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Once again, a German minister is planning to revolutionize his country’s economy in the face of crisis.
In the post-war era, with the country’s economy in tatters, Ludwig Erhard, the legendary economy minister of West Germany, helped ignite the “economic miracle,” or Wirtschaftswunder. Now, the climate crisis has put Greens co-leader Robert Habeck into the same ministry as Erhard — combined with the climate portfolio.
The plan is once again to turn calamity into prosperity.
Bringing climate and economy into the same ministry — as has been done in the United Kingdom and the Netherlands — is an attempt to redefine the terms of the German system, said Sven Giegold, a Greens member of the European Parliament who will become one of Habeck’s deputies. Instead of an afterthought, cutting emissions will become the organizing principle that drives economic competitiveness.
After the Greens backed a coalition deal with the Social Democrats (SPD) and Free Democrats (FDP) on Monday, Habeck will step into a ministry with “a great tradition,” Giegold said. “This is the idea … in the house which has set the order for the market after the Second World War. Now in a new time, it will set the order for the market in a period of a climate crisis.”
The Greens view this as their moment to seize history and see Habeck, who also holds the title of vice chancellor, as the minister to deliver it.
Whether that ambition turns out to be grand, or grandiose, will depend on whether Habeck, 52, can use his powers of persuasion to secure acceptance for the energy transition.
“Climate neutrality is a gigantic transformation project, with an immense amount of change … with power lines and wind turbines, old industry and new industry, with fear of job losses and new opportunities. That cannot be organized in an authoritarian way,” he said in an interview with Süddeutsche Zeitung last month. “You have to create an environment for such a change, win society over to it.”
He’ll also have to negotiate a thicket of political obstacles.
Behind every corner, he said, “lurk anger and quarrel.” Even within the government, he is likely to face resistance, not least from Finance Minister Christian Lindner, a free-market liberal who will control public spending.
There will be a lot to spend. The coalition’s plans — for the green transformation and other policies — are estimated to cost an additional €50 billion to €60 billion per year.
The coalition proposal is “the most ambitious climate protection program Germany ever had,” said Claudia Kemfert, head of the energy, transportation and environment department at the German Institute of Economic Research in Berlin. “I would agree that this is some kind of German Wirtschaftswunder … it has potential to reach that level, but only if it works out.”
For example, the new coalition government wants to end the use of coal for power and ramp up the proportion of clean energy from around half today to 80 percent by 2030. The total amount of electricity needed will also grow to power the 15 million electric cars that are supposed to be on the road by 2030 and to heat homes as fossil fuel systems are phased out.
A classic free marketeer, Lindner isn’t a natural enabler for Habeck. The FDP ensured that the coalition agreement was free of plans to increase taxes or take on more debt, casting some doubt over how Germany’s green transition will be funded. And while the Greens prefer to use regulations to limit climate-damaging behavior, top-down bans of any kind are anathema to the liberals.
Giegold thinks the coalition agreement outlines a “clear division of labor” between the two men, and said there is a cooperative spirit between the parties. “One has to be ready to enjoy also the successes of your partners,” he said. “Of course, time will tell how far we get with this. But that is clearly the ambition.”
“The conflict will really be in the concrete policymaking next year. And then the question will be if the coalition can hold together,” said Christian Flachsland, professor of sustainability at the Hertie School in Berlin.
Flachsland, who authored a pamphlet advising on the government structure that would best deliver climate policy, said the creation of the dual economy and climate ministry was a good step. But “at some point, the chancellor would have to come in and ensure … that ministries don’t get lost in clashes leading to nondecisions.”
Lindner may not even be Habeck’s most pressing challenge.
With Germany also shutting off its nuclear reactors next year, Habeck will have to revive the country’s stagnating wind and solar power expansion in the face of stiff opposition from lobbyists, conservationists and nimbyism, as well as state governments and their acres of red tape.
Green track record
He’s had experience making it work. During his tenure as minister for energy, environment and agriculture of his home state Schleswig-Holstein between 2012 and 2018, the region’s wind power capacity doubled despite fierce resistance.
In Schleswig-Holstein, “he had the most intensive training possible for what’s awaiting him on the federal level,” said Torsten Albig, the northern state’s Social Democrat premier between 2012 and 2017.
Habeck, who also served as Albig’s deputy, had no prior executive experience before taking over the regional ministry. A relative latecomer to politics, the book author and philosophy graduate joined the Greens in his 30s and rose swiftly through the ranks. His pragmatism, said Albig, was what set him apart from many of his fellow Greens at the time.
“He’s someone who has clear values and clear positions, but based on these positions he always tries to understand the other side — to understand why the fishermen, the farmers, the hunters are the way they are, what bothers people about wind turbines and power lines, to then bring that together,” Albig said.
Habeck established a reputation for striking difficult compromises. Between conservationists who wanted to ban mussel fishing and fishermen fearing for their livelihoods he once negotiated what became known as the “mussel peace,” a plan for sustainable fishing activity; elsewhere, he sought dialogue with farmers to nudge them toward greener agriculture.
When he started, Albig said, “he didn’t know much about agriculture. And yet he managed that at a farmers’ conference he wasn’t just booed out of the room, but booed out of the room with respect. One has to work for that in Schleswig-Holstein, especially as a Green.”
He brought that pragmatism to the party’s top level in 2018, when he and Annalena Baerbock — like Habeck part of the Greens’ “realist” wing rather than the more dogmatic party left — were elected as co-chairs. Their approach has been credited with bringing the Greens into the mainstream 40 years after they were founded as an anti-nuclear protest party, broadening their appeal and catapulting them to a solid third place in September’s election.
Tousled and flexible
An avowed opponent of neckties — another point of difference with the sharp-suited Lindner — Habeck usually appears in public in jeans and unshaven. In interviews, he has a penchant for giving sweeping but frank answers to big questions.
At times, the Green leadership team’s approach has earned them criticism from more fundamentalist party members for making too many concessions, like leaving the transport ministry to the car-loving liberals or, on a regional level, going along with conservative plans for a controversial motorway.
Habeck has shown flexibility in reaching his political aims. In 2016, he slowed the pace of the renewables rollout in Schleswig-Holstein amid growing opposition in order not to endanger “acceptance of the energy transition.”
The optimistic view is that this pragmatism will allow Habeck to transcend his party and bring everyone along. With Social Democrats looking out for the social impacts, liberals backing business and Greens pushing the transformation, Kemfert said, it could be the “best of three worlds.”
Albig, the ex-premier, expects Habeck to show the world — and skeptics in German industry — how to make the green transformation an economic success.
“This is the great chance, including for Robert Habeck, to demonstrate that we don’t just do this because we’re good people and like to breathe clean air, but because we’re into jobs and prosperity,” he said, “and that we become once again the country of the economic miracle — but a sustainable economic miracle. That’s the task he’s facing.”
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