Germany in political crisis heads for early elections

German Chancellor Olaf Scholz dismissed his Finance Minister on Wednesday evening and will ask MPs to decide on the holding of early elections, drawing conclusions from quarrels that were paralyzing his coalition.

This decision, the culmination of months of wrangling between the three parties in government, plunges Europe's largest economy into an unprecedented political crisis at a crucial time for Europe, already reeling from Donald Trump's victory in the United States.

“We need a government that is capable of acting and has the strength to make the decisions that are necessary for our country,” the Social Democratic Chancellor pleaded in a solemn address.

Faced with the “ultimatums” of his Finance Minister, leader of the liberal camp, Olaf Scholz felt he had no choice: he first decided to dismiss Christian Lindner, the government's top treasurer and chairman of the liberal FDP party, then announced that he would put a vote of confidence to the deputies.

The Bundestag will decide on January 15 whether they want early elections to be held before the scheduled date in September 2025. This could be the case in March.

Christian Lindner, leader of the liberal camp, has “betrayed my trust too often”, the German leader lamented, denouncing his “selfish” behavior.

– Impasse –

The divorce was enacted after a day of crisis talks organized at the chancellery to try to save the executive led by Olaf Scholz since the end of 2021.

Coalition breakups are very rare in Germany and Olaf Scholz wanted to lead his until the next legislative elections scheduled for the September 28, 2025.

But the government team has been undermined for months by political dissensions, on the economy and immigration, and personal quarrels.

The disagreements focus on solutions to revive Europe's largest economy, which has been threatened with recession for the second year in a row.

Olaf Scholz's Social Democrats want to preserve their social priorities; Robert Habeck's Greens are pushing to fight climate change despite the costs of the transition, while the Liberals are determined to respect Germany's drastic constitutional limits on budget deficits and debt.

– Trump's shadow –

Olaf Scholz thought that the election of Republican Donald Trump, a protectionist and diplomatic confrontationist, to the presidency of the United States announced that very morning, would force his fragile coalition to close ranks.

The opposite happened. According to the daily Bild, the finance minister argued at the crisis meeting that this election and the expected impact made a change in economic direction in Germany even more urgent.

The Green Vice Chancellor and Minister of Economy Robert Habeck had urged everyone to come to their senses, stressing that with Trump back in power, “the government must be fully capable of acting.”

“This is the worst time for the government to fail,” he warned at the beginning of the week.

Another major argument against the breakup of the coalition, and therefore early elections: the conservatives are leading in the polls and their leader, Friedrich Merz, is the favorite to become chancellor.

As for the far-right AfD party, which made strong progress in the last elections, it is lying in wait in second place.

But the gap between the coalition parties had become too great in recent days, with disagreements focusing on solutions to revive Europe's largest economy, which risks being in recession for the second consecutive year.

The leak of a document by Christian Lindner with a view to a liberal “economic turning point”, contrary to the centrist line followed until now by the government, was ultimately the last straw.

The minister, a champion of budgetary austerity, had himself threatened on several occasions to leave the coalition before the end of the year if he did not obtain not winning the case.

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