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Germany’s new leaders bring splash of colour after grey Merkel years.

Germany’s new coalition government will take office two weeks from now, but already the country’s newspaper caricaturists are rubbing their hands in glee.

After 16 years struggling for laughs with the dry Angela Merkel, the leaders of Germany’s three-way “traffic light” coalition – named after its parties’ respective colours – are a colourful embarrassment of riches.

Olaf Scholz

Social Democratic Party (SPD) politician Olaf Scholz, the man who will be postwar Germany’s 10th chancellor, is a former finance minister and mayor of Hamburg who prides himself as a model of Hanseatic sobriety.

The balding 63-year-old copied Merkel’s formula of restrained stability to win last September’s election. But friends still remember him as a curly-haired student radical socialist who demanded politics to “overcome the capitalist economy”.

Born in Osnabrück and married with no children, Scholz served as federal labour minister two decades ago under SPD chancellor Gerhard Schröder. His thankless task was to sell painful economic and social reforms that eventually turned around the country – but only after it doomed the SPD’s coalition with the Greens.

Two clouds hang over his record as Hamburg mayor: violent riots between police and leftist groups at the 2017 G7 meeting in the city; and a €47 million tax write-off to a Hamburg bank accused of massive fiscal fraud.

Neither episode enamoured Scholz with the SPD’s left wing and it refused to back his leadership bid – until the pandemic changed everything.

As federal finance minister Scholz abandoned his conservative fiscal prudence to trigger a fiscal “bazooka”: €1.4 trillion in loans and grants to crisis-wracked companies.

His pragmatic leftist stimulus plan united his notoriously fractured party behind him as chancellor candidate. After a tight campaign, Scholz won it the election with social cohesion promises now realised in the coalition agreement: a €12 minimum wage; a new push to build affordable housing, dubbed “the social question of our time”; new child allowances and stabilised pensions.

“Increasingly I have a feeling that something is growing together,” said Scholz on Wednesday.

Olaf Scholz of the German Social Democrats (SPD), who will very likely become the next German chancellor, speaking to the media in Berlin on Wednesday. Photograph: Sean Gallup/Getty Images

Olaf Scholz of the German Social Democrats (SPD), who will very likely become the next German chancellor, speaking to the media in Berlin on Wednesday. Photograph: Sean Gallup/Getty Images

Christian Lindner

Scholz’s right-hand man in government is Christian Lindner, leader of the liberal Free Democratic Party (FDP). A pro-business politician, the 42-year-old future finance minister loves soaring rhetoric, slim-fit suits and classic cars – “or anything that can be filled with petrol”.

He almost ran out of road in 2017 after walking out of advanced coalition talks with Merkel and the Greens. But Lindner is safer than ever now with a coalition deal that held two key lines for well-heeled FDP voters: no tax increases and a return in 2023 to the so-called fiscal brake.

The latter forces the federal government to balance its budgets and avoid deficit spending – much to the chagrin of SPD leftists and Greens, who view infrastructure projects as investment in the future. Competing coalition fiscal ambitions necessitated hazy financing in this week’s coalition plan. The future finance minister is reportedly already on the hunt for unspent pandemic funds and lending loopholes at state-owned banks.

A similar ideological balancing act covers the coalition’s EU ambitions. Berlin wants to “develop further” EU fiscal rules to secure growth and foster green investment, but appears to forego extending centralised EU borrowing beyond the pandemic.

In all of this Lindner promised this week that Berlin will play a “moderating” role in debates between France and the more frugal Hanseatic counties.

Robert Habeck and Annalena Baerbock

Bringing a final splash of colour to the traffic light coalition are Germany’s two Green leaders. Robert Habeck, a part-time philosopher and children’s book author, takes the economics portfolio – beefed up with a new climate component.

As Germany closes its last nuclear plant next year, the 52-year-old’s ambitious task is to double – to 80 per cent by 2030 – the renewable share of Germany’s energy mix.

His co-leader Annalena Baerbock, a former professional trampolinist, will take on the diplomatic highs and lows as Germany’s first-ever woman foreign minister.

The 41-year-old will adopt a more robust line on Russia and China – in particular removing Berlin’s backing for an EU-China trade deal.

On EU reform, after years of Merkel ambivalence, Berlin’s traffic light has turned green on an EU “constitutional convention and the further development of a federal European state”.

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