Germany’s ruling coalition collapsed on Wednesday, the 6th of November, with Chancellor Olaf Scholz sacking his Finance Minister Christian Lindner from the Free Democratic Party (FDP), paving the way for early elections and triggering political chaos in Europe’s largest economy hours after Donald Trump won the US presidential election, reports Reuters.
As reported, the next German Finance Minister will be the senior German Chancellery official and Deputy Finance Minister Jörg Kukies.
The Scholz government, which is experiencing low popularity and struggling with internal disputes over the budget, is planning a confidence vote on the 15th of January, which could trigger early elections by March.
After the dismissal of the finance minister, Scholz will lead a minority government with his Social Democrats and the Green Party, the second largest party.
“We need a government that can act, that has the strength to take the decisions our country needs,” Scholz told reporters.
Scholz said he sacked Lindner for his obstructionism in budget disputes, accusing the minister of prioritising party over state and blocking legislation on baseless grounds.
To pass the budget and increase military spending, Scholz expects support from opposition leader Friedrich Merz, whose Conservatives are leading in the polls.
The crisis in the German government amid economic stagnation, ageing infrastructure and military unpreparedness could intensify public discontent with the ruling parties, potentially boosting support for populist groups such as the anti-immigrant Alternative for Germany (AfD).
Chancellor Scholz proposed energy cost caps for businesses, support for the car industry and more support for Ukraine, but faced opposition from Lindner and the FDP, who argued for spending cuts, lower taxes and a slower German transition to a carbon-neutral economy.
Speaking after Scholz, Lindner said the chancellor had tried to force him to break the constitutional spending limit, which would reportedly raise an additional three billion euros in aid for Ukraine, bringing the aid package to 15 billion euros, which Lindner has refused to support.
“Olaf Scholz refuses to admit that our country needs a new economic model,” Lindner told reporters. “Olaf Scholz has shown that he does not have the power to give his country a new stimulus.”
While the coalition SPD and the Greens differ on some issues, they agree on the need for targeted government spending.
Economy Minister Robert Habeck said the coalition remains deadlocked on filling next year’s budget deficit, expressing disappointment at the lack of unity at a critical moment when Germany is playing a leading role in Europe.