Independence Day II: The Fall of the Traffic Light Coalition

We have yet to see the ‘Final Scene’ of the Traffic Light Coalition, but the actors involved – Olaf Scholz, Robert Habeck and Christian Lindner – all have a rough idea of how it will unfold. Now we have to see how the film really ends.

In a political climate characterized by self-agitation, the script is almost writing itself. The implosive forces of the government have been set in motion. They are now just waiting to spontaneously ignite.

The temperature of the delegitimization dynamic at play here can be seen in the polls:

• The Chancellor's party, the Social Democrats (SPD), has lost around 38 percent or ten percentage points since taking office, falling from 25.7 percent in the 2021 federal election to 16 percent in current polls.

• The Free Democrats (FDP) have lost about six percentage points in current polls (five percent) compared to the election (11.4 percent), losing more than 50 percent of its former support.

• The Greens have suffered the least negative consequences. Their support has only dropped from 14.7 to 12 percent since the election.

Driven by conflicting interests and unrest within their own party, the liberals (FDP) now take the leading role in ‘The Fall of the Traffic Light Coalition.’ There is an almost enthusiastic expectation of collapse. Maybe a better working title for this movie would be Independence Day, Part II.

Only this time, the director is not Roland Emmerich but Christian Lindner.

Quick re-cap: Part I was about regaining a position of political power at the federal level, which happened in 2017 with the FDP’s return to the Bundestag.

Part II explores the demise of the current government coalition. The FDP is beginning to realize they made it possible for the Greens to enter the federal government. Without Lindner, there would be no Habeck: At the very least, he wouldn't have landed in the double seat of vice chancellor and economics minister without the help of the Liberals.

The FDP’s initial investment in Habeck did not pay off. "Robert," as he is affectionately called by his cabinet colleagues, always wants more of everything: More government. More debt. More attention. More Robert.

Lindner's team will be a united front in the next act, which is scheduled for the FDP party conference next weekend. Their declaration of independence was already adopted by the FDP Executive Committee yesterday, titled: "12 Points for Accelerating Economic Change."

It says, for example, that people in Germany should work longer and that many of those currently receiving financial support from the government should start working. The welfare state, the part of the state that has recently grown faster than the economy as a whole, should be frozen.

The financing of wind and solar energy from the public purse should also end. This will particularly hurt Habeck.

Unlike Vice Chancellor Habeck, the FDP wants less of everything: less government, less debt, less solar subsidies, and, above all, less Robert.

The Showdown:

The moment of truth will come with the budget preparation for 2025. For the federal budget of a country whose economy has de facto stopped growing, the only choice is between a new illusion of liquidity through credit or real austerity.

In reality, whether the debt brake is respected or undermined isn't even a decision. The constraints of the debt brake now serve the FDP as a means to break free from this resented coalition.

Soon, Lindner will stand before his liberal audience, free from the burden of government, with one desire on everyone's mind: new elections.

However, the CDU and the FDP will probably no longer be able to form a majority together. Thus, Friedrich Merz (CDU) and Christian Lindner (FDP) will be lacking a third man.

It won't be long before someone knocks on their door. Lindner will hardly be able to believe his misfortune when he calls out:

"Is that you, Robert?"

• An individual working for Maximilian Krah, the AfD’s top candidate for the European elections, was spying on behalf of China.

• The world is rearming, and defense contractors like Lockheed Martin are busy.

• The judges announced their eight finalists for the German Non-Fiction Prize 2024 yesterday.

An espionage case rarely stands alone: Just last Wednesday, two men were arrested in Bayreuth, Germany, for allegedly spying on behalf of Russia. And yesterday, another case of espionage was reported. An employee of the AfD's top candidate for the European elections, Maximilian Krah, is said to have gathered information on behalf of China.

What do we know so far? According to the Federal Prosecutor's Office in Karlsruhe, the German citizen Jian G. is accused of spying for a foreign intelligence service. Jian G. is alleged to have spied on the Chinese opposition movement and to have passed on information from the European Parliament to China.

Krah under investigation: Recently, an investigation by Der Spiegel revealed that Krah was detained by the FBI during a trip to the U.S. last December and questioned about alleged payments from the Kremlin - Krah has so far denied the accuracy of this accusation. The espionage allegations against his employee are likely to further ruin his reputation.

What happens now? According to party sources, Krah is already meeting with party leaders Alice Weidel and Tino Chrupalla in Berlin.

Does this mean the end for Krah? According to Marie-Agnes Strack-Zimmermann, the FDP's top candidate for Europe, both Krah and his colleague should resign from their positions:

According to Telegram chats sent to my colleague Jan Schroeder, some wish to "replace" Krah as the top candidate for the 37-year-old Thuringian AfD politician René Aust.

A risky candidate from the start: Before Maximilian Krah was elected as the top candidate, several AfD politicians, including Weidel, warned that Krah posed too significant a risk to the party because of his questionable contacts. "The rumors about China-Jian-Max are not new," party sources said, alluding to the first name of Krah's employee, Jian G.

The Pioneer Crew kicked off their Klartext Tour with the theme "Expedition to Reality" at the Astor Cinema in Hannover, with approximately 250 attendees. The program, featuring a colorful mix of satire, information, soccer acrobatics, music and live discussions, aims to convey our vision of critical yet optimistic journalism.

The guests on stage didn't hold back: CDU Vice Chair Silvia Breher and Belit Onay, Green Mayor of Hannover, debated the new stances regarding Islam in the CDU's basic program:

He stated:

Breher countered:

Model Vivien Wysocki, who founded the lingerie brand Saint Sass, was also in attendance. She shared her story with us:

"I always thought it was 'from rags to riches.' But in reality, in the startup scene, it's 'from riches to more riches.' That left me disillusioned."

You can listen to a recap of our Hannover show this morning on our Pioneer Podcast.

EV manufacturer: Tesla recorded its first drop in sales in almost four years last quarter. Revenue fell by nine percent year-on-year to $21.3 billion. The quarterly profit fell by 55 percent to $1.13 billion. After rapid growth in recent years, Tesla is facing weaker demand and growing competition, particularly from China.

However, Tesla confirmed that new models are to go into production. They are also set to arrive earlier than expected. Production originally planned for the second half of 2025 will start in the beginning of 2025 or even the end of 2024, said Tesla CEO Elon Musk. The gross margin fell to 17.4 percent. However, analysts had expected even worse. Investors on Wall Street celebrated this with an 11 percent rise in shares.

A look at Germany: CEO Elon Musk is currently cutting more than one in ten jobs worldwide. Tesla is planning to cut 400 jobs at its site in Grünheide near Berlin. The contracts with 300 temporary workers will not be extended.

General Motors reports a solid first quarter. Net income jumped 24.4 percent from a year ago to nearly three billion dollars in the first three months. Revenues also climbed 7.6 percent to $43 billion. The robust U.S. domestic market and demand for pickup trucks drove the business.

GM Chief Financial Officer Paul Jacobson said consumers remain "remarkably resilient despite higher interest rates." While the company expects vehicle prices to decline 2 - 2.5 percent this year, GM hasn't felt the impact yet.

After the better-than-expected quarter, GM is more optimistic about 2024. Net income is now expected to reach $10.1 billion to $11.5 billion, up from $9.8 billion to $11.2 billion. Shareholders were pleased, sending the stock price up about five percent.

Arms beneficiaries: The world is rearming, and defense contractors like Lockheed Martin are busy. In the first quarter, the company reported revenues of $17.2 billion, up 14 percent from a year earlier. However, due to higher costs, net income fell from $1.7 billion to $1.5 billion.

Busy workload: The defense contractor's backlog totaled $159 billion on March 31st. Just last week, it added a $17 billion Pentagon contract. Lockheed Martin is to develop new interceptor jets to protect the U.S. from intercontinental ballistic missiles.

A breather: Despite the positive numbers, management saw no reason to raise its outlook. Shareholders apparently had other expectations. Consequently, the stock lost one percent.

Yesterday, the judges announced their eight finalists for the German Non-Fiction Prize 2024. The award ceremony will take place in Hamburg on June 11th, 2024. The titles, all published since April 2023, cover various topics, from the political instrumentalization of historical events to global environmental issues and the future of democracy.

The works reflect the relevance and diversity of the non-fiction genre and promise to stimulate readers' thinking. The selection offers profound insights into critical questions of human history and current societal challenges. Among the contenders are books such as Frauke Rostalski's "The Vulnerable Society: The New Vulnerability as a Challenge to Freedom" and Jens Beckert's "Sold Future: Why the Fight Against Climate Change is at Risk of Failing.”

Each book promises to inspire readers and broaden their horizons. Jury spokesman Stefan Koldehoff said:

The winner will receive a prize of 25,000 euros.

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