The leaders of Germany’s federal government and the coalition of parties of which it is comprised sat together for more than 30 hours this week to iron out their differences. They even met through the night from Sunday to Monday, only to travel to German-Dutch government talks in Rotterdam, half asleep.

On Tuesday evening, the leaders of the “traffic light coalition” comprising the Social Democrats (SPD), the Greens and the Liberal Democrats (FDP) finally presented a result. In a 16-page paper entitled “Modernization Package for Climate Protection and Planning Acceleration,” things are dealt with that could have been handled by a ministry department or a committee of the Bundestag (federal parliament).

For example, the installation of climate-friendly heating systems is to be regulated more precisely, solar panels are to be made mandatory along new highways, the “49-euro ticket” permitting one month’s travel on regional public transport is to be integrated into the Bahncard 100 (a nationwide travel ticket) at no extra charge, and environmental impacts are to be compensated for by nature conservation measures in the immediate vicinity.

If there was any change at all in the previous policy, it was a further softening of the lax climate protection rules. In future, the legally anchored climate targets no longer need to be met annually in each individual sector, but only in the long term and across sectors.

This is likely to have a particular impact on road transport, which is already falling far short of the climate targets. At the urging of Transport Minister Wissing (FDP), the coalition parties decided to give priority to 144 highway and road projects. The badly ailing railroads are to receive €45 billion over the next four years to renew infrastructure, which is about half the amount needed.

It is clear that the marathon coalition meeting did not just discuss details of climate policy and infrastructure development. Behind the walls of the chancellor’s office, shielded from the press and the public, very different issues were discussed: Rearmament, war, social cuts and the suppression of growing resistance to the policies of the traffic light coalition. The government is preparing for a huge confrontation with the working class.

A year ago, Chancellor Olaf Scholz announced a “new era,” whose true dimensions are now becoming clearly visible. The government is determined to rebuild Germany as Europe’s leading military power and to escalate the Ukrainian war to the point of the military defeat of the nuclear power Russia. NATO is intervening ever more directly in the war—even to the point of deploying ground troops. The Bundeswehr (Armed Forces), which this week delivered its first Leopard 2 battle tanks to Kiev, is to play a leading role.

Whereas a year ago Scholz announced a special fund for the Bundeswehr of €100 billion and a long-term increase in the armaments budget to 2 percent of gross domestic product, there is now talk of a special fund of €300 billion. Hardly a week goes by without an increase in military spending. On Wednesday, for example, the Bundestag’s budget committee released €12 billion in military aid for Ukraine. That’s six times as much as last year and represents about a quarter of Germany’s previous arms budget.

In addition, there is the huge price to pay for the financial oligarchy’s orgy of enrichment. For decades, central banks and governments have pumped trillions into the financial markets, breeding a caste of billionaires and multimillionaires that now threatens to drag the global economy into the abyss. If a bank goes into a tailspin, vast sums of money from the public purse are made available to bail it out.

The Swiss government has put the country in hock, for better or worse, to the major bank UBS in the bailout of the ailing Credit Suisse. The German government is preparing something similar should the crisis-ridden Deutsche Bank come under threat.

From the point of view of the ruling class, therefore, there is no way around passing on the full costs of militarism and the capitalist crisis to the working class. To protect the profits and billion-dollar fortunes of the rich, the standard of living of the working class is to be cut back by decades.

Fierce resistance is developing against this. In France, an open confrontation has broken out between the working class and the state. Millions are rebelling against President Macron’s pension reforms, which condemn future pensioners to a life of poverty. Macron is reacting with dictatorial means: he is ignoring the will of the vast majority, bypassing parliament, and setting heavily armed police and soldiers on the opponents of the reform.

The same development is taking place in Germany. Everything that previous generations had fought for, sometimes bitterly, is now up for grabs: a living wage and pension, health care and education for all, affordable rents, the right to vacations and much more.

The corporations and the state are using inflation to crush the living standards of the working class. The collective bargaining disputes presently underway in the public sector, at Deutsche Post and in the railroads, show how far they will go. The employers’ “offer,” which Verdi has already accepted at Deutsche Post, means a reduction in real incomes of 20 to 50 percent compared with their level 10 years ago.

Added to this are exploding energy costs and rents. While the traffic light coalition had promised to build 400,000 new apartments a year when it took office, hardly any are being built now due to the rise in interest rates. Real estate giant Vonovia has halted all new construction projects scheduled for 2023. Accordingly, the rush for rental apartments is increasing and driving up prices further.

The traffic light coalition is united in ruthlessly pushing through these attacks against the working class. Finance Minister Christian Lindner has postponed publication of next year’s budget because savings of €70 billion are still needed to comply with the debt ceiling. It is clear that these savings will come at the expense of social provisions and workers’ salaries as military spending increases. At the same time, the government categorically rejects imposing higher taxes for the rich.

In 2021, we wrote that the traffic light coalition programme for government was “a declaration of war on working people and a commitment to militarism.” That has been confirmed again and again since then. But in the meantime, resistance is growing. This is shown by the massive participation in the public sector strikes, which are coinciding with a wave of strikes and protests throughout Europe.

This is putting pressure on the traffic light coalition and causing internal tensions, but also pushing it further to the right. In the process, it is leaning on the unions to keep the growing resistance at bay. For example, Verdi simply ignored the overwhelming decision to strike by postal workers and agreed to lower real wages. As the conflicts intensify, the German government—like Macron—will resort even more to state repression and violence to suppress resistance.

The federal election had already demonstrated that the government had little popular support. Never before had a chancellor been elected with so few votes as Olaf Scholz. If the high abstention rate is taken into account, not even 20 percent of eligible voters gave the Social Democrats their vote in 2021. Willy Brandt was supported by 42 percent of eligible voters in 1972 and Gerhard Schröder by 33 percent in 1998. For the first time in the history of the Federal Republic, three parties were needed to form a government majority following the last federal elections.

Since then, support for the traffic light parties has continued to dwindle. The same is true of the other parties—the Christian Democrats (CDU/CSU), the far-right Alternative for Germany (AfD) and the Left Party—all of which support the government’s policies and stand ready to continue them should the coalition collapse.

In 1934, the revolutionary Marxist Leon Trotsky wrote of France, which was then in a similar political situation:

The policy of plundering and suffocating the masses is not an evil whim of reaction, but the consequence of the decomposition of the capitalist system. This is the basic fact which every worker must embrace if he does not want to be deceived with hollow phrases.

The same is true today. To repel the government's attacks and fight against wage cuts, welfare cuts, war and state repression, the working class needs a socialist perspective and its own party. It must break with the stooges of the financial oligarchy in the trade unions and build independent rank-and-file action committees.

No social problem can be solved without expropriating the banks and corporations, putting them under the democratic control of the working class and reorganizing the world economy according to the needs of society. This is what the Sozialistische Gleichheitspartei (Socialist Equality Party) and its international sister parties in the Fourth International are fighting for.