Thread by @AndrewWattEU

It’s out: the coalition agreement of Germany’s traffic-light coalition.
wiwo.de/downloads/2783…
All of 177 pages covering everything with what to do about Russia to what to do about wolves. (yes, really).
What’s in it for Europe?
Thread (w/ focus on economic issues).
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A first point is just how pervasive Europe is. “EU” or “europ” is mentioned no less than 393 times! Scarcely a policy area that does not somehow involve Europe. 🇪🇺 is domestic politics. It is also a testament, tho, to an (ex ante) willingness by 🚦to engage w/ EU partners. 👏
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EU structures: 🚦 commits to supporting the Conference on the Future of Europe – including “Treaty amendments where needed”. A right of initiative for the EP, transnational lists and “Spitzenkandidat”, QMV in foreign policy. Steps on a path towards a "European federal state".
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Economic governance: the statement on the Stability & Growth Pact is short & carefully worded so as not to tie hands. It's the "basis" for ensuring growth, sustainable public finance & public investment. But the “further development” of the rules sd contribute to these goals.
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Reforms should render the rules simpler, more transparent and effective. Who could disagree?
The wording sets up a tension between the Chancellery (SPD “further development”) & finance ministry (FDP make existing rules more effective). Likely to be a major faultline within 🚦.
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Similarly, the passage on Next Generation EU is notable for what it does not say. It notes that NGEU is limited in volume & time. Simply a statement of fact. It is silent on whether it is necessary/anathema to run subsequent (larger, more permanent) programs based on EU debt.
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Transnational investment: There is a welcome commitment to investment in pan-EU infrastructure (digital, rail, renewable energy networks). This is notably missing in NGEU (imk-boeckler.de/de/faust-detai… ). It remains rather vague, however (battery & hydrogen IPCEIs are mentioned).
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Social/employment: 🚦commits to supporting the initiative for a European minimum wage directive with “binding minimum standards”, wants to “further develop” European works councils while ensuring that national (i.e. German) codetermination rights are not undermined by EU rules.
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The provisions on national fiscal policy are also critical for 🇪🇺 as EU rules and those in the largest MS can only diverge so much. 🚦has agreed on creative ways to square the circle of boosting public investment while avoiding tax rises & respecting deficit rules.
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In a nutshell: investment will be financed by various bodies off the central govt balance sheet. The current rule suspension will be used to borrow next year to finance inv. in subsequent years. And the rules by which the structural deficit is calculated will be reviewed.
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Brussels & ational capitals will be watching carefully. Off balance sheet financing is difficult under current EU fiscal rules. Many (incl. @IMKFlash) are calling for investment to be treated differently (Golden Rule) and urging reduced reliance on “structural” variables.
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A similar dynamic is likely regarding energy policy. The agreement contains a commitment to new gas power stations to replace nuclear & coal. Gas will (w/ conditions) certainly be included in the EU #taxonomy and this will only be possible if 🇩🇪does not block nuclear power.
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Lastly, while not in the agreement, it is reported that Greens will have the right to propose the next EU Commissioner while SPD gets to nominate the next head of #Bundesbank. The latter likely raises the chances of @Isabel_Schnabel who might then well succeed Ch. Lagarde.
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Overall I see the agreement as a significant net positive in terms of 🇩🇪engagement in 🇪🇺. The FDP in the finance ministry (& €group) remains a concern. But FDP red lines on econ govt. reform & a common fiscal capacity are not in the agreement.
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The coalition commits to supporting EU goals in many areas, not least climate, with a commitment to stick to the 1.5 degree warming path, but also in the social field attempts to increase the strategic autonomy of the EU. There is an openness to treaty change.
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With some importantmatters left open, intra-🚦 conflicts are inevitable. We will see how far #Richtlinienkompetenz (the right of the Chancellor to decide the broad lines of govt policy) goes in practice.
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cc: @LaszloAndorEU @pisaniferry @SDullien @fsaraceno @CreelJer @MarioHolzner @gregclaeys @ZsoltDarvas @socialeurope @__Sotiria @_nunoeca @adam_tooze @JeremyCliffe @gabischoff @sven_giegold @MarterbauerM @heimbergecon @AchimTruger

Update: the key points of the agreement have quickly been translated en francais! 👏
@fsaraceno
legrandcontinent.eu/fr/2021/11/25/…
An emerging European public space.... 🇩🇪🇪🇺🇫🇷

(Sont 177 pas 117 pages! #Gründlichkeit)