Newsletter German Politics - July 2022 - an eventful first half of the year and more to come
Tuesday, 12 July 2022
Tuesday, 12 July 2022
Dear friends, colleagues and clients,
an eventful first half of the year lies behind us. The Russian war of aggression against Ukraine which massively affects German policy and the life of the people living here as well as the ongoing pandemic have dominated the headlines. Besides that, there have been two state elections, in Nordrhein-Westfalen and in Schleswig-Holstein.
The Russian war of aggression, that started on February 24, affects Ukraine, Europe, and the world. The war has had a cruel impact on the people and the country of Ukraine. Although the people in the rest of Europe don`t suffer any physical consequences, they suffer financial ones. Due to Russia’s actions, prices for fuels, energy and food dramatically increased during the last months. Especially the topic of energy is very important to and present in the German public. Many people are afraid of skyrocketing prices for or of a lack of heating gas in the winter. German politicians have been working on and have implemented some solutions to mitigate the impacts for the German economy and the German people. Some of the actions are a fuel discount or a monetary energy supply support (a single payment of 300 euros for everyone).
Another consequence of the war in Ukraine is the provision of a special asset worth 100 billion Euros for the German military. This will have an impact for the maritime industry too. The German shipyards are at capacity with building naval ships, also is the supplier industry in Germany. This fact brings advantages and disadvantages with it. On the positive side, the German high technology is pushed forward. The capacity exhaustion is at the same time bad for the civil shipping, not able to place orders. In the last few weeks it has been decided, that Sweden and Finland will be NATO members in the nearer furture. Already now there exists a deepened cooperation in the field of military action and planning.
Even if the Russian war of aggression dominates politics in Germany, there have been some other important events in the first half of the year. Two state elections (Schleswig-Holstein and Nordrhein-Westfalen) for example. The CDU won both. Consequently, the new governments of both federal states are formed by the CDU and the Greens.
On May 8, 2.3 million residents of the northern German state Schleswig-Holstein, with its capital Kiel, who are eligible to vote, were called to elect a new state parliament. The CDU led by the acting minister president Daniel Günther won the election with a large gap to the other parties. The Greens won many votes in comparison to 2017 and achieved their best result ever. They even overcame the Social Democrats. The party of the Danish minority SSW achieved 5.5% and won 2.4% in comparison to 2017. The two biggest winners of the election, the CDU and the Greens, signed their coalition treaty on June 28. Together they have 48 seats in the state parliament. A solid majority. The coalition treaty says many things about the future relationship of Schleswig-Holstein with Denmark. One very important topic, especially in these challenging times, is a northern European interregional network for green hydrogen (together with the Netherlands and other northern German federal states). Denmark is the most important ally of Schleswig-Holstein regarding the expansion of renewable energies. Furthermore, the new government wants to simplify the cross-border life. A vast pro is, that Claus Ruhe Madsen, the former mayor of Rostock, was announced as new minister of Economy, Transport, Labor, Technology and Tourism. He is the first Dane serving as minister in Germany. That fact gives hope for a strengthening of the relationship between Schleswig-Holstein and Scandinavia, especially Denmark.
The second state election in the month of May took place on May 15. For this, 13 million residents of the western German federal state Nordrhein-Westfalen were called to elect a new state parliament. As in Schleswig-Holstein, the CDU, here with the acting minister president Hendrik Wüst, won the election with a large lead over the Social Democrats (SPD). For them this result is a bitter disappointment. The ruhr area, the large industrial part of Nordrhein-Westfalen, was the heart chamber of the German Social Democracy for a very long period of time. This loss could be interpreted as a bad signal for the SPD governing on federal level in Berlin. The Greens ended as the third strongest party. Because of these good individual results, CDU and Greens decided to initiate coalition negotiations. On June 23 they signed their coalition treaty. Together they have 115 seats, a more than solid majority. Nordrhein-Westfalen is very important in Germany. It is the federal state with the largest population share. Also, it is an industrially coined state, very dependent on low energy prices. The next months will show the strength of the new government.
The two black-green coalitions could be seen as a sign for the next federal election in 2025. The CDU may have reversed its negative trend of the last years and the Greens are still riding on their wave of success. The energy question and the need of climate action support the positions of the green party and are very important for its success. Furthermore, the green federal minister for economic affairs and climate action Robert Habeck (former minister in Schleswig-Holstein) and the green federal foreign minister Annalena Baerbock are the most popular politicians in the public opinion.
The last state election of 2022 will take place in Niedersachsen in October. There, it will be interesting to see if CDU and Greens can score a hattrick. The latest polls see the SPD in front. But a lot of water still flows down the Elbe until October, as we say in Germany.
For now I wish you a sunny and great summer.
Allan Sonne Sørensen
Partner & CEO
+45 (0) 51 88 82 70