Germany’s ruling coalition has crumbled after Chancellor Olaf Scholz sacked a key minister and announced a vote of confidence in his government early next year.
The chancellor stated he did not trust Finance Minister Christian Lindner, who leads the pro-business Free Democrats and is a coalition partner with Scholz’s Social Democrats and the Greens.
The move means Scholz’s government no longer has a parliamentary majority. The confidence vote might lead to early elections in March.
The “traffic-light” coalition has governed Germany since 2021, but internal tensions were bubbling for weeks before exploding into the open on Wednesday night.
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Scholz said his former finance minister had “betrayed my confidence” and had put the interests of his party base over those of the country.
He added that Germany needed to show it could be relied upon by other countries, particularly following the election of Donald Trump in the US.
Lindner, who leads the Free Democrats or FDP, accused Scholz of “leading Germany into a phase of uncertainty.”
The coalition collapse threw Europe’s greatest economy into political upheaval, just hours after Trump’s election raised serious concerns about the continent’s economic and security prospects.
When the coalition of the chancellor’s center-left Social Democrats, environmentalist Greens, and economically liberal FDP was created in 2021, each party intended to spend heavily on its own distinct key interest groups.
However, Russia’s full-scale invasion of Ukraine in 2022 caused energy costs to skyrocket, leaving Germany facing increased defense spending as well as the cost of housing 1.5 million Ukrainian refugees.
Germany is now facing its second year without economic growth.
Scholz and his Green partners want to tackle this by loosening constitutional rules on public debt to allow more spending. Lindner wants to pay for tax cuts by slashing welfare and social budgets and pushing back environmental targets.
Economy Minister Robert Habeck of the Greens said the party would not quit the government and that its ministers would remain in office.
If MPs vote down the government, the country would hold fresh elections within weeks, instead of the scheduled date in September.
However, the opposition could force Scholz out earlier if they can find a majority for an alternative chancellor.
For now, Scholz will head a minority government comprised of his Social Democrats and the Greens – the second-largest party in the coalition.
Without a legislative majority, Scholz’s coalition will have to rely on individual votes from other parties to implement laws and measures.
Scholz stated that he would seek Friedrich Merz, the leader of the opposition Christian Democratic Union (CDU), for assistance in passing financial measures to help Germany’s struggling economy and increase military spending.
The FDP’s resignation from the coalition means that four other FDP ministers – justice, transport, and education – will leave their positions alongside Lindner.
Scholz is expected to select a replacement for Lindner.
