Olaf Scholz rallied the tenors of his coalition in hopes of preventing the collapse of the German government. “at the worst moment”. He finally had to decide to part ways with one of the key members of the executive. The German Chancellor dismissed her Finance Minister, Christian Lindner (FDP, liberal right), a spokesperson announced on the afternoon of Wednesday, November 6.
Olf Scholz made this decision while Christian Lindner, also president of the FDP, proposed, according to several media outlets, during this crisis meeting the calling of early legislative elections at the beginning of 2025. A way to respond to the blockages regarding economic policy in the lead between his movement, the social democrats and the environmentalists, all members of the tripartite government coalition.
The fate of the coalition formed by Scholz’s social democrats (SPD), environmentalists and liberals (FDP) hangs in the balance after months of disputes over the economic and budgetary direction that should be taken in Germany, on the verge of recession. To remedy this, the majority leaders found themselves in the chancellery, where they had to spend part of the night, without certainty of being able to announce a result.
Vice Chancellor and Green Economy Minister Robert Habeck had previously urged all partners to come to their senses, stressing that with Trump’s return to power, “the government must be fully capable of acting”. “This is the worst time for the government to fail”estimated at the beginning of the week.
“Autumn of decisions”
Coalition breaks are very rare in Germany and Olaf Scholz wants to lead his until the next legislative elections scheduled for September 28, 2025. But the gap between the coalition parties has become more evident in recent days, with the leak of a document from the Minister of Finance, Christian Lindner, whose proposals for a “economic turning point” The liberals go against the centrist line followed until now by the government.
The disagreements center on solutions to revive Europe’s largest economy, which is at risk of falling into recession for the second year in a row. Olaf Scholz’s social democrats are trying to preserve their social priorities; Robert Habeck’s Greens are pushing to fight climate change despite the costs of the transition, while the Liberals are stubbornly focused on respecting Germany’s drastic constitutional limits on budget deficits and debt.
Christian Lindner also called for the end of a “solidarity tax” created in 1991, initially to finance the cost of the reunification of Germany, and the abandonment by its country of its climate objectives, more ambitious than those set by the European Union. He described the current period as“autumn of decisions”suggesting his party could leave the coalition if it does not win the case.
Before the meeting, ING bank analyst Carsten Brzeski estimated that “The German government has just entered a new phase of a slowly evolving political crisis that could be the last step before the final collapse of the ruling coalition”.
