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Germany’s choice of new chancellor confirmed
24 Nov, 2021 14:04
Germany’s so-called traffic light coalition has unveiled its plan to form a government eight weeks after the federal election, with former finance minister Olaf Scholz set to be chancellor.
In a leaked 177-page draft document, titled “Dare to advance more – Alliance for Freedom, Justice and Sustainability” and seen by Reuters, the SPD (Social Democratic Party), the Greens, and the FDP (Free Democratic Party) revealed their coalition agreement for the next government of Germany.
The leak on Wednesday came after a final day of discussions between the three parties. The deal will see Germany’s first three-way federal coalition government since the 1950s. The leak also preceded a 3pm (2pm GMT) press conference in which the coalition was formally presented.
The coalition deal includes the promise to increase the minimum wage of 12 euro per hour and will see the voting age lowered to 16. An earlier commitment to build more apartments also features in the coalition pact, with the state funding a quarter of the targeted 400,000 flats a year.
Additional policy decisions include allowing immigrants to apply for citizenship after five years of residency and the creation of a crisis team to fight the Covid-19 pandemic.
The new coalition also says it is ready for a constructive dialogue with Russia, according to the draft coalition agreement.
Coalition negotiations began on October 21, after the three traffic light parties – a reference to the group’s colors – laid the foundations for exploratory talks to proceed. The SDP, led by former finance minister Olaf Scholz, was narrowly declared the largest party in the Bundestag after the September 26 election.
In an exploratory paper, the SPD, Greens, and FDP had already made some “preliminary determinations” and cleared away some issues.
If the coalition agreement is approved by party members in the coming weeks, the traffic light coalition would replace the current coalition of the Christian Social Union and outgoing Chancellor Angela Merkel’s Christian Democratic Union.
The deal will also see Scholz replace Merkel as the country’s chancellor after 16 years in power. The long-time leader decided not to stand for a fifth term in office.
Speaking to the press, Scholz hailed the “groundbreaking” coalition. “The first traffic light [in Germany] was erected in Berlin in 1924 in Potsdamer Platz. At that time, it was still an unusual technology. ‘Can it work?’ people asked sceptically,” Scholz stated.
“Today, the traffic light is indispensable… My ambition as chancellor is that this traffic light alliance will play a similarly groundbreaking role for Germany.”
Greens co-leader Annalena Baerbock admitted that the parties would always have their differences, but would work together, vowing to take the country forward through public and private investments as well as a focus on the green agenda.
The three-party bloc has vowed to modernize Europe’s largest economy by investing heavily to upgrade national infrastructure and develop green industries. Sources told Reuters that the parties had agreed to phase out coal by 2030 and to end power generation from gas by 2040.
It is understood that the Greens may get control over the foreign ministry, while Robert Habeck, the co-leader of the party, is expected to become a “superminister” overseeing the economy as well as climate and energy policy.
Yikes! That sounds frightening!
The announcement comes as the caretaker government, led by Merkel, struggles to manage a surge in Covid-19 cases.
Sweden’s first female PM resigns hours after being elected
24 Nov, 2021 18:31
as Sweden's first female prime minister on Wednesday in Stockholm. © Reuters / TT News Agency
Newly elected Swedish Prime Minister Magdalena Andersson has announced her resignation just hours after making history as the country’s first woman premier.
“I have told the speaker that I wish to resign as prime minister,” Andersson told reporters on Wednesday in Stockholm, after the coalition led by her Social Democratic Party unraveled. The 54-year-old Andersson is reportedly seeking new support after the Green Party quit the new ruling minority coalition in the wake of a budget defeat.
The coalition was to govern on a razor-thin margin of support after the new PM was elected on Wednesday with more votes against her than for her in parliament. The vote was 117 MPs for Andersson, Sweden’s finance minister, and 174 against her, with 57 lawmakers abstaining or absent. Swedish law allows prime ministers to be appointed and govern as long as a majority of the Riksdag – 175 MPs – doesn’t vote against them.
However, Andersson’s historic victory, making Sweden the last Nordic country to have a female head of state, was quickly followed by a legislative defeat, as the Centre Party declined to go along with other coalition members in supporting the government’s budget proposal. MPs instead passed a rival budget proposed by three conservative parties, including the Sweden Democrats.
Although Andersson had said she could govern the country with the opposition budget, the Greens balked, with co-leader Marta Stenevi telling reporters the party sought power in order to push through its own policies. “It is not the Green Party’s job in politics to implement a budget negotiated with the Sweden Democrats.”
Andersson subsequently said she didn’t want to lead a government “where there may be grounds to question its legitimacy.” She reportedly told Riksdag Speaker Andreas Norlen that she’s interested in leading a one-party Social Democratic government. Sweden has a general election scheduled for next September.
The Social Democrats had chosen Andersson to replace Stefan Lofven, who stepped down as prime minister and party leader earlier this month. Lofven announced his intention to resign in August amid political infighting, including a no confidence vote against him, and hoped to give his successor “the best of conditions” heading into next year’s election.
Czech president sent back to hospital
25 Nov, 2021 21:50
Czech President Milos Zeman has been sent to hospital after testing positive for Covid-19. The test came hours after he was discharged from a healthcare facility, where he spent some six weeks due to an undisclosed diagnosis.
The hospitalization of the 77-year-old official was announced by the Czech presidency late on Thursday. Zeman was taken to the Central Military Hospital (UVN) after testing positive for the coronavirus at the presidential retreat at Lany, outside of the country’s capital city of Prague.
“The president’s program will be suspended pending the treatment of Covid-19,” Zeman's office said in a statement.
Zeman was discharged from the UVN earlier in the day, having spent around six weeks there. The president was originally hospitalized on October 10 and placed in an intensive care unit, where he remained during most of his stint at the facility.
While no diagnosis has been officially confirmed, local media reported that Zeman’s prolonged stay at the UVN was due to a liver condition. The presidency offered little clarification on the issue, saying only that he was treated for a chronic illness.
Regarding his positive test for Covid-19, the president has reportedly shown no symptoms of the disease. According to local media, he had previously been vaccinated against the virus at least three times.
EU country’s electricity prices 5 times higher this year
30 Nov, 2021 12:11
The cost of electricity in Finland exceeded €400 per megawatt-hour during peak consumption hours this week, according to data from the Nord Pool electricity exchange.
The highest price was recorded on November 29, at €422 per MWh (including taxes). That’s about five times higher than a year ago.
Finland is energy-dependent, with about 10% of its electricity supplied by Russia. Experts attribute the increased price to high energy costs in Central Europe, where a large amount of electricity is generated from natural gas, the price of which has increased significantly. They say electricity in Finland is likely to remain expensive until next summer, when the Olkiluoto 3 nuclear power plant is expected to become operational.
Natural gas costs have been rising for European consumers with the winter season approaching. On Tuesday, the price of January futures on the TTF exchange in the Netherlands exceeded $1,170 per thousand cubic meters, or €100 per MWh in household terms.
“According to our forecast, the price of electricity will remain high in winter but will start to decline in spring. It is likely that it will not be as high as it is today, but the overall level remains elevated,” a spokesman for Finnish electricity company Fingrid, Mikko Heikkila, told journalists.
He added that “Finland is very dependent on imports. In winter we need energy from neighboring countries but if the electricity market and domestic electricity production work normally, then next winter there will be enough electricity.”
According to Fingrid, the share of electricity imports from Russia amounted to 10% of consumption in Finland in the first nine months of 2021.
The average price of Russian electricity was €57.98 per MWh. Russian energy company Inter RAO said last week that most of its electricity export volume goes to Finland (37%), the Baltic countries (23%), and China (18%).
And yet, Nordstream II pipeline runs just south of Helsinki. Why is that option not being explored? Seems to me that the EU is counting on a mild winter.
Another brilliant column by Glenn Diesen
Europe’s imminent winter energy crisis could have
serious political consequences
1 Dec, 2021 15:42
as snow falls in London, Britain. © REUTERS / Toby Melville
By Glenn Diesen, Professor at the University of South-Eastern Norway and an editor at the Russia in Global Affairs journal. Follow him on Twitter @glenn_diesen.
With temperatures falling and gas prices rising, much of Europe is drifting into a perfect storm. Supply shortages, inflation, green policies and ideological opposition to Russia are creating an energy crisis.
As a result, power outages, stunted economic recovery and political fallout could have ramifications across the continent. In the longer term, the failure of EU policymakers will undermine energy security, make its industries less competitive, and have a negative impact on Europe’s cohesion and role in the world.
Coming frost
Efforts by the US and EU to borrow and spend their way to recovery are failing. Growing debt and money printing are fueling inflation with a predictable impact on energy prices. America’s recent and drastic inflation of the money supply was unnecessarily reckless, given the country was already recovering from Covid-19 lockdowns.
The troubled green transition has also been a contributing factor, as the closure of nuclear power plants, an aversion to coal and the shortcomings of wind power have resulted in growing reliance on gas as a cheap and relatively clean source of energy.
Then there is the EU’s decision to abandon long-term gas contracts that ensure reliable supply at predictable prices. The EU has instead favoured buying gas at spot price, in which supplies are purchased directly from what is already on the market, rather than agreeing to deliveries at a fixed price. The obvious risk, which is becoming apparent across Europe, is that gas spot prices can fluctuate fiercely and there may not be enough available product on the market, as the extraction, processing and transit of the fuel must be planned in advance.
Russia, which has been blamed in some quarters for the crisis, insists it is fulfilling its obligations under the existing long-term gas contracts, although it acknowledges there is not enough available gas to respond to sudden rises in demand. As a result, Moscow is replenishing its own supplies, along with supplying gas to consumers in Asia in accordance with its long-term contractual obligations, and the broader European market is too large to sufficiently boost output on such short notice.
Europe’s headache
Relations with Russia were destined to be problematic when the West decided after the Cold War to construct a new Europe with Moscow shut out. Russia was expected to abide by the decisions of the main institutions, of which it was denied membership. To square the circle, this demanded extreme asymmetrical interdependence by increasing Russia’s reliance on the West, while reducing the West’s reliance on Russia. Asymmetrical economic interdependence could be converted to political power, as the worst deal presented to Russia would still be the only deal on the table.
Russia was excessively reliant on the West for almost everything, while Europe has to a large extent only been dependent on Russian energy. In the 1990s, Western interests were in the process of establishing control over the Russian energy market until Vladimir Putin took office and brought the vast amount back under state control. The West responded by obsessing about reducing reliance on Russian gas and seeking control over transit states, such as Ukraine where previously 80% of exports passed through.
Moscow aimed to use its important role as an energy provider to get a seat at the table in the institutions of Europe, while the West cautioned against the evils of the Russian “energy weapon.” Much of the West fought against additional pipelines to increase reliable gas supplies as part of this.
Without any intended irony, the US claimed to be defending Europe’s energy security when it placed sanctions on European companies that participated in the construction of the Nord Stream 2 pipeline, over objections from Germany. The hostility to Russian gas appears to have worked, as Moscow is unlikely to construct any more pipelines to Europe, and instead will give priority to the Asian market.
In 2021, Europe is a different place. Russia is no longer attempting to use its position as an energy supplier to negotiate a different political set up on the continent. Instead, Moscow has abandoned its former utopian dreams of being part of a Greater Europe and has instead set its sights on the East to develop a Greater Eurasia in partnership with China. European companies, technologies and consumers are therefore becoming less and less significant for Russia’s energy industry. Former Russian proposals for a common European security architecture and energy market have now been replaced with red lines against further NATO expansionism.
Is a thaw possible?
To resolve the energy crisis, Western Europe needs to have an honest and rational reflection regarding what has led to this perfect storm with its potential long-term implications. Instead, elites are retreating into anti-Russian sloganeering about facing a “hybrid war” and “energy weapon,” which is a comfortable distraction but fails to address the underlying problems of a continent in decline. Increased antagonism merely reaffirms Moscow’s belief that the EU is an unreliable partner, and that Russia’s efforts to develop new economic partnerships must remain a top priority.
Destined to live in a divided Europe, Brussels and Russia should make the best of it by de-politicising energy and forming a pragmatic energy partnership. Russia will behave predictably, in its own national interest, which is to act as a reliable supplier of gas in the pursuit of profitable and predictable markets. Only the EU can stop digging itself into a hole.
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