For years Germany was seen as a rock of stability and predictability in the EU. These days, its partners wonder what curveball Berlin will throw at them next.
Last week the German government sent shockwaves through Brussels by withdrawing its support for a piece of legislation that it had long appeared to back: the EU’s new supply chain law.
The volte-face was a stark example of how chaos in chancellor Olaf Scholz’s unruly coalition of Social Democrats, Greens and liberals is disrupting EU policymaking — something even senior German officials were forced to admit.
“The fact Germany is abstaining at the last minute on the supply chain law, despite consenting to [it] earlier, damages our reliability as a partner and our weight in Europe,” said foreign minister Annalena Baerbock, a Green politician.
German diplomats and EU lawmakers worry that Berlin’s behaviour is stirring up animosity in other capitals. “You can see the resentment growing,” said René Repasi, a German MEP from Scholz’s Social Democrat party. “It’s leading to a situation where people in Brussels begin to doubt if they can rely on Germany. The basic trust is destroyed.”
The landmark law — known as the Corporate Sustainability Due Diligence Directive — would require companies to screen their supply chains for environmental and human rights abuses. It marks one of the bloc’s most ambitious attempts to try to raise standards in countries outside the EU as well as among its own member states.
Last Friday, EU ambassadors were set to approve the draft law, which had already been negotiated and agreed by the European parliament and member states. But in a last-minute U-turn, Germany said it would abstain from the vote because the liberal Free Democrats (FDP) had suddenly announced they opposed it.
“We don’t want to overburden companies,” said Lukas Köhler, deputy head of the FDP group in the German parliament. “I think that during a recession, at a time where we have really big problems, we can’t consent to a law that massively expands companies’ obligations.”
The intervention opened up a bitter rift between the FDP on the one side and the SPD and Greens on the other, which both backed the directive to the hilt. But despite frantic internal talks the row could not be resolved, meaning that the German ambassador would have to abstain.
A cascade of other countries, including Italy, Bulgaria and Austria, followed suit and signalled they would also abstain or vote against, according to officials and lawmakers familiar with the matter. This left the law in limbo, with the vote postponed multiple times this week and the likelihood increasing that it will be pushed back until after EU-wide elections in June.
Back in Germany, the FDP’s change of heart comes at a dramatic time for the party, with its approval ratings at rock bottom and showing few signs of a recovery.
Since entering Scholz’s government in 2021 the FDP has endured a string of regional election defeats, losing its parliamentary representation in Bavaria and Lower Saxony and being left out of ruling coalitions in North Rhine-Westphalia and Schleswig-Holstein.
That, experts say, explains its willingness to take a stand on issues seen as crucial to its traditional voters, especially in the business community — even at the cost of exasperating its partners in Berlin and Brussels.
“The FDP always wants to increase its profile, and it’s doing that even more now in response to its poor poll ratings and bad election results,” said Uwe Jun, a political scientist at the University of Trier. He said the party had made it clear to its coalition partners that it wasn’t happy with the supply chain law, but “they just wouldn’t budge. So it felt it had to go public.”
This is not the first time an FDP intervention has gummed up business in Brussels. Last February it forced Scholz’s government to withdraw support for a new law to ban internal combustion engines in new cars after 2035.
It also caused a final vote on regulations to cut emissions in heavy duty vehicles to be delayed earlier this month. Both last-minute moves resulted in Brussels allowing exemptions for certain carbon-neutral fuels in both sets of regulations.
The FDP also opposed plans to introduce an EU-wide maximum limit of €10,000 for cash payments, designed to make it harder for criminals to launder money.
Under Chancellor Angela Merkel, Germany also occasionally abstained on crucial votes if the coalition partners in Berlin couldn’t agree on a common position, in what became known as the “German vote”.
But Scholz’s government came into power promising a new approach. “The government will make sure that Germany presents a united front in its dealings with European partners and institutions,” the three parties wrote in their coalition agreement.
Instead, the situation has worsened, according to the opposition Christian Democrats (CDU) once led by Merkel. Christoph Ploß, a CDU lawmaker, said the liberals were now routinely raising objections to laws that had already gone through “trilogue” negotiations between EU governments, parliament and commission.
“We’re seeing Germany undo legislative packages . . . whose passage should be a formality,” he said. “That really damages Germany’s reputation. The other EU states are just shaking their heads in disbelief.”
Many in Berlin fear consequences beyond reputational damage. Repasi, the Social Democrat MEP, said that when Germany abstained it strengthened France’s negotiating position, often to the detriment of Berlin.
“The big concern for me is that people will go around Germany to form majorities. That means there’ll be a tendency to adopt more and more French positions, because the negotiators think: at least France will back it, and ensure there’s a qualified majority in favour.”
The supply chain law is a good example, he said. There, France insisted on — and won — a carve-out for financial institutions, a position Germany did not support.
Repasi said the FDP might also object to the EU’s new rules on “platform work”, designed to improve the working conditions of people working in the gig economy.
EU diplomats fear the German liberals could also intervene on new rules for air quality and packaging waste, which are at a similar stage in the Brussels’ policymaking process. Here a German abstention could have a critical impact on the bloc’s environmental goals, they say.
The “real venom”, according to one EU diplomat, was that countries no longer felt comfortable negotiating compromise agreements with the Germans for fear they would U-turn at the last minute.
“It’s the unreliability that is the real thorny issue and undermines trust in the Germans.”
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