India-Germany relations: After 16 years

News: Recently, Olaf Scholz has been sworn in as chancellor of Germany, ending the 16-year tenure of Angela Merkel.

About Germany’s political system

The political system of Germany is known for its continuity. The post-War German republic has had just nine chancellors, including Mr Scholz. For the past 40 years, just three individuals have occupied the chancellery.

What are the policies adopted during Angela Merkel’s term in Germany?

1. Germany emerged from the bruises of reunification, 2. Admitted Syrian refugees to the country, 3. Demonstrate strong and sustained growth in the economy when other countries are struggling with their economic models (Except China), 4. Not declared China as a systemic rival, like France, as their middle-sized enterprises rely on supply chains that are centred in China, 5. Phased-out nuclear power in Germany, which results in various challenges.

What are the consequences faced by Germany in phasing-out Nuclear power?

1. Depend more on renewables and natural gas, 2. Germany became the largest emitter of Carbon in Europe, 3. The country has the highest electricity prices in Europe, 3, Facing challenges in achieving green transition, 4. Impacted Germany’s foreign policy: German economy needs Russian natural gas. So, they are not condemning Russian actions against Ukraine.

Why does India need to pay attention to the New Chancellor’s actions in Germany?

Germany is India’s largest trade partner within Europe and a significant contributor to manufacturing FDI within India. So the new chancellor’s actions in trade, green finance, and supply chains will impact investment and growth in India.

Source: This post is based on the article “After 16 years” published in Business Standard on 10th December 2021.