State elections, ambitious future-oriented projects on the federal level and the German EU Council Presidency: a multitude of political opportunities and challenges are lying ahead of us in 2020. An overview: 

State elections in Hamburg, Federal Data Strategy, German EU Council Presidency – what to expect in 2020

  • Thuringia Prime Minister elections: Bodo Ramelow (Left Party) hopes to be reelected as the Free State of Thuringia’s Premier on February 7th. While his coalition missed the absolute majority by four votes, the incumbent only needs a simple majority in parliament in the third round to get elected. However, uncertainty remains over the future coalition to govern the state.  A mediation between the Left Party and the Christian Democrats (CDU) led by former Federal President Joachim Gauck is on the table.
  • Hamburg elections: The fate of the Grand Coalition (“GroKo”) in Berlin may lay in the hands of the city state’s voters on February 23rd. If Peter Tschentscher (SPD), who has been Hamburg’s First Major since March 2018, secures the continuation of the current coalition with the Greens as junior partners, the GroKo will no doubt take a deep breath. If however the Greens’ front-runner Katharina Fegebank stages a coup and shows the SPD to the second place, or even forms a coalition without the Social Democrats, all cards will be on the table: a CDU/CSU minority government, a conservative-green-liberal (so-called “Jamaica”) coalition, or even new federal elections.
  • Local elections in Bavaria and North Rhine-Westphalia: Bavarian local elections will take place on March 15th, the latter on September 19th. Both are considered political litmus tests in an otherwise electorally calm year.

Meanwhile, the federal government spotlights a number of strategic, future-oriented topics for 2020:

  • Hydrogen strategy: According to the Federal Minister of Economics Peter Altmaier (CDU), hydrogen is a “key resource” essential to the decarbonization of the economy. Expectations regarding carbon-neutral or rather carbon-free energy sources are focused on the so-called green and blue hydrogen. Green hydrogen is extracted through electrolysis from other renewable energies; blue hydrogen is obtained by splitting natural gas into hydrogen and CO2. The new hydrogen strategy is expected to be presented during the first quarter of the new year.
  • Data Strategy: As the cornerstones of the government’s Data Strategy have already been laid out months ago, the publicization of the complete concept paper is now highly anticipated. According to the cornerstone paper, Germany is currently failing to utilize the innovation potential of data for the public, economy, academia and state to its full extent. Accordingly, access to data-based business models shall be increased and a new, collaborative culture for data (keyword Open Data) created. Yet, the Groko plans to adhere to the high standards for data privacy for personal data established by Germany and the EU.
  • Pension reform: Proposals regarding an overhaul of the German pension system are expected in March of this year. The commission, which has been formed by the Federal Minister for Labor, Hubertus Heil (SPD) and is presided over by Gabriele Lösekrug-Möller (SPD) and Karl Schiewerling (CDU), consists of ten experts. Their main focus is the future of the statutory, private and the company pension schemes in light of the nearing transition of the “Baby Boomer” generation into the retiring age. The pension scheme as a whole finds itself in dire need of new financing models that will at least curb the increasing need for federal grants to finance the pension funds (currently 100 bn Euros annually).
  • Business Tax: The Christian Democrats and their Bavarian sister party (CSU) are planning to lower business taxes in the light of weak economic activity. Other countries, the US and France in the first place, have already done so and, as a result, the pressure from the business community on the German government has increased. Currently, German companies pay a 28% tax on undistributed profits. The SPD, however, refuses the discussed reliefs for business (as well as the full abolition of the Solidarity charge) unless the income tax for top earners is significantly raised.
  • Investment program: The federal government faces increasing pressure to start a public investment program for the stabilization of the economy. Large parts of the Social Democratic Party (SPD), workers’ unions and numerous business associations request state spending to renovate streets, bridges and schools. However, Chancellor Angela Merkel’s Christian Democrats are so far holding on to the federal debt brake. Could this issue be the downfall of the GroKo?

All that in mind, a possible collapse of the Groko would be more than just inconvenient for the Federal Republic’s EU Council Presidency, which commences on July 1st. Foreign Minister Heiko Maas (SPD) has already laid out ambitious plans: for example, the EU-China-Summit in September 2020. Also in line: more climate protection, European solutions for data sovereignty, as well as the reciprocal control of the rule of law between the member states. Last but not least, a common framework for guaranteed minimum pensions and minimum wage is on the table. Unstable conditions in Berlin would severely endanger this ambitious agenda…


Author:


Dr. Hans Bellstedt

Hans Bellstedt (Ph.D.) is founder and Managing Partner of hbpa. Before establishing his own firm in 2008, he co-founded and managed Plato Communication, a PR and Public Affairs consultancy with offices in Berlin and later also in Brussels, between 1999 and 2007.