapsed this year."

No wonder a recent INSA opinion poll (Meinungstrend) confirms the frustration of German voters with their leaders. With only 44.5 percent approval between them, the three ruling parties of the coalition have lost their majority. Looking at recent opinion polls, the major opposition-the union of Christian Democrats and the Bavarian CSU that ignored the dependency on Putin's gas and oil-was leading the polls. With Friedrich Merz as its new leader, the CDU/CSU reached 27-29 percent, the SPD 18-20 percent, the Greens 17-22 percent, the right-wing AFD 13-16 percent, the FDP 5-7 percent, and the Linke 4-7 percent.

One reason for the eroding support for the coalition under Chancellor Olaf Scholz (SPD), who served as finance minister in Merkel's last CDU/CSU-SPD coalition, was that not enough urgency and speed were brought to bear in the precious months after the Russian invasion of Ukraine in February to mobilize all the country's energy resources. The coalition also disregarded the ambitious climate transition demands by shutting down German nuclear reactors. Relief plans to help households and the business sector cope with exploding gas and electricity prices were delayed, especially by the Green party.

A case in point was the surcharge levy plan proposed by Minister for Economic Affairs and Climate Action Robert Habeck from the Greens. Under this plan, consumers in Germany would take on some of the soaring costs that suppliers are facing as they try to replace Russian gas. The money collected from consumers--households and companies-would have been used to support the struggling big gas importers such as Uniper, SEFE, and VNG. Habeck's gas levy plan, which never happened, was supposed to go into effect by October 1, 2022.

The Scholz coalition eventually opted to rescue the big gas importers directly by the government, making huge investments in the companies. This turned out to be a big blunder on the part of Habeck, the Green minister in charge. When Habeck tried to keep only two of three operational nuclear reactor units online, a decision eventually overruled by the Chancellor, he provoked outcries from the opposition parties who demanded keeping all nuclear reactors working until the end of 2024. Under pressure from the Greens, Scholz had to accept April 15, 2023, as the date when all the reactors in Germany will have to shut down.

ZEITENWENDE PLEDGES IN DOUBT

In his Zeitenwende (historic shift) speech before the Bundestag on February 27, 2022, Chancellor Scholz responded to the Russian invasion of Ukraine three days earlier with big decisions and pledges.

Scholz announced that his government would set...