A weekly newsletter on German politics, with news and analysis on the new government.

By MATTHEW KARNITSCHNIG

with HANS VON DER BURCHARD

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PRESS VERBOTEN!

It’s no secret that Germans are obsessed with privacy (Datenschutz!). Yet even accounting for this strange fetish, this week’s attempt by Germany’s foreign office to keep a meeting with exiled Iranian women’s rights activist Masih Alinejad a secret is extraordinary. 

Women, Life, Freedom? Alinejad, arguably Iran’s most prominent dissident, was in Berlin this week to draw attention to the Islamic Republic’s horrific record of human rights abuse, in particular towards women. She met with a number of German politicians and officials, including Norbert Röttgen, a leading Christian Democrat who has been one of Germany’s most outspoken voices on Iranian abuses. 

The Office: Alinejad was hoping to sit down with German Foreign Minister Annalena Baerbock, who promised a “feminist foreign policy” when she came into office. Alas das Amt (“The Office”), as the foreign ministry is called in Berlin, told her she’d have to make do with Luise Amtsberg, the ministry’s human rights commissioner. 

Diplomatic incident: The Germans insisted the meeting, which was to include both Alinejad and a young Iranian woman who was shot during a protest in the country last year, remain confidential. Alinejad refused to play along, walking out of the meeting before it really started and then taking to X to call out what she viewed as German hypocrisy. Das Amt responded in kind. 

On background: The foreign office, according to insiders we spoke to, was concerned that a high-profile meeting with Alinejad could damage its relationship with Tehran at a time when it is trying to improve conditions for (and in some cases repatriate) dual Iranian-German nationals either in custody or barred from leaving the Islamic Republic. 

Reality check: The German government has always bent over backwards not to offend Iran because it wants to keep a foot in the door for German business, if and when the country’s international isolation ends. That was also the strategy behind Germany’s enduring support for the now-defunct Iran nuclear deal, which relaxed sanctions on the regime in exchange for its agreement to freeze its nuclear weapons program. 

Persian catch: Iran has vast energy resources, a young population and a large middle class, making it a perfect place for Germany’s industrial companies to do business. Indeed, these factors have defined German policy towards Iran (and China and Russia) for decades, as you can read in this dispatch from the archive. 

Access or evil? Trouble is, Iran’s crackdown on its own citizens, which has included beating women to death for not wearing a headscarf and executing gay people by hanging them from cranes, complicates Berlin’s calculus in dealing with Tehran, especially given that Germany purports to be a staunch defender of human rights around the world.    

Do the wrong thing: The problem Germany has with figures like Masih Alinejad is that they are too uncompromising in their critique of Iran’s brutality. Indeed Alinejad’s personal history — the Iranian regime has tried on multiple occasions to both kidnap and assassinate her in order to shut her up, according to U.S. authorities — is a testament to the Islamic Republic’s criminal character. Berlin understands that publicly embracing one of Iran’s greatest critics would have consequences, which is why it ultimately decided to leave Alinejad in the cold. 

Masih’s response: “Some German officials say I’m too radical and meeting me publicly would be fatal to their Iran policy,” she wrote on X. “If standing up for women’s rights and wanting an end for gender apartheid regime in Iran is being radical, then I’m proud to be labeled as such.” Ouch. 

Consolation prizes: Not everyone in the German government snubbed the Iranian dissident. German agricultural minister Cem Özdemir of the Greens met with her as did a number of German MPs. She also participated in a discussion hosted by the Axel Springer Freedom Foundation moderated by yours truly.

BUDGET SAGA

Spoiler alert: More than two weeks have passed since the German constitutional court’s bombshell ruling that deprived the coalition of 60 billion euros it planned to use to fund its ambitious legislative agenda….and they still have no idea what to do as we explore in our deep dive this week.

Political theater: That said, ‘The Most German Crisis Ever’ (Germany’s ZDF television led their news broadcast with our headline this week) continues to deliver in terms of entertainment value.

Recap: Chancellor Olaf Scholz’s government was forced to put the 2024 budget on hold in the wake of the ruling because it’s short about 17 billion euros for climate-related projects and other priorities it promised to fund next year. 

Quick fix: The most realistic option for finding that money would be to scratch together the missing 17 billion by trimming the budget elsewhere for 2024 and then worry about the remaining 43 billion euro shortfall later. 

The catch: The federal budget is expected to total about 450 billion euros next year, but only about 10 percent of that is not already committed for mandatory payments such as social welfare and debt servicing, according to Wolfgang Schmidt, the chancellor’s chief of staff.  Each of the three parties in the coalition is relying on that 10 percent envelope to fund their pet projects and are loath to accept any cuts. 

Gallows humor: Schmidt showed he wasn’t letting the budget crisis get him down, making light of the government’s predicament earlier this week at a Chatham House event in Berlin. “I do apologize for coming in a bit of a rush,” he told the audience, explaining that “we’re looking for some money at the moment.”  

HIT THE BRAKE?

Cooking the books: The other option would be to try to deactivate Germany’s constitutional debt brake for 2024. The government was forced to do just that this week for 2023 as a result of the ruling, citing the sky-high energy costs at the beginning of the year. That will help the government account for about 40 billion it withdrew from a special fund — a move now deemed illegal by the court. But it doesn’t resolve the question of how to handle 2024. 

Make or brake? The court made it clear the government needs a good reason to declare an emergency that would justify suspending the brake and Russia’s war on Ukraine would seem to meet that test. That’s why one option might be to lift the brake on the grounds that Germany needs to fulfill its commitment to supply Ukraine with about 8 billion euros in military aid. Scholz and Finance Minister Christian Lindner have both insisted that this assistance for Ukraine is not on the chopping block. 

First things first: Such a step would give the government some breathing room when it comes to Ukraine funding, but the coalition would still need to implement cuts to realize their other spending priorities. What’s more, Lindner would have to first agree to lift the brake, something he has so far resisted. 

Keeping options open: This week, Lindner avoided ruling out the possibility of another debt brake suspension for next year. Instead, he said he wasn’t yet “convinced” that there are sufficient arguments for declaring another emergency. “Even more debt with a sharp rise in interest rates is certainly not the right way to go,” he said on Friday. 

What will go? Even so, Lindner indicated that none of the subsidies for chipmakers and the green industrial transition should be cut: “We want to implement all the goals that the government has set itself,” he said. “That is what we can say at this point in time.”

Let them eat cake: Lindner also suggested that Germany could cut development aid: “We need to examine our international commitments … Can we perhaps achieve our goals with less money?”

Confused? If not, here’s what Lindner told parliament on Friday: “In order to realize future investments and important projects of the coalition, we will deprioritize other outdated expenditures that are no longer necessary today.” Okay then. 

SORRY, NOT SORRY

Told you so: What we haven’t heard yet from any of the leaders of the parties in Germany’s ruling coalition is an apology — even though legal experts and also the federal audit court warned early on of the legal risks of the government’s accounting methods.

What’s next? Scholz delivered a highly anticipated address to the Bundestag on Tuesday, with many expecting him to offer a roadmap for resolving the crisis and perhaps even to apologize for steering the country into the budget mess. He did neither.

The chancellor’s new shoes: The response from opposition leader Friedrich Merz of the center-right Christian Democrats was swift and searing: “After today’s government declaration, one has to come to the conclusion: You can’t do it,” Merz said.

You’re no Willy Brandt: Scholz’s performance in office, Merz went on, was not comparable to former SPD chancellors like Willy Brandt and Helmut Schmidt, and not even to the much-maligned Gerhard Schröder, who later turned into a Putin defender. Then Merz came up with this gem of a quip, which you may have to read twice to understand: “The shoes you are wearing as Chancellor of Germany are at least two shoe sizes too big for you.”

Frenemies no more: Only about a month ago, Scholz invited Merz to the chancellery to discuss how they could work together to curb migration. There was talk at the time that the leaders might even seek to form a grand coalition in case the current coalition falls apart. Doesn’t seem so likely now!

WIND OF CHANGE

MAN OF THE 90’s? Merz also had a retort for Economy Minister Robert Habeck, who lambasted the CDU as a backward-looking party from the 1990s because it insists on fiscal restraint and is skeptical of subsidies for green technologies. 

Yet Merz liked it: “Many thanks. I really see it as a great compliment what you said there,” Merz told Habeck in the Bundestag, adding that, in the 1990s, Germany had a chancellor and ministers “who really knew” what they were doing.

Nostalgia: A lot of people made fun of Merz for glorifying the 90’s, but the comments raise a more serious question: Were the 90s really cool?

Hans, a child of the 90s, says Nein: “Merz already suffers from the stereotype of being an old, grumpy man, whereas his potential internal competitors — Hendrik Wüst, Daniel Günther and even Markus Söder — come across as younger and fresher. The 90s may have been a relatively stable period, but they were also the years of the CDU slush fund scandal, and fax machines, and slow Internet — challenges we’re still overcoming today! Does a modern party really want to identify with that?”

Matt, born 1946, has three words for Hans and the other 90s haters: “Wind of Change. By evoking the 1990s, Merz is tapping into German nostalgia for a happier time when the future was bright and the world a much happier place (or so we thought). Even hipsters living in Neukölln long for that time. Therefore: point for Fritz!”

What it all means: Whether you love the Scorpions or loathe them, the 90s aren’t coming back. As long as the debt brake is in force, Germany will not have the fiscal capacity to fund the massive climate-related infrastructure programs it has set in motion. Sooner or later the government will have no choice but to reform the brake.

What the Journal says: “Chancellor Olaf Scholz’s administration is falling apart because it turns out someone will have to pay for decarbonizing the eurozone’s largest economy,” columnist Joseph C. Sternberg writes in this provocative take.

WEEK AHEAD

SCHOLZ AT COP:  Chancellor Scholz is at the international climate conference in Dubai and will speak on Saturday at 10.30 a.m. local time.

BRAZILIANS IN BERLIN: On Monday, Brazilian President Luiz Inácio Lula da Silva and members of his cabinet will be in Berlin. It’s all about the economy. With Bolsonaro now gone, the Germans see Brazil as a key market for exports.

BELGIAN ROYALTY: Royal fans watch out. Belgian King Philippe and Queen Mathilde are coming to Berlin on Tuesday for a three-day visit.

SPD BLUES: The Social Democrats will meet from Friday to Sunday for their annual national party conference in Berlin. In the face of plummeting poll ratings and the recent budget chaos, you can expect some fireworks.

HATE MAIL! As ever, send your comments and complaints to [email protected] or @mkarnitschnig on the X. Schönes Wochende and servus!

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