The political crisis in Germany, one of the EU’s key powers, has left Europe “rudderless” ahead of Donald Trump’s return to the White House, writes The Wall Street Journal.
Previously, amid problems coordinating the German budget for 2025, the Chancellor Olaf Scholz announced the dismissal of the Minister of Finance Christian Lindner and the intention to go to the Bundestag in January with a request for a vote of confidence. This marked the collapse of the ruling traffic light coalition (it received its name from the colors of its constituent parties: red for the Social Democrats (SPD), to which Scholz belongs, yellow for the FDP, green for the Greens).
The chancellor reproached the FDP leader for caring only about the interests of his own party, including blocking laws that do not fall within his sphere of competence. Lindner responded by blaming Scholz for the coalition’s collapse. Scholz’s advisor on economics and finance will be the new Finance Minister Jörg Kukissaid a government spokesman Steffen Hebestreit. Early elections could take place no later than the end of March.
Trump has promised to impose tariffs of 20 percent on all imports from Europe and 60 percent from China upon his re-election, which the Ifo Institute for Economic Research in Munich estimates will reduce German exports to the United States and China. by 15 and 10 percent respectively. . The tariffs could cost the German economy 33 billion euros of GDP, according to Ifo.
According to the head of macroeconomics at ING Carsten BrzeskiDue to political uncertainty, Germany could return to recession this winter.
Meanwhile, the US president-elect’s “open hostility” towards Ukraine increases pressure on Europe, the newspaper writes. Trump threatened European NATO allies that he would not protect them from Russia if they did not meet their financial obligations to the alliance.
Following the collapse of the ruling coalition, Scholz hopes to pass some urgent bills, particularly on the economy, aid to Ukraine, security and immigration. Germany has so far allocated more than 15 billion euros ($16.2 billion) to Ukraine, making it kyiv’s second-largest donor after the United States. Following the collapse of the ruling coalition, Germany is now governed by a minority government made up of representatives of the SPD and the Greens, and will have to enlist the support of the opposition bloc of the Christian Democratic Union and the Christian Social Union (CDU). /CSU) when agreeing on any legislation before holding early elections, RBC reminds.
