Robert Habeck’s visit to Washington will focus on the future of German prosperity. But the Vice Chancellor also wants to build the new world order.
For a year now, the war against Ukraine has dominated the world situation and also Robert Habeck’s appointment calendar. Weapons deliveries, gas imports, raw material replacements, sanctions, a turning point, out and in with coal and nuclear power, expansion of renewables and on the horizon also a threatening conflict between China and the USA – everything ends up on the table of the German Federal Minister for Economic Affairs and Climate Protection.
You could also put it this way: With nobody else everything is so closely connected as with Robert Habeck. No one is as close to Chancellor as the Vice-Chancellor. After his trip to Stockholm, he landed in Washington on Monday. His mission is once again: prevent the worst and at the same time get the best out of it.
A particularly thick file has been lying on Habeck’s desk for months. It contains a monstrous word from America – the so-called Inflation Reduction Act, or IRA for short. In addition to the other tasks that can hardly be solved, this US law is currently Habeck’s most important minor matter in the world. Because America is finally starting its own energy transition with the IRA and is joining the Paris climate agreement; the law is also a threat to Europe as a business location.
At some point, Habeck will have to be measured by the success of this trip to Washington. If things go well, there might even be a green, prosperous free trade area between the USA and the European Union at the very end, combined with raw material suppliers who are sympathetic to them worldwide. It would be to Habeck’s taste and a step towards a values-based, climate-neutral foreign trade policy.
But if things go badly, the prosperity of Germany and the EU is even more at risk than it already is when the world situation is unsettled. In the worst case, a trade war threatens. What will then become of the German energy transition is unclear.
A compliment with a big but
It’s not just the jet leg. After a year of difficult, unsolvable tasks, Robert Habeck’s hardships are noticeable when he makes his first statement in front of the White House. The topics are so varied and complex that even he who particularly enjoys explaining the big picture has to get tangled up in the details from time to time. He looks tired but patient. Interested, but also irritated.
And he seems a little too effusive as he praises the Inflation Reduction Act, saying, “That’s very welcome!” Habeck appreciates the Biden government for the American version of the European Green New Deal.
But America’s dawn into a green age casts a shadow over the transatlantic friendship, which seems to be without alternative these days.
A green monster project
It’s easy to see why: The IRA is a law the Biden administration calls it to cover up its greatest weakness. Democrats need to get high inflation under control to maintain a chance at the next presidency.
In the long term, the package should really lower and stabilize prices in the USA. Above all, however, the IRA is a gigantic, historically expensive and also extremely unbureaucratic investment and subsidy program that is intended to catapult America as a business location into a green age with hydrogen economy, electric cars, wind and solar power. “Build back better” was the original name for it.
From Europe there was first enthusiastic applause. People were happy that Joe Biden, as anti-Trump, somehow steered this law through Congress against the will of many Republicans. The USA is finally taking the green path set out in the Paris climate agreement.
It was only gradually and after warning calls from German business that some people realized: This is “America First” under Joe Biden with a green coat of paint. Because the Americans’ Inflation Reduction Act, with its many tax breaks, could distort competition and cause companies to leave the EU. At a time when Europe is more dependent than ever on the United States. A green project from the USA is threatening the success of the energy transition in Germany.
Doorknobs cleaning in the White House
To prevent this, Habeck, his ministry and the European Union have been digging in Washington for months. They put the common challenges in the foreground: Russia, China and the climate. In order to master this, the partners should not trip each other up. It’s hoping for insight from the USA and courting raw material partnerships, of which no one knows exactly what they should really look like.