Germany’s three-way parliamentary coalition between the Green Party, the Social Democrats (SPD) and the Free Democrats (FDP) has collapsed, and SDP Chancellor Olaf Scholz has dismissed FDP Finance Minister Christian Lindner.
Lindner had made calls for an early election, which precipitated his dismissal. But Scholz’s move follows a weeks-long stand off between the FDP and SDP over diametrically opposed economic policies. Last week, the FDP surprised its coalition partners by presenting a free-market, ideology-based budget proposal, which it claimed would pull Germany out of an economic downturn. The proposal went against the SDP’s fundamental economic policies.
Lindner is widely seen by the German public as a populist figure, whose headline-seeking behaviour has become increasingly provocative.
Chancellor Scholz will seek agreement in parliament for an early election, which is expected to take place by March 2025 at the latest.
Right-wing gains expected
However, Germany’s centre-right opposition is pushing for an immediate ‘vote of confidence’ and an immediate move towards elections, while Scholz is seeking to delay until January 2025. The centre-right Christian Democratic Union (CDU) could now be in a strong position in the upcoming German elections.
The centre-right Christian Social Union (CSU) and the far-right Alternative für Deutschland (AfD) are also pushing for early elections. The AfD’s popularity rating stands at 17%, ahead of the SPD.
Roots of division
The divisions in the coalition has its roots, at least in part, in economic policies. According to an article by Sabine Kinkartz in Deutsche Welle, the downfall of the coalition began almost a year ago when “the Federal Constitutional Court declared parts of the government’s budget policy unconstitutional. It deprived the coalition of a viable financial plan, then exposed the rifts between its partners.”
The plans which the court ruled unconstitutional related to the coalition’s strategy of reallocating money which had been earmarked to deal with the COVID-19 pandemic. The court instead ruled that the money should be allocated toward action on climate change. This ruling left a €60 billion hole in the coalition’s budget. Since the court’s decision, the three parties have been involved in partisan populism at the expense of their coalition partners.
However, the coalition has always been fragile. The Greens and SPD are centre-left parties whose policies depend on high government spending, while the FDP believes in a neo-liberal economic policy. The Greens and SPD were forced into forming a coalition with the FDP in 2021, after they failed to achieve a majority.
Kinkartz recounts the decline of the coalition in Deutsche Welle:
“The first deep rift in the coalition came when Finance Minister Lindner came forward in the media with the idea of granting drivers a discount on petrol and diesel to offset skyrocketing prices. The Green Party was caught off guard, reacted with anger to these proposals and made this clear in public,” Kinkartz writes.
“From then on, the tone changed and became increasingly harsh. Whether it was new legislation to switch heating systems in houses from fossil fuels to renewables, or the new citizen’s income, upholding the debt brake, modifying immigration laws— rivalries broke out over everything. Voters punished this with falling approval ratings and the coalition became the most unpopular government in the history of the Federal Republic of Germany,” she concluded.
This unpopularity was reflected in the three coalition partners’ poor performance in the September 2024 regional elections in eastern Germany.
