German government in slow motion collapse

The German government has finally come undone after months of tense disagreement between its three coalition partners. Last night, Chancellor Scholz fired his finance minister, who is also chairman of the Free Democratic Party (FDP). In doing so, Scholz triggered the FDP to walk away from the government.

Chancellor Scholz has now promised to hold a vote of confidence in the government, but not until January. If parliament does not back him, elections will be held in March 2025, six months ahead of schedule.

Three other FDP ministers have now also resigned from the government. Scholz’ Social Democrats will continue meanwhile as a minority administration with the Greens. They will rely on vote by vote support from the centre-right conservatives to get legislation through.

It puts the conservatives, way ahead in the polls, in an even stronger position.

Olaf Scholz maintained his usual unruffled exterior last night as he delivered a bitter explanation as to why he had fired Christian Lindner.

“Too often, Federal Minister Lindner has blocked laws in an irrelevant manner. Too often he has engaged in petty party-political tactics. Too often he has broken my trust”, the chancellor said.

Lindner responded that “Olaf Scholz has shown that he does not have the strength to enable our country to make a new start”, insisting that Germany’s economic woes required a “new economic awakening in our country”.

The German economy – the powerhouse of the European Union – has stalled. The IMF predicts Germany will enjoy zero economic growth this year.

Lindner’s FDP favoured cutting Germany’s social welfare budget to fund tax breaks, at odds with Scholz’ Social Democrats and the Greens.

The coalition partners have been at loggerheads for a year now, ever since a ruling by the constitutional court blew a €60 billion hole in their spending plans.

European leaders come to Scholz’s defence

In November 2023, judges ruled that syphoning the money remaining from Germany’s covid recovery fund into the government’s coffers was illegal. The government was forced to raise taxes and massively scale back its ambitions.

Chancellor Scholz has also been under huge political pressure from all sides. An anti-migrant jolt to the right to try and win back voters in regional elections in September upset the Greens and failed to prevent an uptick in support for populist parties.

Keeping the remainder of his government together until the confidence vote in the new year will be hard enough.

Forced to deal with the unfolding political crisis at home, Scholz cancelled a long-planned visit to Budapest where he was supposed to meet with fellow European leaders today and tomorrow.

That has raised questions over whether Germany – usually the driving force in the EU – is going to be distracted for months to come.

European leaders are used to seeing at least one of their number facing an election and were quick to jump to the Chancellor’s defence this morning.

“Olaf Scholz is a strong leader, I know him very well”, said the Nato chief and former Dutch Prime Minister Mark Rutte. “I think he will navigate, during the coming months, making sure that Germany plays its role on the world stage.”

“Germany is a strong democracy and a strong economy, I’m sure they will sort it all out”, said Croatian Prime Minister Andrej Plenković, optimistically.

But the number of political crises coinciding in European member states right now is significant.

“I certainly notice that in [our] three neighbouring countries of Germany, France and Belgium there is currently no government with a majority in parliament”, said Luxembourg’s Prime Minister Luc Frieden.

“That is certainly an undesirable situation. That is why I hope that we will soon regain strong majorities in all of these member states of the European Union, so that they can use their strength as the European Union to deepen our relationships, unite us and find common answers to the big questions of our time.”