EuropeAnalysis

Germany’s coalition stands on a knife edge after Olaf Scholz fires finance minister

Chancellor accuses FDP leader Christian Lindner of ‘egotism’, but will wait until January to call snap election

Germany's finance minister Christian Lindner addresses a press conference at the Reichstag building in Berlin on Wednesday. Photograph: John MacDougall/AFP via Getty Images
Germany's finance minister Christian Lindner addresses a press conference at the Reichstag building in Berlin on Wednesday. Photograph: John MacDougall/AFP via Getty Images
Derek Scally's picture
Derek Scally in Berlin
Wed Nov 06 2024 - 21:37

German chancellor Olaf Scholz has fired his liberal finance minister Christian Lindner, saying his “egotism” posed a danger for Germany.

After a three-year cohabitation, Mr Scholz said he had run out of patience with Mr Linder, leader of the liberal Free Democratic Party (FDP).

“Too often he blocked legislation with ideological demands, too often there was petty tactical manoeuvring,” he said. “There is no basis of trust for further co-operation on the serious work of government.”

The German leader has refused to seek an immediate snap election and will wait until January to table a confidence motion in his government. Until then he will seek co-operation with opposition parties on key economic and defence investment projects.

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The apparent end of the three-way “traffic light” coalition followed a day of crisis talks between Mr Scholz and his Social Democratic Party (SPD) and senior ministers from the Green Party and the liberal Free Democratic Party (FDP).

In a separate statement, Mr Lindner accused the chancellor of a “calculated coalition breach” and “not having the energy to give our country a new start”.

It follows a months-long standoff between Berlin’s three-way coalition over how to bridge a multibillion gap in the 2025 budget. Amid a continuing recession, Mr Lindner’s FDP-controlled finance ministry demanded austerity measures, tax cuts and an end to costly climate policies. The SPD backed Green proposals for debt-finance borrowing, stimulus measures and looser deficit rules.

[ Germany skirts recession, boosting euro zone economy ]

On Wednesday evening, Mr Scholz said he had presented a four-point plan along these lines to cut industry energy costs, invest in the crisis-hit car industry and boost defence spending for Ukraine.

He accused Mr Lindner of blocking these measures – requiring setting aside deficit rules for a further year – and pushing instead “clientelist” tax cuts for his wealthy voters.

“Such egotism is impossible to understand,” said Mr Scholz.

Green economic affairs minister Robert Habeck acknowledged that “in spring, Germany will have a new decision to make for a new government”.

The rupture laid bare, one last time, the fundamental ideological incompatibility of the three parties. For weeks, senior coalition officials admitted their respective ministers were no longer communicating, let alone governing.

Signals of a final break came early in the evening when the chancellor reportedly contacted Germany’s president, Frank-Walter Steinmeier. Any decision to end a coalition early in Germany requires the president’s blessing.

The coalition’s public squabbles have hit the three coalition parties badly in the polls. The SPD and Greens are down 10 and five points on their 2021 election results, respectively, while the FDP is fighting for its political life on 3 per cent support. If there were a snap election, the FDP would be likely to exit the next Bundestag.

Concentrating minds on Wednesday evening was a new survey spelling out the cost of breaking up the coalition prematurely.

It found that 29 per cent of Germans would blame Mr Lindner and his FDP for the coalition’s collapse, while the SPD and Greens would be seen as carrying significantly less responsibility.

Even if the government had lasted another 10 months to term, just 17 per cent of those polled thought the coalition would find solutions to cope with Germany’s growing economic difficulties.

Despite such numbers, political analysts said the tensions left the coalition parties with little realistic alternative but to limp on together.

“The situation shows that our FDP liberals no longer understand any pragmatism, but only complete economic dogmatism,” said Prof Klaus Schubert, political scientist at the University of Münster. “It all has a whiff of a tragic Wagner opera of heroic downfall.”