Traffic Light Turmoil: Conflicting Coalition Interests

The current German government coalition, often referred to as the "traffic light coalition," is far from in agreement on how Germany should be governed. The Greens, Free Democrats (FDP) and Social Democrats (SPD) all have their own ideas on how the country should be run. Each party has its own interests — and very conflicting ones at that.

Disputes can be resolved, and interests can be reconciled, but once you reach the fundamental core of each interest — it can be dangerous. There's a solid, unyielding essence that resists compromise, defines boundaries and solidifies further under pressure.

The traffic light analogy doesn't really fit our three-party government. In a traditional traffic light setup, red (SPD) and green (the Greens) coexist seamlessly, with yellow (FDP) facilitating transitions. However, in our political landscape, roles aren't mechanically assigned, and negotiation is essential.

The German three-party coalition resembles more the galactic dynamics seen in astronomy than a traffic light. In three-star systems, planets are gravitationally bound and undergo complex orbital motions, leading to fluctuating distances between them, known as planetary migration.

This migration is mirrored in Berlin's government district. With the chancellor's waning reputation and declining poll numbers, the gravitational pull of the fixed red star (representing the SPD) has weakened notably. As a result, the green and yellow planets drift farther away from the three-star system.

The gravitational forces of the green and yellow planets were weak to begin with. According to the latest demographic survey, the yellow star (representing the FPD) has lost about half of its planetary mass. This energy loss within the system has led to the green and yellow planets increasingly retreating into their own orbits.

The Social Democrats are losing their standing. They are currently third in the party system and are at risk of dropping below 5 percent in Saxony. Contrary to predictions, this decline isn't prompting a reassessment but solidifying the SPD's ‘traditional core.’

The welfare state remains central to the SPD, Germany's oldest party. They built, nurtured and continue to seek its expansion, with no mandate for dismantling or diminishing it.

Critics argue that the last attempt to change this course, spearheaded by Gerhard Schröder, inevitably led to his electoral defeat. Despite the passage of time, the SPD still grapples with the repercussions of that restructuring.

Olaf Scholz aims to avoid repeating past mistakes. As SPD general secretary, he partnered with Schröder in implementing Agenda 2010, leading to lingering distrust among many colleagues. While Scholz assumed the role of chancellor, he wasn't appointed the leader of the SPD. The party currently operates to the left of the chancellery.

The green planet derives its energy from the visionary concept of achieving a CO2 emissions-free galaxy, prioritizing climate neutrality above all. The party advocates for giving nature a voice and defending its interests, even if it means challenging industrial needs.

For one green planet official, choosing between less CO2 and greater prosperity is clear-cut. The decision by the Minister of Economics, Robert Habeck, to cease funding electric mobility (as part of budget reductions) marked not the beginning but the end of the Green Compromise.

As for the FDP, their options are limited by their diminishing support. Christian Lindner, resembling Saint-Exupéry’s Little Prince on a lonely planet, sticks to traditional liberal principles: no tax hikes, no new regulations and no more debt. Everything else is essentially disregarded.

To date, the expansion of the welfare state—citizen income, basic child security, increase in welfare program (Hartz IV) benefits and energy price subsidies—hasn't been good for the yellow planet. The capitulation to the SPD and the Greens led to a discharge of energy within the bourgeoisie, causing the yellow planet to lose both land mass and gravitational force.

The balance of power of the three planets was disrupted by the ruling of the Constitutional Court on November 15, 2023, which banned hidden and official debts.

Unscheduled loans in the hundreds of billions were the basis of the coalition. Everyone could feed their core from this underground reservoir of money. This basis has now vanished.

Antoine de Saint-Exupéry gave his little but lonely prince the rose he loved, with which he could philosophize about responsibility and loss:

Christian Lindner's rose is Olaf Scholz. Thanks to the gravity of the office, the chancellor is the only one who can now take over the balancing of interests in this three-star system. The trick is finding common ground among the coalition partners.

If this doesn't happen, the planetary migration will continue, and the entire Red-Green-Yellow galaxy could end up like a supernova before the next election day — in oblivion.

• In the Pioneer Podcast, China expert Frank Sieren talks about China's role in the potential peace deal in Ukraine.

• JPMorgan CEO Jamie Dimon warns that inflation and interest rates in the US could stay higher for longer.

• A biopic about Amy Winehouse hits theaters this week.

Guest in Beijing: Russian Foreign Minister Sergei Lavrov has landed in Beijing for a two-day visit. According to the Russian Foreign Ministry, Lavrov will hold "intensive talks on pressing issues" with his Chinese counterpart Wang Yi. The Ukraine crisis is on the agenda.

German Chancellor Olaf Scholz will also travel to Beijing on Saturday - accompanied by Environment Minister Steffi Lemke (Greens), Agriculture Minister Cem Özdemir (Greens) and Transport Minister Volker Wissing (FDP).

Conversation with Frank Sieren: I spoke with journalist and author Frank Sieren about his expectations for these visits on the Pioneer Podcast. He has lived in Beijing for more than 20 years and is one of Germany's leading experts on China. Regarding China's motives behind a possible mediation role in the Ukraine conflict, he says:

When asked if Scholz is serving as the ‘Chancellor of Peace’ on his visit to China, Sieren replied:

Good news: According to data from the Federal Statistical Office released yesterday, the German industry reported surprising growth in February. While experts had predicted only a 0.3 percent increase over the previous month, German production - including industry, construction and utilities - rose by 2.1 percent.

The main driver behind this most substantial increase since the beginning of 2023 is the construction sector, which achieved growth of 7.9 percent.

Back to Back: After a growth of 1.3 percent at the beginning of the year, economists were fascinated with this second positive result. Jörg Krämer, chief economist at Commerzbank, said:

JPMorgan CEO Jamie Dimon warned that US inflation and interest rates might linger at elevated levels longer than anticipated by the markets. In a letter to shareholders of the largest US bank, Dimon stated:

Therefore, JPMorgan is prepared for interest rates above eight percent and as low as two percent. One should not be fooled by the strong growth of the stock market in recent months.

This may surprise some investors as many expect one or more rate cuts later this year.

For more in German, check out: The US Economic and Stock Market Recovery is the Best Recovery Money Can Buy.

TSMC, the world's top semiconductor manufacturer, intends to construct a third semiconductor plant in Phoenix, Arizona, increasing the total investment from the initially planned $40 billion to over $65 billion. This expansion follows the acquisition of substantial funding under the US Chips Act, aiming to establish three cutting-edge facilities by 2030.

With significant financial support, TSMC is aggressively investing, particularly capitalizing on attractive incentives offered by the US. For instance, the Taiwanese company secured $6.6 billion in direct financing and $5 billion in low-interest loans. Additionally, it benefits from tax breaks that are expected to cover up to 25 percent of TSMC Arizona's qualified investment expenses.

The underlying motive behind TSMC's expansion plans emphasizes the sustained demand for advanced semiconductor technology and reflects the US' commitment to bolstering its position in global semiconductor manufacturing. Furthermore, it underscores the ongoing competition against China for a substantial advantage in this critical sector.

Investors liked this strategic move — the company's stock price immediately jumped nearly two percent.

For several years now, a new genre has been dominating Hollywood: the "biopic," a blend of the words "biographical" and "picture." It's not a documentary; instead, an actor takes on the role of the real person being portrayed. Elton John had his moment in Rocketman, as did Queen frontman Freddie Mercury with Bohemian Rhapsody.

Now it's Amy Winehouse's turn. In Back To Black, Marisa Abela portrays the British soul and jazz singer who tragically died at 27. The movie hits theaters this week.

However, reviews of the Winehouse biopic have been negative. Johanna Adorján writes in the Süddeutsche Zeitung that the lead actress "certainly puts in a lot of effort, probably couldn't have done it better and occasionally looks the part - but there's just no sparkle." She specifically notes:

Johanna Adorján's conclusion couldn't be more straightforward:

Wishing you a wonderful start to your day. Stay informed. Stay with me.

Best wishes,