Germany’s governing coalition is in crisis after Chancellor Olaf Scholz fired a key minister and said he would call a vote of confidence in his government early next year.
Scholz said he had no trust in Finance Minister Christian Lindner, who leads a rival party that has been part of the coalition along with Scholz’s Social Democrats and the Greens.
The move means Scholz’s government no longer has a majority in parliament. The confidence vote could lead to early elections by March.
The so-called “traffic light” coalition led by the chancellor has ruled Germany since 2021.
But the internal tensions had been bubbling up for weeks before exploding into the open on Wednesday night.Scholz harshly criticised his former finance minister, saying he had “betrayed my confidence” and accusing him of putting 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.
The crisis inside the coalition plunged Europe’s largest economy into political chaos, hours after Trump’s election triggered deep uncertainty about the future of the continent’s economy and security.
When the coalition between the chancellor’s centre-left Social Democrats, the environmentalist Greens and economically liberal FDP was formed in 2021, each party planned to spend big on its own individual core interest groups.
But then Russia launched its full-scale invasion of Ukraine, energy prices shot up and Germany was suddenly confronted with a huge and controversial increase in defence spending – and the cost of taking in 1.5 million Ukrainian refugees.
Now Germany is facing its second year without economic growth. The prospect of a Trump presidency is simply adding to the sense of urgency that Germany needs a strong government and policies to kickstart the economy.
For Chancellor Scholz and his Green partners, the answer to the crisis is to loosen constitutional rules on public debt to allow more spending. But that is something which the free-market FDP are strongly opposed to.Instead, Lindner wants to get the economy going by cutting taxes, paid for 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.
Scholz announced that a vote of confidence would be held in Germany’s parliament, the Bundestag, on 15 January. If MPs vote down the government, the country would hold fresh elections within weeks, instead of the scheduled date in September.
The CDU is currently far ahead in the polls. Scholz’s Social Democrats and the far-right Alternative for Germany are tied for second.