The Berlin debate on public procurement reforms is coming for Brussels

Hello and a big welcome to our new friends from Gallimard, Statkraft, cKinetics and others.

A debate over how public procurement rules should be reformed and whether they should include social conditionalities such as mandatory collective agreements clauses seems poised to move from Berlin to Brussels in the upcoming months.

After the German SPD—the oldest workers’ party in Europe—recently lost two of three regional elections, its Secretary General, Kevin Kühnert, said the group needs to become more visible in the government coalition. It has often been squeezed between its more outspoken partners, the Greens and the pro-market liberal party FDP.

Alongside a promised stabilisation of public pension levels and retirement ages, for the SPD, this would mean finally get one of its remaining pet projects from the coalition treaty over the finish line:

In 2021, Germany's three ruling parties agreed to strengthen the position of trade unions by encouraging more firms to conclude collective agreements. More specifically, they looked at public procurement rules as a route to achieve that.

For companies to participate in public tenders at the federal level, the coalition agreed to make it mandatory to pay their workers’ wages bases on existing collective agreements.

Three years on, however, the rules haven't been implemented yet, and several deadlines have been missed when the responsible Labour Minister, Hubertus Heil (SPD, S&D), wanted to adopt the draft law.

While the federal level only accounts for 12% of public procurement in Germany - more specifically, 22% of public construction projects - multiple German Länder (states) already have similar laws.

As the European Commission is considering revising its own public procurement rules—which the director of the EU executive's internal market unit, DG Grow, said will be one of her key upcoming tasks—it would be well advised to note the sticking points within the Berlin debate.

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