Emboldened by unprecedented highs in the European elections in Germany, a surging Green party is discovering that it can set the political agenda in Europe’s largest economy without having to be in power.

The party that was once derided for its plans for a meat-free “veggie day” at nationwide canteens is developing a taste for their opponents’ blood: pushing other parties to adopt their policies, laying down red lines for coalition talks and even hatching plans to slay the country’s holy cows on fiscal policy.

Sunday’s resignation of the leader of the Social Democratic party (SPD), Andrea Nahles, was a consequence of the junior partner in Angela Merkel’s coalition government being leapfrogged by the Greens for the first time at a nationwide poll.

On Monday, the SPD announced that a trio of senior politicians would take the helm of the centre-left party on an interim basis, but the future of its “grand coalition” with the conservative Christian Democratic Union (CDU) looks more uncertain than ever under caretakers Malu Dreyer, Manuela Schwesig and Thorsten Schäfer-Gümbel.

More political heavyweights have ruled themselves out of the race for the leadership of the crisis-hit party than thrown their hat into the ring, while backbenchers insist that the SPD’s downward trend can only be stopped by pulling the plug on the coalition with Merkel’s party.

The influential German weekly news magazine Der Spiegel even pondered in a lead article if the world’s oldest social democratic party could be dethroned as the country’s leading progressive force for good, asking “Are the Greens the new SPD?”

The CDU leader, Annegret Kramp-Karrenbauer, insisted on Monday that her party would continue its power-sharing arrangement with the SPD “as normal”, but she faces internal criticism of her own leadership qualities in the light of a Forsa poll putting the Green party ahead of the CDU for the first time, on 27% of the vote.

In an undisguised bid to prove her green credentials, Kramp-Karrenbauer said in a press conference that she would put forward plans for a tax reform that would reward companies that excelled in meeting emissions targets.

In the northern city-state of Bremen, meanwhile, where German parties are in negotiations to form a new governing coalition following another devastating result for the SPD in regional elections, the Greens are dictating red lines to the parties that want their support in government.

Local branches of the CDU and the pro-business Free Democratic party (FDP) signalled to the Green party on Monday that they would be willing to divert from their party’s national position and come out in favour of a carbon emissions tax to help reduce production of greenhouse gases.

With the Greens already leading the country’s current debate on climate change, the party, headed by Annalena Baerbock and Robert Habeck, now also wants to shape the debate on Germany’s fiscal policy.

In a new policy paper, two politicians from the Greens’ liberal Realo wing voiced criticism of Germany’s so-called debt brake, a mechanism introduced into the country’s constitution in 2009 that effectively prohibits its 16 federal states from running budget deficits and restricts the national government’s structural deficit to 0.35% of GDP.

Since 2014, Merkel’s government has been meeting its totemic policy goal of balanced budgets, the so-called black zero, and the country’s fiscal policy did not change after the hawkish finance minister Wolfgang Schäuble was replaced by the Social Democrat, Olaf Scholz.

Yet embarrassing stories about crumbling bridges, poor broadband coverage and Germany’s notoriously underfunded military have drawn attention to the country’s investment gap and a number of leading economists have urged a rethink on the policy.

European elections: triumphant Greens demand more radical climate action Read more

The paper by Green delegates Danyal Bayaz and Anja Hajduk now makes the environmental group the first major party in the Bundestag to push through that open door, arguing that younger generations in Germany are “less endangered by too much debt than by dilapidated infrastructure and missing investment into our future”.

Rather than scrapping the debt brake rule altogether, the politicians suggest it should be coupled with another rule, which commits the government to matching spending to the value loss of deteriorating public infrastructure assets.

“It’s significant that an established centrist party is at last prepared to open up the discussion whether the debt brake still makes sense,” said Christian Odendahl, the chief economist at the Centre for European Reform thinktank. “That party should really have been the Social Democrats, but they were too cautious about offending fiscal conservatives among their electorate.”