Economic turnaround: This is what lies behind the controversial FDP paper

The FDP writes a paper – and the SPD howls. Is the traffic light changing now? Why the Social Democrats should read the Liberals’ decision very carefully.

The FDP leadership approved a paper on Monday that raises questions. The first concerns the Germans’ ability to remember: How much knowledge about the Bonn Republic can we take for granted today? The second concerns the future of the traffic lights: How long will the coalition last? And the third concerns the FDP itself: What’s the point of all this?

So let’s work through this one by one.

First of all, because it was so nice, to the Bonn Republic. One of the special political moments on the Rhine was the summer of 1982. Otto Graf Lambsdorff, FDP economics minister in a coalition with the SPD, wrote a paper full of economic policy proposals. It has gone down in history as the “divorce letter”. A little later, the FDP changed its coalition partner. Helmut Schmidt, SPD, had to go. Helmut Kohl, CDU, became chancellor.

Now, almost 42 years later, the FDP presidium has approved a paper full of economic policy proposals. And the Union is rejoicing just as it did back then. “The paper reads like Lambsdorff 2.0,” says CDU General Secretary Carsten Linnemann. “This is nothing more than a divorce certificate for the traffic lights,” says Bavarian Prime Minister and CSU leader Markus Söder.

It sounds as if the Union is expecting the FDP to soon leave the coalition. This paper, which is to be approved at the party conference next weekend in Berlin, must be a great thing. There is almost nothing new in it.

Is the traffic light bursting now? No but.

Some proposals are liberal classics, others are FDP government practice – and what is a little fresher has already become apparent in the past few weeks. The content of the paper is about as expected as the messages from FDP leader and Finance Minister Christian Lindner these days. So: pretty much to be expected.

The following suggestions fall into the classic category: abolish pensions at 63, reduce bureaucracy, abolish solidarity surcharge for everyone, end EEG funding, unleash technological openness (yes, it literally says that one should “unleash” openness). The liberal traffic light government practice has so far been that the finance minister has balanced out the cold progression and implemented faster depreciation for companies.

And anyone who didn’t switch off immediately when Lindner and Co. appeared on TV is familiar with ideas such as the moratorium on social benefits and tax-free overtime, and has heard that the FDP rejects the German supply chain law and is calling for stricter sanctions on citizens’ benefits.

In short: Sorry, dear Union, looking forward to Lambsdorff 2.0 too soon. you have to keep waiting.

And so to the second central question: Is the traffic light now bursting because of a paper full of well-known FDP proposals? No of course not. So is a break in the coalition in the summer ruled out? No of course not.

12 points for an economic turnaround

The Social Democrats’ reflexes are obviously intact. And they are violent. SPD General Secretary Kevin Kühnert accuses the Liberals of having a “cynical view of our fellow human beings” in the “Tagesspiegel”. The SPD will not allow “our country to be run with the sensitivity of investment bankers,” continued Kühnert. “The basis of the traffic light coalition is and remains the coalition agreement.”

Speaking of the coalition agreement. There, on page 158, there is also the following sentence: “From 2023, we will limit the debt to the scope constitutionally specified by the debt brake and comply with the requirements of the debt brake.” In fact, comply with the debt brake, that’s what it says. Nevertheless, hardly a day goes by without some social democrat calling for either reform or the suspension of it.

As a member of a coalition, it is not forbidden to point out your own beliefs from time to time. The SPD likes to be so free – but then it has to admit that to the liberals too. And the Greens, of course. However, their top politicians prefer to remain silent at the moment. Which may be because they weren’t expecting anything other than just such an FDP paper at exactly this point in time.

And so to the third question: What’s the point of all this?

The title of the paper already gives it away: “12 points to accelerate the economic transition”. So that’s the concept that Lindner talks about every day. The agenda with which he wants to create new growth. Which in turn would help his ailing FDP: If the economy is doing well again, the Liberals will also recover quickly. It would be a way out of the death zone.

How good that it’s finally the FDP federal party conference

Lindner and his confidants are already negotiating with the SPD and the Greens. The Liberals are serious. They want reforms, and for that they need an agreement – but not at any price. You have to credibly convey to your own base that you don’t want to be fobbed off by your coalition partners. So it’s a good thing that the federal party conference is next weekend.

“Party conferences are there to set a clear mark,” ex-Euro rebel Frank Schäffler announced weeks ago star at. The FDP representative impressively demonstrated how this works a year ago with the heating law. At that time, the Presidium had presented the delegates with a key motion that, from Schäffler’s point of view, did not offer enough protection for the oil tanks and gas boilers in the German cellars that were threatened by Robert Habeck. So he wrote a tougher proposal himself.

The party and parliamentary group leadership had no choice but to support Schäffler’s initiative. For a short time they seemed like they were driven by their own party base. This shouldn’t happen again, which is why this decision has been made with such language. It is a self-determined offensive. But, no question, it remains a balancing act.

What if the SPD and the Greens hardly move? What if the FDP promises its own people far too much? Well, then maybe this decision will become a divorce paper after all. Perhaps.

Lambsdorff 1.0 was only in the summer.

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