Germany’s Chancellor Olaf Scholz’s plans to lead with a minority government after the governing coalition collapse plunged Europe’s largest economy into political disarray.
It collapsed dramatically after Chancellor Olaf Scholz fired his finance minister on Wednesday evening.
Christian Lindner was thrown out of the three-way coalition, prompting the three remaining ministers of the Free Democrats to resign in response.
The move has led to the downfall of the government coalition and Scholz is expected to lead the country with a minority government, though the opposition has called for an immediate no-confidence vote.
Scholz announced he would seek a vote of confidence on January 15, which he stressed he would not want to call before then. The plan might lead to elections as early as March instead of next September.
"The citizens will soon have the opportunity to decide anew how to proceed," the chancellor said, according to the German news agency dpa. "That is their right. I will therefore put the vote of confidence to the Bundestag at the beginning of next year."
The announcement came ahead of one of the Free Democrats ministers who resigned, Volker Wissing, taking back his resignation in an unexpected move on Thursday. He told reporters that after talking to Scholz, he had decided to stay on as Transport Minister and leave the party instead.
The other two ministers have already been handed their certificates of dismissal.
Lindner’s successor is likely to be named soon, after plans were made for him to receive his certificate of dismissal from President Frank-Walter Steinmeier on Thursday afternoon.
Scholz had accused Lindner of breaching his trust and publicly calling for a fundamentally different economic policy, including what the chancellor said would be tax cuts worth billions for a few top earners while at the same time cutting pensions for all retirees.
“That is not decent,” Scholz said.
His decision to sack Lindner follows weeks of disputes among the coalition partners over ways to boost the country’s ailing economy.
Scholz’s left-leaning Social Democrats will now effectively lead a minority government with the remaining coalition partner, the environmentalist Greens.
The chancellor announced he would reach out to the leader of the biggest opposition leader in parliament, Friedrich Merz from the center-right Christian Democrats, to confer on possible ways of strengthening the economy and defense. Merz has since vehemently rejected Scholz’s plan to wait to hold a vote of confidence until January and said he plans to meet with him to push for a quick vote of confidence.
He said: “The coalition no longer has a majority in the German Bundestag, and we therefore call on the chancellor (...) to call a vote of confidence immediately, or at the latest by the beginning of next week.”
“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.”
Since Scholz’s government doesn’t have a majority in parliament any longer, he would likely lose the vote, leading Germany’s president to dissolve parliament within 21 days. An early election could then be held as soon as January.
“During these 21 days, we will have enough time to find out whether there are any issues that we may have to decide on together,” Merz said, offering his party’s cooperation with the minority government. “We are, of course, prepared to hold talks (..) we are also prepared to take responsibility for our country.”
Analyst Achim Wambach, from the Leibniz Center for European Economic Research, cast doubt a prolonged period with a minority government would help Germany’s economy get back on track.
“Germany’s problems are too big to tolerate political gridlock,” he said.
“The government set out to reconcile the transformation towards climate neutrality with economic growth and social security,” the analyst said in a statement. “It has not lived up to this claim. The economy is stagnating and investments are failing to materialise.”
He added: “This daunting task was compounded by geo-economic tensions: wars in Europe and the Middle East as well as economically damaging interventions through tariffs and national subsidy policies. The election of Donald Trump has exacerbated these problems. Europe must do more for its security and will have to reckon with increased tariffs.”
