Among the key policies in the coming German election are defence, taxation, infrastructure and Europe © FT montage; Getty Images

Angela Merkel has come to dominate German — and European — politics since she first became chancellor in 2005. On September 24 she will attempt to lead her CDU/CSU conservative bloc to a fourth successive victory.

Ms Merkel has always had to govern in coalition — either with the centre-left Social Democrats or the liberal Free Democrats. Consensus is embedded in German politics. But the electoral arithmetic has become much more complicated since the emergence of the Alternative for Germany (AfD), a populist rightwing party that hopes to enter the Bundestag for the first time this year.

Germany’s economic success has also shifted voters’ priorities and affected the choices they can make. How should the government spend the budget surplus that is the fruit of that success? Should Germany contribute more to international defence and security?

Other big issues remain high up the political agenda, such as preventing a repeat of the eurozone debt crisis and responding to the migration pressures on Europe.

Here are some of the key policies of the six main national parties in this month’s contest.

Immigration

The arrival of more than a million asylum seekers since 2015 has turned immigration into one of Germany’s hottest political issues.

Most parties, with the noticeable exception of the AfD, want to leave the current asylum regime broadly untouched, though some advocate a more equitable distribution of refugees across Europe.

The CDU has resisted demands from its Bavarian sister party, the CSU, for an annual refugee ceiling of 200,000. It wants to reduce inflows by striking more deals with third countries outside the EU to keep refugees from entering the bloc. It has also called for more deportations of failed asylum seekers.

Meanwhile, both the SPD and the FDP want to create a new channel for non-EU economic migrants with a Canadian-style points system to attract skilled labour.

The Greens and the Left want to keep Germany as open as possible to refugees and migrants and advocate rolling back some recent curbs on asylum seekers. The Left party wants to give all refugees the right to stay.

By contrast, the AfD wants to seal Germany’s borders and calls for net emigration of 200,000 people a year.

Defence

Defence spending is one of the few themes where the positions of Ms Merkel’s CDU and its centre-left rivals clearly diverge.

At issue is whether Germany should continue to ramp up spending to 2 per cent of gross domestic product by 2024, a commitment given to Nato and vociferously demanded by US President Donald Trump. That means almost doubling the €37bn Germany currently spends, which represents 1.2 per cent of GDP.

The CDU is sticking to the 2 per cent target. The SPD would increase defence spending by less, saying it does not want to plunge Germany into a “new arms race”. It would instead focus on EU-based defence co-operation, leading eventually to a European Army.

But the FDP says Germany should spend as much as 3 per cent of GDP on international security.

The Greens want a larger German contribution to UN peacekeeping forces rather than higher military spending.

The Left is calling for cuts in defence spending, an end to Nato’s expansion, a halt to Nato foreign military missions and, eventually, the alliance’s replacement by a Europe-wide security pact, including Russia. It wants general disarmament.

The AfD wants Nato to be limited to a narrowly defensive alliance operating inside its own borders. It also wants to bring back military conscription.

Taxes

Last year Germany’s budget surplus swelled to a post-reunification high of €23.7bn, boosting election promises of tax relief. Parties across the spectrum are proposing cuts to income tax to ease the burden on lower earners.

The CDU’s proposed tax cut is worth €15bn, while the FDP’s is twice that amount. But the SPD, Greens and the Left want higher taxes for upper bracket earners: the SPD wants to raise the top rate of income tax from 42 to 45 per cent, while the Left is advocating a 75 per cent tax on annual incomes over €1m.

The CDU, SPD and FDP are all proposing a phasing out of the solidarity surcharge tax, introduced in 1991 to pay for German reunification, which would amount to a multibillion-euro tax cut.

Parties on the left are also proposing a range of wealth and asset taxes. The Left would introduce a wealth tax on assets above €1m. The Greens are proposing some form of asset tax, while the SPD would jack up inheritance tax. The economically liberal CDU and FDP are opposed to any such taxes.

The AfD seeks tax relief for those on low and middle-incomes but insists on balanced budgets.

Public investment

Martin Schulz’s SPD has put investment at the heart of its election campaign, promising to spend €30bn extra over the next four years on Germany’s neglected roads and railways, schools, hospitals and care homes.

The Left has proposed a still greater €100bn ramp-up in state spending, but otherwise no other party comes close to the scale and breadth of the SPD’s promises.

The Greens promise 100 per cent renewable energy by 2030, while the CDU would raise research and development investment to 3.5 per cent of GDP from 3 per cent at present. The FDP would bolster education spending and pump an extra €2bn a year into road-building for the next 20 years, and pledges it would fund such projects with €10bn from selling stakes in Deutsche Bahn, Deutsche Telekom and Deutsche Post.

Euro

Europe’s debt crisis has dominated many of Ms Merkel’s years in office, while Brexit is the next institutional challenge for the EU. Some policymakers are looking at ways of strengthening the bloc for the longer term.

Ms Merkel’s CDU would back the formation of a European Monetary Fund to provide support for struggling eurozone countries.

The SPD has far more extensive plans for EU reform and integration, proposing co-ordinated economic policy for the eurozone, tax harmonisation, a European social union to ensure common welfare standards and more flexible fiscal rules.

By contrast, the FDP would strengthen the EU’s “no bailout” rule and enforce fiscal rules with sanctions. The party supports a “Europe of different speeds”, and would modify treaties to allow countries to make an orderly exit from the eurozone.

The Left demands greater flexibility for countries pursuing more expansive fiscal policies, and would set each country’s minimum wage at 60 per cent of its national average wage.

The AfD wants Germany to pull out of the euro and to stop supporting bailouts.

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