The “Traffic Light” Coalition in favour of a Federal Union in Europe: a Critical Assessment of the Coalition Agreement


The new coalition agreement in Germany between Social Democrats, Greens and Liberals (the ‘Traffic Light’ coalition) calls for the establishment of a Federal Union in Europe. What does it mean politically, for Germans and their fellow Europeans? After the 16 years of Merkel’s solid grip on German European policy, the narrative from Berlin has now fundamentally changed, turning the previous prudent and conditional support to political union into a new sense of dynamic progress towards European federalism.

Merkel’s rule of prudence was generated by an abrupt development which proved again that EU integration is not a linear process: the rejection by the French and Dutch electorates of the European Constitution in two referenda back in 2005. Ultimately, Merkel feared her fellow citizens would behave alike, and reject any deepening of the European Union, after having unwillingly given up the Deutschemark for the euro. After 2005, German policy has been guided for three decades by a rigid definition - in principle - of the ultimate limits beyond which Europe should not dare to venture: no transfer union. However, many important exceptions to those self-imposed boundaries were admitted, all forced by unexpected circumstances: the banking union after the great financial crisis, the European Stability Mechanism after the sovereign crisis, and, last but not least, Next Generation EU after the pandemic. Merkel’s rule has, in fact, permitted Europe to overcome a few highly severe crises through institution building. However, reflecting its uneasiness with a creeping Europeanization of national policies, the CDU soon decoupled its contingent and qualified support for specific EU crisis response packages and its ultimate rejection of a federal state among the Europeans. Reflecting this, a majority of Germans remained attached to the idea of European Union, but under the condition that it would not develop further into a self-fulfilling “ever closer union”. This attitude was also confirmed by the Constitutional Court, which imposed that new EU tools in response of the crises of the last fifteen years would be subject to conditionality and rigid limits, to permit the Bundestag to exercise its sovereign rights of democratic control.

The Traffic Light coalition opted for a bolder and more positive European agenda. One could object that this was the consequence of a much-needed window-dressing for a red-green-yellow coalition which was untested and did not have a common line on European issues. The new emphasis on federalism would dissimulate a lack of agreement on topical concrete issues (reform of the Stability and Growth Pact, establishment of a European fiscal instrument, consistent policies versus Russia).

I understand these considerations, but I do not necessarily agree with them. Instead, I would call three deeper political motivations for the German turnaround on the federalization of Europe.

(1) A revival of Joschka Fischer’s speech at the Humboldt University (2000), which launched discussions about the ‘finality’ of European integration and triggered the first attempt to establish a European Constitution. When Greens went back to government a few weeks ago, they could count on a long and unabated support of their voters for bold initiatives going beyond the preservation of current institutional structures in the EU (also note that since a few weeks the Spinelli Group at the European Parliament is chaired by the German Green Daniel Freund). Also the Social Democrats had run in 2017 an electoral campaign under the flag of European Federalism with their candidate Martin Schulz, but his political and personal defeat rather confirmed on that occasion that the German electorate, while remaining pro-EU, seemingly did not want a bigger leap forward.

(2) A positive response to Emmanuel Macron’s Sorbonne speech (2017), only a few months ahead of the upcoming French Presidential elections in April 2022. Here the Traffic Light coalition indirectly expressed a support to Macron’s programme, also fearing the extreme right would be able to establish itself in France’s government (Marine Le Pen and Éric Zemmour). It was today’s French President to launch, five years ago, a new language, calling for a sovereign, democratic and united Europe at the beginning of his term. The past German Great Coalition always studiously avoided to adhere to his choice of words. The CDU chair Annegret Kramp-Karrenbauer even objected to Macron’s views openly in 2019, rejecting his call for more independent European security policies. The idea of European sovereignty is now central in the new government agreement.

(3) A relaunch of democratic multilateralism at a time of unprecedented tensions worldwide. The German government has emerged in an age when democracy discovered itself at risk (even in the United States), illiberalism gained ground even in the European Union (Hungary and Poland), new-imperialism got ground globally (China, Russia, Turkey) and democratically elected governments were reversed (recently, in Burma, Hong Kong and Tunisia). For the new coalition, federalising the European Union is a project, first of all, to preserve the primacy of human rights and democracy within Europe itself, and secondly to commit a large and global player like Europe to fight more vigorously for those goals within multilateral institutions. I see here a deeper cultural imprint from Jürgen Habermas’ doctrine behind these policies: the idea that international policy must be treated as Weltinnenpolitik, a world domestic policy, as the planet forms a unity. Habermas has deeply impacted on German views in our times. It is not a case that so many NGOs acting in the Mediterranean are animated by German youngsters, in a sort of a voluntary civil service in the interest of global mankind.

Summing up, it cannot be considered as a pure formality that the highest domestic policy agreement among political parties forming the German coalition considers the federalization of Europe as an integral part of the national interest. Also outside Germany, the publication of the coalition agreement has created a new state of affairs, with German majority political forces proclaiming their readiness to play the role of ‘federator’ of Europe. This is not business as usual. As a rule, European politics in Member States focuses at best on which public goods they can extract from Europe and, in the worst case, on what European competences political forces wish to take back under their control. Often, Europe is simply ignored, and the building up of European institutions is seen with suspicion. The recently published coalition pact in the Netherlands, for instance, between the four parties making the Rutte IV government does not include any similar reasoning.

What a Federal Europe?

It is with this background in mind that one should read the Koalitionsvertrag, i.e. the coalition agreement.

Pleading for a federal Europe, the Traffic Light coalition adopted a new terminology (in political sciences, the use of words is never neutral) with a reference to the new denomination föderaler europäischer Bundesstaat. To be noted, the three words contain - intentionally – a recurrent concept: a Federative (föderaler) European Federal State (Bundesstaat). However, what seems linguistically clumsy is politically significant. The focus is on federalizing the European Union along the two principles of subsidiarity and proportionality, specifically mentioned in the agreement as core concepts: it implies that transfers of powers should be limited to what is strictly indispensable and objectively justified (subsidiarity) and, also in those cases, not go beyond what is subject to a rule of reason (proportionality). A Federative European Federal State shall therefore remain very far from any centralization, and it might be even less centralized than the European Union, at least in some respects. In some respects, the model is the Bundesrepublik Deutschland, the Federal Republic of Germany, as it developed in the postwar decades. I see here the cultural impact of leading scholars of political science in Germany, like Ulrike Guérot, and of her European Democracy Lab. Equally interesting from a political science perspective, the Traffic Light coalition set the European Charter of Fundamental Rights at the core of the federalization project, to mark the centrality of human rights. Often forgotten by the pro-EU camp because it did not establish any new power or task for the European Union, the charter became the bête noire of the Brexiters during the referendum campaign and has continued to be rejected by all those who – across Europe – refute the EU policies in support of the rule of law. At times, EU opposers may see things clearer than supporters!

The process towards federalisation

The coalition agreement also suggests how to trigger Europe’s federalizing process. It should start with the results of the Conference on the Future of Europe (against any expectation, it could eventually reach a consensus in favour of a strong pro-Federal stance) and achieve further progress with an intermediate constitutional convention to reform the EU Treaties. In the meantime, Europe’s democracy would be reinforced with a common electoral law, including transnational lists and a binding system of Spitzenkandidate, to enhance the legitimacy of the next Parliamentary elections in 2024. On the other hand, the Traffic Light coalition understood well how finding unanimous support for ambitious treaty changes and ratifying them in all 27 Member States might be far from simple in the current situation. Therefore, they put the focus on how to make the institutional framework more flexible and differentiated already before any treaty change. A few examples: in all areas where it is institutionally possible, qualified majority voting in the Council should “be used at best and broadened”; in order to provide the power of legal initiative to the European Parliament, the first best would be to amend treaties, but an intra-institutional agreement might be sufficient; the ‘community method’ should remain the preferred option, but where necessary States should reach progress through intergovernmental agreements or other decentralized solutions, for instance on key policies like security, energy and asylum.

Achieving European sovereignty

The Traffic Light coalition adhered to Emmanuel Macron’s language as from 2017 with several and unambiguous statements. “We want to increase European sovereignty. This means, first of all, that Europe should build up its own capacity of action in a global context and be less dependent and vulnerable in important strategic sectors, like energy supply, health, import of raw materials and digital technology. Europe should however not be isolated.” “Our objective is a sovereign EU as a strong player in a world characterized by insecurity and competition among systems. We are committed to a truly European foreign, security and common defence policy. We need the transition to a qualified majority (with a correcting mechanism to take account of smaller countries).”  

 Turning to specific tools, the coalition agreement listed “full support to the strategic compact”, “reinforced cooperation between European armies of those countries which want to integrate training, capacity, missions and equipment”, “set-up of joint command structures and a common civilian-military headquarters. All of this should be interoperable and complementary to NATO structures”, and “a general political approach to civilian and military EU missions, encompassing the reasons of conflict, exit strategies and parliamentary control (assigning co-decision and control powers to the European Parliament).

These views mark a stark opening compared with the traditionally cautious German approach (I already mentioned Kramp-Karrenbauer’s vehement rejection of the French views on setting-up an autonomous defence capacity for the EU). Still, the focus is more on voluntary cooperation, even if reinforced with joint structures and common strategies, than on federal institution building.  The coalition parties fell short of agreeing on the creation of a European army, nor did they discuss any of the many options which have been pencilled in several academic or policy blueprints to advance in that direction (there is no reference, for instance, to a past SPD plan to establish a 28th army, nor to proposals to integrate today’s Eurocorps in the EU framework).

Multilateralism and strategic solidarity with democracies across the world

Building up a sovereign Federal Union may be seen as ‘simply’ providing to Europe the capacity of being a new geopolitical actor in an age of global competition or, going much beyond it, setting a further pillar for a more democratic, global multilateralism in order to purse global coexistence in peace. For the Traffic Light coalition, there was no doubt that pursuing the first option only is insufficient: “A sovereign European Union shall remain bound to a multilateral and rule-based international system”. “The foreign policy engagement of the EU shall be bound to the pursuit of peace, international human rights and conflict avoidance”.

In order to establish a link between European sovereignty and global governance, the coalition agreement set the objective of “strategic solidarity” of the Federal Union “with our democratic partners”, so that they can pursue aligned policies within multilateral institutions. This is aligned with recent German foreign policies, as inaugurated by the joint German and French initiative to set up a global Alliance for Multilateralism, dating back to 2019.    

The coalition agreement saw three further objectives for democratic peers:

- At global level, they should align their views to reinforce (politically, financially and in terms of human resources) the United Nations, with a reform of the Security Council where all world regions need to be represented. To be noted, coalition parties did not reiterate the traditional German call for getting a permanent seat at the UN Security Council, another important innovation compared to the last decades; however, they neither called for a joint EU seat (which France is still fiercely opposing).

- At transatlantic level, democracies should develop a new strategic concept within NATO based on the fair redistribution of tasks among the EU and NATO itself. This should happen recognizing the concerns of Central and Eastern European partners.

- At regional level, they should strengthen the independence and autonomous capacity to act of the OSCE and the Council of Europe, also against their authoritarian members (the implicit reference is to Russia and Turkey) which have tried to hollow them out.

From a domestic budgetary angle, these policies should be supported by a fiscal expenditure objective of 3 per cent of domestic GDP per year, to be jointly dedicated to international activities (diplomacy, development, NATO obligations). In budgetary terms, this goes well beyond the 2% objectives of pure military expenditure set by NATO, which was even not mentioned in the Traffic Light agreement.

Innovative policies: The Green Hydrogen Union and the International Climate Club

Confronted with such a large set of principles, one could ask which new streams of work could be pursued already in the immediate future.

The Traffic Light coalition identified at least two of them:

  • Establishing a EU-wide Green Hydrogen Union, in order to develop a public infrastructure for the green hydrogen infrastructure, enhancing the ambition of an already existing Integrated Project of Common European Interest (IPCEI). A Green Hydrogen Union would serve the objective of making Germany and Europe the world leaders in the technology of green hydrogen by 2030.
  • Setting up an International Climate Club, a proposal which Olaf Scholz already tabled as Minister of Finance of the previous government in 2021. The International Club, open to all States (with an emphasis on neighbouring regions, but potentially reaching up to China) would be established by the European Union in cooperation with other international institutions, in order to fix a minimum common price for CO2 and create a common Carbon Border Adjustment Mechanism.

Obviously, Germany cannot do all of it alone

The obvious should not be forgotten. This a contractual agreement for the pursuit of a national government coalition. Even if various Eurosceptic leaders immediately pointed to the coalition agreement as a further prove of Germany’s attempts to establish a further dominance over Europe (often repeating the stupid slogan of a German attempt to establish a ‘Fourth Reich’), the Social Democrats, the Greens and the Liberals of Germany do not have any power (and do not want) to create unilaterally a Federal Union. Still, Germany can strive in that direction with the cooperation of a strong core of peer European political forces aligned behind the same design for an entire political cycle. This must become the main purpose of a new generation of European leaders. How to ensure sufficient cohesive support behind Germany’s new proposals?

When Macron launched its plaidoyer for a Federal Europe in 2017, Germany remained silent (in my view, it was the worst mistake of Merkel’s 16 years). Today, the situation may be different, and there is more hope for a positive European response, but it is also important to identify potential shortcomings:

  • Mario Draghi and Emmanuel Macron have recently sponsored the signature of the Quirinale Treaty and presented joint ideas in favour of a renewal of budgetary solidarity and fiscal rules in the EU. Unfortunately, the latter is exactly the area where the overlap between the Traffic Light coalition and the views of Draghi and Macron on how to develop Europe might be the thinnest.
  • France and Italy have been hit more severely and from much worse starting conditions than Germany by the Covid pandemic, and see Europe – both historically and in the current juncture – as a tool to achieve further protection. Germany sees now Europe as an instrument to ensure the most radical modernization of its own productive system since one hundred years, in order to ensure that our continent remains the leading industrial region in a much greener world. Much simplifying, France and Italy have a defensive, Germany a pro-active EU stance. For a part of the French and Italian electorate, it might be difficult to support Europe’s federalization without obtaining visible guarantees they would not be the losers of modernization; for a part of the German electorate, it might be difficult to agree transferring anew fiscal resources to fellow Europeans, if they see the core challenges and expenditure needs for their future at the global level due to global competition. Germany’s government agreement called for spending 3 per cent of GDP each year for domestic policies having a projection outside the European Union, not within it.
  • The needs of all players may be made compatible, as all of them have lost - without a broader regional and global system of stable governance of globalization - the size and the resources to achieve alone protection (France and Italy) and modernization (Germany). Ultimately, achieving the objectives in parallel can increase European cohesion without the risks of important trade-offs: all Europeans need protection and modernization. There is however an urgent need to align priorities among the leaders.
  • Time is of the essence. A turbulent international arena might expose all players to the sudden risk of abandoning the focus on the federalizing process, much before alignment is found among a majority of EU stakeholders. To be reminded: the external shock of the Iraq war in 2003 weakened the pro-EU camp, dividing Tony Blair from Jacques Chirac and Gerard Schröder, and turning their attention from selling harmoniously the EU to their citizens to justifying Europe’s split on the war. Only weeks before the attack against Iraq, discussions in the UK included how and when to bring the country into the euro area, a prospect which would be soon forgotten. People had to vote on the constitution after the EU had proven its incapacity to stay united on war and peace. Today, the degree of instability around Europe (think about tensions among Russia and Ukraine, immigration and potentially a risk of Trump returning to power in the US) exceeds any capacity of Europeans to mitigate threats, achieve more control of their foreign policies and contemporaneously stabilize their neighbours in the short term. It makes a difference to achieve EU sovereignty in a time of acute, abrupt and potentially disruptive crises, or as the result of an orderly, global and consensual reappraisal of policies.

At the time this article will be published, in a few weeks from now, the readers of the Federalist Debate will have already made their first judgement on whether European leaders are willing to run the first steps in the direction of a Franco-German-Italian federalist pillar within the EU, or whether they will run in separate directions. Germany has revealed its cards in favour of a bold federalization of Europe. The leaders of France and Italy have relaunched on the need to rebuild the EU fiscal governance. A bridge between the two approaches is urgently needed. Federalists should identify opportunities without ignoring the risks, encouraging all players to play a fair game, and helping creating coalitions to foster the federal perspective.

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