The New German Coalition Agreement and its Consequences

Following the elections held in Germany at the end of last year, the new coalition agreement (Koalitionsvertrag) applicable to the German Federal Government was finally signed on 16 December 2013. It remains to be seen whether this has laid the groundwork for a time of standstill, regression or progress in Germany. What is certain, however, is that the legal landscape will continue to evolve and change repeatedly during the next four years.

In what follows, we accordingly provide an overview of what may be expected in this regard, as well as supplying you with the details of the appropriate lawyers at FGvW who you could contact, if you should have any questions on any of these matters.

SMEs (Mittelstand)

The coalition agreement states that SMEs are "Germany's innovative employment engine". SMEs will thus continue to receive targeted support. In relation to the financing of SMEs, obstacles are to be reduced and care taken to ensure that no new ones arise. The classic SME financing model via savings banks, people's banks, credit unions, private and business development banks (Sparkassen, Volks-, Genossenschafts-, Privat- und Förderbanken) will remain in place. Similarly, the export and project financing for SMEs by KfW Bank will remain in existence (coalition agreement page 21).

Your Contacts:
Frank Büchler (Freiburg) - Banking Law
Arnt Göppert, LL.M. (Cologne) - Finance

Company Succession

According to the new Federal Government, company succession should not be compromised by the levying of inheritance tax. Instead, the objective should be to provide for a constitutionally solid system of inheritance and gift tax, which is sympathetic to the needs of SMEs and provides for an exemption in the event of the creation / preservation of workplaces. In parallel to this, the possibility of incorporating a "European GmbH" at the level of SMEs is to be (re)examined (coalition agreement p. 21).

Your Contacts:
Gerhard Manz, Barbara Mayer (Freiburg), Arnt Göppert, LL.M. (Cologne) - Companies Law
Albert Schröder (Freiburg) - Tax Law
Frank Büchler (Freiburg), Tobias Lenz (Cologne) - Law of Succession

Energy Policy

Germany's energy policy will gain special significance in the near future - not only on account of the reorganisation of the responsible ministries. The energy changeover (Energiewende) is to be implemented, and is supposed to be accepted by the German citizens and the economy. The coalition aims to rapidly and fundamentally overhaul the current German Renewable Energies Act (Erneuerbare-Energien-Gesetz) and intends to provide a reliable framework in this regard by as early as Easter 2014 already. The technologies of photovoltaics, biomass, wind on land, wind at sea and water power will receive special consideration (p. 49 et seq. of the coalition agreement).

Your Contacts:
Stefan Lammel (Freiburg) - Energy Law
Uwe Steingröver (Cologne) - Facility Construction Law

Criminal Law and Compliance

The coalition agreement addresses the matter of sanctioning contraventions of law in strong terms. Thus it is, for instance, recognised that the currently existing criminal and administrative / regulatory laws are not sufficiently effective in the area of financial markets; steps will therefore be initiated to effectively combat financial fraud, money laundering, tax evasion and the financing of terrorism. Furthermore, fraud in relation to the payment of VAT is recognised as the most significant form of tax evasion, and tax evasion in general is acknowledged as a problem that needs to be urgently counteracted (page 92 of the coalition agreement).

Your Contact:
Michael Tsambikakis (Cologne) - Criminal Law and Compliance

Labour Market Policy

The battle for work and qualified trained personnel will continue in the coming years. The new Federal Government intends to simplify the laws regarding fundamental security for job seekers and special regulations for modifying short term employment (p. 66 of the coalition agreement). The German Act on Secondment of Employees (Arbeitnehmer-Entsendegesetz) is to be expanded in scope, general liability declarations are to be adjusted according to the German Collective Bargaining Act (Tarifvertragsgesetz), and a statutory minimum wage is to be introduced. In addition, the obligation to adhere to collective bargaining agreements is to be fixed in public procurement law.

Your Contacts:
Stefan Daub, Christoph Fingerle (Freiburg), Sven Köhnen (Cologne), Philipp Wiesenecker (Frankfurt) - Employment Law
Volker Stehlin (Freiburg) - Public Procurement Law

Real Estate Law

The shortage of housing and price increases in the cities, and the corresponding effects on lessees have become a publicly relevant theme in past years. The new Federal Government is planning to implement a program for good and affordable housing under the title "A Quality Life in the City and the Country" (p. 114 et seq. of the coalition agreement). In addition to introducing limits on rental rates, this program focuses on an active housing construction policy. The availability of subsidies for energy efficient constructions and renovations, and the revision of planning laws are intended to make it easier for investors to create new living spaces. In addition, real estate brokers will have to act in accordance with the "order principle" in future. This matter will become particularly relevant, legally speaking.

Your Contacts:
Uwe Steingröver, Arnt Göppert, LL.M (Cologne), Tom Erdt (Frankfurt) - Real Estate Law
Volker Stehlin (Freiburg) - Public Construction and Real Estate Law

Product Liability

By making consumer protection a responsibility of the German Federal Ministry of Justice, particular attention will be paid to same during the upcoming legislative period. The new Federal Government supports repair-friendly measures in the field of the German Ecological Design Directive (Öko-Design-Richtlinie), which is of special significance for manufacturing / producing SMEs. In order to improve product safety, a European safety symbol is to be created analogously to the German GS symbol, which will also include mandatory third party verification of children's toys. Product information sheets are to be introduced for markets such as telecommunications and energy. The practicality and clarity of product information sheets is to be verified and improved by specified standardisations (p. 126 of the coalition agreement).

Your Contacts:
Tobias Lenz, Carsten Laschet (Cologne) - Product Liability and Product Safety

Copyright and Media Law

The new Federal Government intends to adapt the somewhat outdated current copyright law to the requirements and challenges of the digital age. The intent is to fairly balance the interests of, amongst others, authors / inventors and users, and to strengthen the value of creative performances. In order to provide more effective protection for trademark holders, inventors and other creative entities against the violation of rights via the worldwide digital network, the Federal Government also intends to enter into binding European and international agreements (p. 133 of the coalition agreement).

Your Contacts:
Hans-Georg Riegger (Freiburg) - Competition Law and Copyright Law Norbert Hebeis, Morton Douglas (Freiburg) - Trademark Law

IT Law

The German Ministry of Transport will (also) be responsible for digital infrastructure in future, and will therefore - in conjunction with other ministries - have to implement a major focal point of the coalition agreement, which has not received much attention thus far. This includes the "Digital Agenda for Germany". Electronic communication is to be strengthened in all fields, and IT security improved. Changes in the telecommunications law in response to new requirements are envisaged, "cyber-crime" is to be prevented through adjustments to criminal law, and data protection improved following the lessons learned from the NSA scandal.

Your Contacts:
Werner Bachmann, Frank Jungfleisch (Freiburg) - IT Law and Data Protection
Michael Tsambikakis (Cologne) - Criminal Law

Antitrust Law

Pursuant to the coalition agreement, the on-going development of European competition and antitrust law is a determining factor in Germany and Europe's ability to compete internationally. Accordingly, it is intended that the effects of the 8th Amendment of the Act against Restraints of Competition are evaluated as soon as possible, and further steps examined to tighten administrative and court procedures in cases of antitrust violations. The new Federal Government intends to strengthen the enforcement of antitrust laws both on a national and international level (p. 125 of the coalition agreement).

Your Contacts:
Christian F. Genzow, Sven Köhnen (Cologne), Hans-Georg Riegger (Freiburg) - Antitrust Law

Manager Liability

The previous German Federal Governments had already intensively dedicated themselves to ensuring greater personal responsibility / liability of company managers. In addition to managing directors, supervisory board members have in this process increasingly moved into the focus of the legislators in terms of being held liable. Pursuant to the shift of responsibilities in accordance with the coalition agreement of the determination of and transparency in relation to manager salaries (p. 17 of the coalition agreement), questions concerning the responsibilities of acting persons may once again be expected to come to the forefront.

Your Contacts:
Tobias Lenz, Carsten Laschet, Björn Fiedler, LL.M. (Cologne) - Manager Liability and D&O Insurance

Europe and International Affairs

Finally, the new Federal Government has dedicated nearly 30 pages (page 156 et seq. of the coalition agreement) to the significance of Germany in Europe and the world. In this regard, too, FGvW is there to advise and guide you whenever the need should arise.

With offices in Brussels and Alicante, our co-operation offices in Istanbul, Shanghai and Sao Paulo, as well as our international partners, we accompany you to wherever in the world you may require legal advice.

Your Contacts:
Friedrich Graf von Westphalen (Cologne), Gerhard Manz, Barbara Mayer (Freiburg) - International Commercial Law