Berlin's government retreats in an effort to mend fences

Germany's three-party administration has gathered for a two-day secret meeting outside of Berlin to forge a unified front in the fight against the ongoing cost of living and energy problems, as well as Russia's war on Ukraine.

Olaf Scholz's "traffic light" cabinet will meet in secret at the serene Meseberg castle outside of Berlin on Tuesday, August 30, and Wednesday, August 31, for the third time since assuming office last December to talk about "a variety of domestic and foreign policy matters."

Discord over support for Ukraine, though, means that the conference is probably not going to be calm.

Germany's "energy supply gave the Ukraine war" is one of the primary topics on the agenda, according to the spokeswoman.

Leading Social Democrats (SPD) and Liberals (FDP) voices have already increased the pressure on Robert Habeck, the minister of green energy and the economy, over energy pricing.

Energy ‘madness’

While SPD party chief Lars Klingbeil told the newspaper over the weekend that Habeck's plans offered little more than "pretty words," FDP party whip Christian Dürr said on Tuesday that "technical errors" in the design of the recently implemented gas levy "should be eliminated" by the time of the retreat.

Since the introduction of the levy, which was designed to assist utilities in covering the cost of switching out Russian supplies, the Green minister has come under fire. However, detractors cautioned that even businesses with healthy finances but no immediate need could benefit from the additional revenue.

The potential expansion of nuclear power facilities, one of the coalition's main present points of contention, has not yet been verified.

Scholz hasn't ruled it out, but the Liberals are trying to keep nuclear power reactors operating longer than expected to replace Russian fossil fuels.

The proposal has recently been referred to as "madness" by foreign minister Annalena Baerbock, but the Greens have maintained their steadfast opposition.

Money squabbles

The state budget and the rising cost of living are some issues where the ruling coalition disagrees.

The Liberals urge spending restraint to prevent both increased debt and additional taxes at a time when families' and businesses' budgets are already tight, in contrast to Scholz's Social Democrats' argument that the state should continue to step in and provide financial support to those struggling to cope with skyrocketing inflation rates.

Finance Minister and FDP party leader Christian Lindner emphasized last week that he intends to reinstate the national debt limit, which has been suspended for the past two years due to the COVID crisis, even though billions of euros have already been spent on relief measures like the €9 monthly flat rate for public transportation and a fuel rebate.

To alleviate customers while encouraging them to move away from vehicles, Greens and Social Democrats have both called for plans to expand the public transportation subsidies in some fashion. The FDP is the only coalition member to be opposing these suggestions.

A list of policies that the SPD's parliamentary faction would want to have approved during the government retreat was recently presented. This includes direct payments to those who are most in need, like welfare claimants, seniors, or students, as well as a flat-rate transport fee of €49.

Nobody ought to be left unattended. Strong shoulders will have to carry their share of the load, the study states. The Social Democrats believe that the businesses generating additional revenues in response to Russia's conflict in Ukraine should be considered to be these "strong shoulders."

The proposal in the article would impose a windfall tax to pay for social support programs, which the Liberals have categorically rejected.

Cracks over Ukraine support

Cracks have been appearing not only between parties but also within them as Scholz and Lindner have had to deal with detractors of Germany's backing for Ukraine inside their ranks, adding to the issues facing the cabinet before its retreat.

The pacifist branch of the SPD asked for a focus on a diplomatic agreement with Russia and more "caution" over armament supply to Ukraine in an open letter that was made public on Friday.

As a result of his call for the gas pipeline Nord Stream 2 to be put into operation despite Russia's ongoing aggression against Ukraine and the fact that Moscow is already pumping less and less gas via the Nord Stream 1 pipeline, FDP vice-leader Wolfgang Kubicki came under fire.

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