Socialist Chancellor Olaf Scholz takes the reins in Berlin, meaning the bloc’s approach to some of its core issues could be about to change.
On Wednesday, after 16 long years, Angela Merkel will step down as German Chancellor, making way for only the fourth socialist leader in the country’s post-war history to take over the Chancellery.
Olaf Scholz’s new government will be made up by both the Greens and the Free Democratic Party (FDP), as well as his own Social Democratic Party (SPD), the first time such a traffic light coalition – named after the colours of each party – has governed Germany.
With the enduring Merkel-era over, however, the Socialist Chancellor and his coalition partners have some big boots to fill, leaving question marks over how much Germany’s approach to key European issues will change.
In the government’s coalition agreement signed on Tuesday, the parties talk of a "special responsibility” to serve Europe, but how the continent is served in such a “special” way is yet to be determined.
Here are four of the biggest European issues that could be affected by the new German government.
China and human rights
There’s no denying that the rise of China is beginning to shape Brussels’ foreign policy agenda more and more each year, as attention slowly pivots eastward.
Merkel’s European approach to China was generally one of German self-interest, but this could change soon.
The EU’s High Representative, Josep Borrell, recently described Beijing as "both an economic competitor and systemic rival, and a necessary partner for tackling the challenges of the 21st century" – a relationship that sounds complicated at best.
In this respect, Berlin and Brussels’ views align, with the coalition agreement saying that Germany’s relations with China should be grounded in "partnership, competition and systemic rivalry".
But it isn’t quite as simple as that, according to the German Marshall Fund’s (GMF) Helmut Schmidt Fellow, Markus Ziener.
"China is probably one of the main conflicting lines within the new government because, of course, Germany is a country that is exporting and importing [to China] a lot, and its relationship with China is essential for the economy – decoupling from China would be economically very bad for Germany,” Ziener told Euronews.
"So, just think about Volkswagen - Germany's biggest car manufacturer - selling basically every other car to China or being produced in China. So, it's about jobs, jobs which might be in danger in Germany if we are going to scale back our trade."
Ziener says this complication is just the economic side, adding that the political side could be even more fraught.
"If we talk about politics, I think we are going to see a change here because the new [Green] foreign minister, Annalena Baerbock, she wants to pursue a values-based foreign policy, which means she's putting much more emphasis on human rights and strengthening the forces of democracy," the GMF fellow said.
"So, if we look at China, as well as looking at Russia, we are going to see at least a little bit of a change. How much of a change [for Europe] depends on whether the chancellor, Olaf Scholz, is keeping those two portfolios close to his chest, so to say, or whether he gives leeway to the new foreign minister.”
The EU’s investment deal with Beijing, which Merkel championed, is currently on hold over Chinese sanctions against MEPs and other critics of the country’s human rights record, including in the Xinjiang province.
The coalition partners agree that, as things stand, the agreement cannot be ratified, leaving a cloud of uncertainty over EU-China relations.
Russia, Ukraine and Nord Stream 2
Multiple unresolved issues remain with President Vladimir Putin and his regime, but the most clear and present danger is at the Ukrainian border.
Moscow’s build up of troops at the frontier with Russia is bringing Kyiv and Moscow to the brink of war, with sanctions being threatened if Putin goes ahead with any invasion.
The German Socialist Party has generally taken a more lenient line when it comes to Russia, but Ziener says any incursions by Moscow into Ukrainian territory would be impossible to ignore.
“The Green Party is very supportive of Ukraine. So, if we really see military action happening in the next coming weeks or months, I am sure that there will be a tougher line towards Russia,” he said. “No matter if the Social Democrats are softer on Russia, I think that in this case there's no other way other than having a tougher line when it comes to sanctions.”
The Nord Stream 2 pipeline, aimed at transporting natural gas from Russia into Germany, is another prickly issue for both Berlin and Brussels that the Scholz government will have to deal with.
Europe wants to wean itself off of fossil fuels, particularly from outside of the continent and even more so from countries like Russia, which some argue could be used as leverage by Putin against the EU.
The gas project is currently pending certification by German regulators, but any decision by the new government could be difficult.
“Nord Stream 2 is definitely essential for Germany because Germany's phasing out of coal and at the same time also nuclear, which means basically that we have to bridge that energy gap that is existing. We have to import gas from other places. So Nord Stream 2 is essential here,” Ziener said.
“On the other hand, it's definitely a political issue, and the Greens and a major part of the Liberals are not happy with this. Social Democrats are traditionally more leaning towards a softer line when it comes to Russia. So this is probably something that's they have to have to find a compromise on, which might not be easy.”
Rule of law
The EU’s rule of law offenders in chief, Hungary and Poland, could be in for an even rockier few years if the new German government’s words are anything to go by.
After years of neglect by Merkel, allowing both Budapest and Warsaw to embark on a campaign of democratic backsliding, Berlin is finally willing to get tough.
"We urge the European Commission...to use the existing rule-of-law instruments more consistently and in a timely manner," the coalition agreement states.
Critics argue that Hungary and Poland have been allowed to erode democratic standards, circumventing so-called European values, in order to prioritise compromise and togetherness within the EU.
But this could soon change according to Amandine Crespy, an associate professor in political science at Université libre de Bruxelles.
“The new government seems to be intent on a tougher position vis-a-vis Poland and Hungary,” Crespy told Euronews.
“Perhaps we will have to see whether all European leaders would be able to form a kind of united front and really see what happens,” she added. “But there's a lot to expect that in fact, the new German government would be less prone to political agreements, just like Angela Merkel had proved in the past years.”
An even greener Europe?
With the EU’s Fit for 55 climate and energy package already having some of the most ambitious environmental policies around, could Brussels go even bigger on climate with the German Greens in power?
It’s a question many environmentally conscious Europeans will be asking, as Scholz’s government takes the reins.
The coalition partners have said they will endeavour to stop burning coal by 2030, but with the Greens being opposed to both nuclear and gas as an energy source to bridge the gap in the transition to renewables, a major battle between the two largest member states could be on the cards.
“I see a potential huge confrontation coming with France on the issue of nuclear energy and whether nuclear energy should be included in the European taxonomy – the European categorisation of sources of energy as indeed a green energy,” Crespy said.
“France and Germany have made two completely opposite changes. Germany has confirmed the decision to drop nuclear energy, whereas the French President Macron has, on the contrary, launched a very broad plan to accelerate the building of nuclear energy in France,” she added.