As Germany’s Ruling Coalition Implodes, What’s Next For Chancellor Scholz?

Germany’s ruling three-party coalition has collapsed after Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner of the Free Democrats (FDP) party on Wednesday.

Why did the finance minister get the sack?

The chancellor had submitted a «comprehensive plan” to the finance minister to close the budget shortfall estimated at €10 billion ($10.7 billion).

Scholz refused to accept other options, insisting that «this ‘either or’ is poison — either security or cohesion, either supporting Ukraine or investing in Germany’s future.»

Scholtz’s budget would have required Linder to break the constitutionally-enshrined spending limit known as the debt brake that restricts the federal deficit to 0.35 percent of GDP.

But he rejected Scholz’s proposals, saying such a move would have “violated my oath of office.”

Scholz claimed Lindner “showed no willingness to implement any of our proposals,” and had often “blocked laws in an inappropriate manner,” engaging in “petty party-political tactics.”

Linder advocated financial restraint, adherence to strict spending rules and cutting taxes.

A finance ministry paper leaked last week listed a series of financial and economic proposals that included cutting welfare payments, reducing climate protection measures to stimulate economic growth and offering tax cuts for companies. The FDP’s coalition partners were opposed to such measures.

After his sacking, Lindner said Scholz had “long failed to recognize the need for a new economic awakening in our country,” and “long played down the economic concerns of our citizens.”

The Eurosceptic opposition Alternative for Germany (AfD) party welcomed the implosion of the governing coalition that had led Germany into an economic abyss.

«After months of gridlock and countless self-centered therapy sessions, we now urgently need a fundamental political fresh start to lead the economy and the country as a whole out of the severe crisis into which it has been plunged by the ideology-driven policies of the SPD, Greens and FDP,» (AfD) parliamentary leaders Alice Weidel and Tino Chrupalla said.

Scholz, who will now head a minority government with his Social Democratic Party (SPD) and the Greens, has called for a confidence vote in his government slated for January 15.

Friedrich Merz, leader of main opposition party the center-right Christian Democrats, is pushing for an immediate no-confidence vote.

“We simply cannot afford to have a government without a majority in Germany for several months now, and then campaign for several more months, and then possibly conduct coalition negotiations for several weeks,” Merz said.

If Scholz loses the vote, German President Frank-Walter Steinmeier would have to dissolve parliament and call a snap general election within 21 days.

Just 28 percent backed Scholz and 26 percent – the Greens led by Economy Minister Robert Habeck.14 percent supported AfD’s Alice Weidel.

Chancellor Olaf Scholz’s own popularity ratings have hit new lows 18 percent, according to a September poll by Infratest Dimap. The SPD scored a humiliating 14 percent of the vote in the European Parliament elections in June, trailing behind the conservative CDU/CSU alliance and the AfD.