Scholz Elected by Parliament to Become German Chancellor

Olaf Scholz was elected chancellor by Germany’s parliament, clearing the way for the Social Democrat to take charge of tackling a brutal Covid-19 outbreak and a raft of geopolitical challenges including the standoff over Ukraine.

He will be sworn in later on Wednesday, ending Angela Merkel’s 16-year tenure and becoming the country’s ninth chancellor since World War II. The outcome in the Bundestag wasn’t in doubt because of his three-party coalition’s majority.

The 63-year-old, Merkel’s vice chancellor for the past four years, represents renewal at the top—but not too much. Voters who awarded him a narrow victory in the Sept. 26 election saw much of what they liked in Merkel—a steady hand and competent, if not charismatic, leadership.
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He’ll preside over his inaugural cabinet meeting this evening, taking over after Merkel asserted Germany’s status as the paramount power broker in the European Union and one of the leading countries in the West. Scholz will have to learn how to apply Germany’s leverage amid threats on Europe’s eastern frontier and the ascendancy of China as a superpower.

He’ll also have to deal with mounting pressure from the U.S. over the Nord Stream 2 gas pipeline connecting Russia with Germany’s north coast. According to Bloomberg documents and others familiar with the plan, the U.S. would pressure Germany into stopping the nearly-finished project if Vladimir Putin invades Ukraine.

“Clearly Russia has the ability to blackmail Germany and Europe,” Marcel Fratzscher, president of Germany’s DIW economic research institute, said Wednesday in a Bloomberg TV interview. “My hunch at the moment is this pipeline will not take off, that it will be blocked permanently.”

Scholz has already demonstrated domestic political prowess, deftly assembling a government with two other parties with sharply diverging policies—the Greens and the pro-business Free Democrats.

The coalition, which holds 416 of the Bundestag’s 736 seats, was forged more quickly and seamlessly than most political observers in Berlin expected. Scholz was able to receive 395 votes out of 707 cast during Wednesday’s vote.

Each party’s fingerprints are visible in the 177-page agreement. The SPD secured a minimum-wage increase to 12 euros ($13.50) an hour and pension guarantees; the Greens brought the country’s coal-exit date forward to 2030; and the FDP won out on a promise not to raise taxes and to preserve constitutional debt limits.

Political fights, however, are already in place. Greens pledge to bring Germany up to speed in fighting climate change. They have committed billions to invest in renewable resources to help them reach carbon neutrality. The FDP has assured its base that it’ll keep government spending and debt in check.

Continue reading: How Germany’s New Government Plans to Be the Greenest One Yet

Christian Lindner, the FDP chairman who will be Scholz’s finance minister, already sounded a warning on Tuesday, saying the government is observing inflation—or “monetary devaluation”—very closely and will factor it into fiscal decisions.

Robert Habeck (incoming Green vice-chancellor, climate policy), said that the party will adhere to the ambitious promises made by the accord.

“There will be differences. Conflict is inevitable. But we are fully aligned when it comes to goals,” Ricarda Lang, a deputy leader of the Greens, said in a Bloomberg TV interview.

Pandemic control will remain the greatest challenge facing the whole coalition. In Germany there has been an extraordinary rise in infection rates in the last weeks. This is despite Germany’s lower vaccination rates than its western European counterparts.

Scholz calls for a nationwide effort to distribute 30 million shots per year to stop hospitals from being overloaded by Covid patients. Also, he backed the general vaccine mandate which will be up for a vote in parliament’s lower chamber before the end.

A one-time SPD activist and lawyer who became a staunch defender of the labor-market overhaul under Gerhard Schroeder, Scholz brushed past setbacks to become labor minister in Merkel’s first “grand” coalition with the SPD. Scholz returned home to Hamburg to win a state election. He governed Hamburg from 2011-2018.

He’s now based in Potsdam outside Berlin, where he won a direct seat for the Bundestag this year. Britta Ernst is his wife and education minister in the eastern state Brandenburg.

Many Germans had dismissed Scholz as far back as summer. However, Scholz won a surprising victory in September’s vote. His direct opponents, CDU Chairman Armin Laschet and Greens’ Co-leader Annalena Baerbock, stumbled in their bid to win over voters.

The new ruling coalition, a formation never tried at the federal level, will have Germany’s first cabinet staffed half by women (excluding the chancellor himself).

Baerbock will be the first female foreign minister, while the SPD’s Christine Lambrecht will be defense minister. Nancy Faeser, an SPD leader from the western state of Hesse, will take over the interior ministry — another first.

European Central Bank President Christine Lagarde said she’s sure that Scholz and his government will “continue to work hard to advance European integration.”

“I have always admired how Angela Merkel steered Germany through many crises,” Lagarde was quoted as saying Wednesday by the Handelsblatt newspaper. “I am sure that Olaf Scholz will work just as calmly, thoroughly and in a focused way on the huge tasks that he and his government have before them.”

—With assistance from Zoe Schneeweiss, Dani Burger and Manus Cranny.


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