What is the right course of action here?

Your answer is correct. The green car has the right of way here because it is on the main road, while you and the red car are on a side road indicated by the 'Yield' sign. According to German traffic rules, vehicles on a main road have priority over those entering from side roads. The red car must wait because it is turning left and must yield to both your vehicle and the green car. Since the green car is going straight, it proceeds first. You must also wait for the green car before you proceed. This rule aims to keep traffic flowing smoothly and safely at intersections with yield signs.