Germany’s coalition collapses dramatically. Chancellor Olaf Scholz wants to lead with a minority government

BERLIN (AP) – After the dramatic failure of the German government coalition under Chancellor Olaf Scholz Fired Finance Minister Christian Lindner Scholz, one of the pro-business Free Democrats, said he would lead the country with a minority government, despite opposition leaders calling for early elections on Thursday.

The chancellor said the minority government would consist of his Social Democrats and the Greens until early next year – although the leader of the largest opposition bloc in parliament, Friedrich Merz of the center-right Christian Democrats, called for an immediate no. Vote of confidence and new elections.

Scholz emphasized again on Thursday that he did not want to hold the vote of confidence before January 15th.

“Citizens will soon have the opportunity to decide how to proceed,” said the Chancellor, according to the German press agency dpa. “That is their right. I will therefore express my confidence in the Bundestag at the beginning of next year.”

A meeting with Merz and Scholz on Thursday afternoon in the Chancellery about a possible date for the next election ended after less than an hour when Merz left the conversation without commenting on the talks.

Later on Thursday, President Frank-Walter Steinmeier presented sacked Finance Minister Lindner and two other resigned Free Democrats officials – Research Minister Bettina Stark-Watzinger and Justice Minister Marco Buschmann – with their dismissal certificates.

Transport Minister Volker Wissing, who also belongs to the Free Democrats, said that after discussions with Scholz he decided to stay in office and instead leave the party. Scholz asked him to include the Ministry of Justice in his department.

Steinmeier also appointed Jörg Kukies, an economic adviser to Scholz, as finance minister. Agriculture Minister Cem Özdemir of the Green Party agreed to take over the research ministry.

Scholz announced late Wednesday that he would seek a confidence vote on January 15, which he said could lead to an early election, perhaps as early as March. The vote would otherwise have been scheduled for next September.

After the dismissal of his finance minister, the Chancellor accused Lindner of a breach of trust and publicly called for a fundamentally different economic policy, including, according to Scholz, billions in tax cuts for some top earners while simultaneously cutting pensions for all pensioners.

“That’s not decent,” said Scholz.

The Chancellor hopes that his minority government – Scholz’s left-wing Social Democrats with the remaining coalition partner, the environmentalists – Greens – will receive the support of Merz’s Christian Democrats in parliament in the coming weeks to pass important laws and close the billion-dollar hole in the 2025 budget.

However, on Thursday Merz vehemently rejected Scholz’s plan to wait until January to raise the vote of confidence.

“The coalition no longer has a majority in the German Bundestag, and we therefore call on the Chancellor … to carry out a vote of confidence immediately, but at the latest at the beginning of next week,” said Merz.

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

Since Scholz’s government no longer has a majority in parliament, he would probably lose the vote. In this scenario, the German president could dissolve parliament within 21 days and early elections could then take place in January.

“We will have enough time in these 21 days to find out whether there are issues that we may have to decide on together,” said Merz and offered his party to work with the minority government. “We are of course ready to hold talks… we are also ready to take responsibility for our country.”

Achim Wambach from the Leibniz Center for European Economic Research doubted that a longer period of minority government would help the German economy get back on track.

“Germany’s problems are too big to tolerate a political standstill,” said the analyst.

“The government has set itself the goal of reconciling the transformation to climate neutrality with economic growth and social security,” added Wambach. “It did not live up to this claim. The economy is stagnating and there is no investment.”

“This monumental task has been exacerbated by geoeconomic tensions: wars in Europe and the Middle East, as well as economically damaging interventions through tariffs and national subsidy policies,” he added. “ The election of Donald Trump has exacerbated these problems. Europe must do more for its security and must expect higher tariffs.”

The collapse of the coalition came after weeks of conflict among the coalition partners about ways to stimulate the country’s struggling economy.

Lindner’s business-friendly Free Democrats had rejected tax increases or changes to Germany’s strict debt limits. Scholz’s Social Democrats and the Greens wanted to see major government investments and rejected the Free Democrats’ proposals to cut social programs.