NEWS

Chancellor Olaf Scholz claimed Christian Lindner had broken his trust and dismissed him as finance minister. It increases the prospect of snap elections.

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Germany’s ruling coalition is on the brink of collapse, triggering potential political chaos in Europe’s largest economy.

It means Chancellor Olaf Scholz and his Social Democratic Party (SDP) face heading a minority government after sacking his finance minister Christian Lindner from the pro-business Free Democrats Party (FDP).

Mr Scholz made the decision after weeks of disputes among Germany’s coalition partners over ways to boost the country’s ailing economy.

Added to that, the government’s popularity has been sinking while far-right and far-left forces have been surging.

He said Mr Lindner “has broken my trust too often”, and claimed he was focused on the short-term survival of his own party. “This kind of selfishness is utterly incomprehensible,” he added.

The three other FDP ministers – for transport, justice, and education – all voluntarily left the government.

“Olaf Scholz refuses to recognise that our country needs a new economic model,” Mr Lindner said. “Olaf Scholz has showed he doesn’t have the strength to give his country a new boost.”

Mr Lindner had rejected tax increases or changes to Germany’s strict self-imposed limits on running up debt.

Social Democrats and the Greens, who are also part of the coalition, want to see massive state investment. They had rejected proposals by the FDP to cut welfare programmes.

It’s not if, but when, the coalition collapses

Siobhan Robbins

Europe correspondent

@SiobhanRobbins

The German Chancellor is a controlled man, so the uncharacteristic anger on display as he announced he had sacked his finance minister and fixed a vote of confidence for January was telling.

The fractures in Germany’s coalition government have been widening for months.

The ailing economy, dismal showing in the European parliamentary elections and rise of the far-right Alternative for Germany party (AfD) have led to growing questions about when the coalition will collapse, rather than if it will.

Germany’s general election is currently pencilled in for September 2025 but if Olaf Scholz loses the confidence vote on 15 January, then a snap election is likely to take place by the end of March.

Current polls put the party of the former Chancellor Angela Merkel, the Christian Democratic Union (CDU), in the lead followed by the AfD.

Using today’s numbers, the most likely scenario would be another coalition government potentially with the CDU, the social democrats and maybe even the Greens.

But all this is jumping ahead.

The hammer blow to the German government coalition on the day Donald Trump was re-elected is a coincidence but it’s also very bad timing.

The return of Trump raises questions around NATO, the war in Ukraine and possible trade wars in the future.

Europe now more than ever needs to be united; a task made more difficult when the leadership of its largest economic power is in crisis.

It leaves Mr Scholz relying on parliamentary majorities to pass legislation.

He plans to hold a confidence vote in his government on 15 January. The result could trigger snap elections by the end of March.

Scholz said he would ask Friedrich Merz, leader of the conservative opposition CDU, who are far ahead in polls, for support in passing the budget and boosting military spending.

Mr Merz is due to respond to the request later on Thursday.

Across 2024, Germany’s economy is expected to shrink – or at best flatline – for the second year in a row.

The country has struggled under external shocks and home-grown problems, including red tape and a shortage of skilled labour.