The public struggle within the German coalition government is continuing as liberal junior partner FDP presented a plan for an economic turnaround, provoking Chancellor Olaf Scholz’s SPD to counter the ideas with a rebuttal of their own.

On Tuesday, the SPD issued an internal rebuttal paper to its liberal coalition partner’s ideas for accelerating economic turnaround”.

However, the FDP’s proposal has been criticised as “socially unjust”, according to the SPD response obtained by Die Zeit, which called it “an attack on the hard-working in our country.”

Shortly before its federal party conference, the FDP presented 12 proposals to boost the German economy, one of which aims to reduce red tape – one of the party’s flagship policies.

Cutting red tape has been on their agenda for some time and has become a key issue in their EU election campaign.

However, the more controversial points touch the social sector, the SPD’s home turf. Unemployment benefits are to be heavily sanctioned if the recipient is not willing to take up work. Other benefits and the retirement age of 63 are also being questioned.

“The FDP’s proposals are a relic from the moth box and not up to date,” Rolf Mützenich, head of the SPD’s parliamentary group, told dpa when the proposal came to light over the weekend.

Recently introduced improvements to unemployment benefits have been one of the Social Democrats’ main victories in this legislature, while “fair pensions” were part of their last successful election campaign.

The issue escalates mainly because the ruling coalition is struggling in the polls.

Since the 2021 general election, the three-party coalition of Social Democrats (SPD), Greens and Liberals (FDP) has lost around 19% of public support. The Liberals are struggling to stay above the 5% threshold, according to ntv’s projections.

In the run-up to the European Parliament elections, the Liberals are trying to shore up their image as the party of economic growth with little regard for their coalition

While previously calling the economic turnaround paper “an insult to employees,” SPD’s General Secretary Kevin Kühnert explained on Deutschlandfunk on Tuesday that “the coalition remains the right thing to do” and admitted the right of the FDP to make their suggestions.

On ntv, Green politician Anton Hofreiter urged the Chancellor to step in.

“In the end, I believe that in many aspects, it is much more important for the Chancellor to speak to [FDP’s Finance Minister Christian Lindner] in confidence and say: Look, that’s not how it works.”

Economic crisis exposes Germany’s ideological stalemate

Germany is the worst-performing major economy in the world, but ideological differences within the governing coalition are preventing a strong response, one way or another.

(Kjeld Neubert | Euractiv.de)

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