BERLIN (AP) — In a stunning turn of events, the coalition government in Germany has collapsed after Chancellor Olaf Scholz made the late-night decision to remove Finance Minister Christian Lindner of the pro-business Free Democrats. This move followed extensive crisis meetings and has triggered a wave of resignations among the Free Democrats, effectively ending the coalition.
As a result of this upheaval, Scholz is anticipated to lead the country with a minority government. However, the opposition is demanding an immediate no-confidence vote, asserting that the situation necessitates swift action.
Interestingly, early Thursday morning, Transport Minister Volker Wissing of the Free Democrats reversed his resignation decision from the previous night. After discussions with Scholz, he opted to stay in his ministerial role while leaving the party.
On Thursday afternoon, Lindner is set to receive his dismissal certificate from President Frank-Walter Steinmeier. Following this, a successor is expected to be announced quickly; reports suggest that Jörg Kukies, an economic advisor to Scholz, will take over as finance minister. Additionally, the vacant positions of the research and justice ministers may also be filled on the same day.
In response to the turbulence, Scholz announced that he would pursue a confidence vote on January 15, which could potentially lead to early elections in March, rather than the previously scheduled date of September.
Scholz has accused Lindner of violating his trust by publicly calling for a significant shift in economic policy, which Scholz described as involving substantial tax cuts for high earners while simultaneously advocating for pension reductions for retirees. “That is not decent,” he stated firmly.
The left-leaning Social Democrats, now without a majority in parliament, will have to navigate governance alongside the environmentalist Greens. Scholz has expressed intentions to consult with Friedrich Merz, the leader of the opposition center-right Christian Democrats, about potential cooperation on economic and defense matters, as well as critical legislative initiatives.
However, Merz has strongly criticized Scholz’s plan to delay the vote of confidence until January, stressing, “The coalition no longer has a majority in the German Bundestag, and we therefore call on the chancellor (…) to call a vote of confidence immediately—or at the latest by the beginning of next week.” He highlighted the importance of not leaving Germany without a governing majority for an extended period.
Merz plans to meet with Scholz later in the day to advocate for a prompt vote of confidence. Given that Scholz’s government no longer holds a parliamentary majority, it is likely he would lose this vote. In such a case, Germany’s president could consider dissolving parliament within 21 days, making a potential early election possible as soon as January.
During this transition, Merz stated, “We will have enough time to find out whether there are any issues that we may need to decide on together,” signaling his party’s willingness to collaborate with the minority government.
However, Scholz’s Social Democrats and the Greens face severe challenges in passing new legislation and addressing a substantial budget deficit projected for 2025 due to their precarious parliamentary standing. Despite this, Scholz maintains that urgent legislation is needed in the coming weeks.
Achim Wambach from the Leibniz Center for European Economic Research has expressed concern that a prolonged period with a minority government may hinder Germany’s economic recovery. He stated, “Germany’s problems are too large to endure political gridlock,” emphasizing the need for effective governance and investment.
The collapse of the coalition follows weeks of escalating tensions among its members regarding strategies to invigorate Germany’s struggling economy. While Lindner’s Free Democrats opposed tax increases or adjustments to the country’s strict debt limits, Scholz’s Social Democrats and the Greens pushed for significant state investment and rejected proposals to cut welfare programs.
As the political landscape shifts in Germany, the implications for its economy and governance remain uncertain, with many observers calling for decisive action to restore stability.
