Germany's ruling coalition collapses

[Occam's Banana]

Germany’s Coalition Collapses, Leaving the Government Teetering
After months of disputes, Chancellor Olaf Scholz ousted one of his governing partners, adding to the challenges for Europe since Donald Trump’s election.
https://www.nytimes.com/2024/11/06/world/europe/germany-coalition-collapse-government.html
[archive: https://archive.ph/zHYWZ]
{Christopher F. Schuetze | 06 November 2024}

Chancellor Olaf Scholz fired his finance minister on Wednesday, effectively ending his three-party ruling coalition and destabilizing his center-left government just as the election of Donald J. Trump in the United States presented Europe with new economic and security challenges.

“I would have liked to have spared you this difficult decision,” said Mr. Scholz during an impromptu news conference in the chancellery on Wednesday evening after several days of talks aimed at salvaging the coalition. “Especially in times like these, when uncertainty is growing,” he added.

Mr. Scholz vowed to keep governing until the end of the year and then to demand a confidence vote in Parliament in January, a test he may fail. That would open the way for early elections, a rarity in Germany since World War II, possibly in March.

The extraordinary trouble in Berlin leaves the European Union evermore rudderless at a particularly difficult time. France’s government is in a crisis after elections there this year yielded a deadlocked Parliament, and Russia has made important advances on the battlefield in Ukraine and continues to threaten Europe broadly.

Now Europe faces the possibility of a trade war with the United States and a weakening of the NATO alliance — both of which Mr. Trump has threatened — as Germany, its most populous country, becomes mired in political instability as well.

The collapse of the coalition in Germany came after the leaders of the three parties — Mr. Scholz’s Social Democrats, the left-leaning Greens and the pro-business Free Democrats — had mostly stopped talking to each other in recent weeks over widening disputes in negotiations for a new federal budget.

On Wednesday night the resentment between Mr. Scholz and Christian Lindner, the leader of the Free Democrats and his finance minister, who spoke with reporters 30 minutes after the chancellor, was on clear display.

“Olaf Scholz has sadly shown that he does not have the strength to give our country a new start,” said Mr. Lindner, who called Mr. Scholz’s suggestions to promote economic growth “dull and unambitious.”

Mr. Scholz told reporters that Mr. Lindner had acted irresponsibly for not being willing to compromise.

The coalition, which has governed Germany since the former chancellor, Angela Merkel, left office in 2021, was an uneasy set of political bedfellows from the start. It was the first three-party coalition since the early 1960s, one of the reasons, many in the government say, for its instability, frequent leaks and paralysis.

The coalition’s collapse is stunning for a country long known for plodding and predictable consensus that avoided the political gyrations of some of its more volatile European partners. It may signal a new era of political instability for Germany, as populist parties on the far right and far left gain more popularity on a fracturing political landscape.

Speculation about a collapse of the coalition had grown since last week after Mr. Lindner wrote a position paper, leaked to the news media, that challenged the progressive fiscal policies of his two left-of-center coalition partners.

Many of his proposals, like the end to national climate policies or cuts to social services, appeared designed to antagonize them. Experts saw the paper as Mr. Lindner’s attempt to get himself pushed out of the coalition without having to leave it himself. The opposition, which has been calling for an end to the coalition, called it the “divorce document.”

Mr. Scholz and Robert Habeck, Germany’s economy minister and member of the Greens party, had initially tried to hold the coalition together. Calling for “pragmatism” in a post on social media on Monday, Mr. Scholz continued: “Coalition governments can sometimes be challenging. But the government is elected, and there are issues that need to be resolved.”

At the heart of the dispute was a roughly 10 billion euro, or $10.7 billion, hole in the 2025 budget.

On Monday Mr. Habeck sought to keep Mr. Lindner in the government by offering him several billion euros earmarked as a subsidy for a planned Intel factory to help balance the budget. “This is the worst time for the government to fail,” he told reporters then.

On Wednesday, Mr. Habeck called the firing “as logical as it is unnecessary,” saying that many offers were on the table to meet Mr. Lindner’s economic demands.

On Wednesday, Mr. Scholz announced that his Social Democrats would govern with the Green Party as a minority government until at least the end of the year. They will need to secure parliamentary majorities on a case-by-case to pass any laws.

On some issues — notably aid to Ukraine, rebuilding the military and cracking down on immigration — they might be able to count on the support of the opposition Christian Democrats, who have similar views on them.

“Germany is Europe’s biggest economy and the biggest contributor to the E.U. budget; they need to have certainty,” said Sudha David-Wilp, the Berlin-based regional director of the German Marshall Fund, a think tank. “And a minority government means instability for the country and its partners in Europe,” she added.

Ultimately such an arrangement can only work with the tacit support of the conservative Christian Democratic Union, or C.D.U., the biggest opposition party that is leading opinion polls to win the next election.

“We cannot afford this unstable government a single day longer,” Carsten Linnemann, the party’s secretary general, told the German tabloid Bild earlier this week.

The Scholz coalition had billed itself as a restart from the sleepy Merkel years. The partners successfully managed pressing problems early in its term after Russia invaded Ukraine in 2022 and Germany stopped importing Russian gas.

But a ruling by the country’s highest court in 2023 forced the government to make drastic cuts in the budget, leading to strife among the partners over the limit on borrowing that is anchored into the constitution.

The final break comes against the backdrop of a stagnant German economy, which is expected to contract by 0.2 percent in 2024, the second year in a row that Germany has stagnated. The country is the weakest member of the Group of 7 and among nations using the euro currency.

In a sign of deepening woes, Volkswagen, Germany’s largest industrial employer, is threatening major job cuts and factory closures as it struggles to return its flagship brand to profitability.

With Mr. Lindner’s insistence on economic reforms and his exit from the government, he appears to have picked the timing of his election campaign.

His Free Democratic Party has been struggling to break 5 percent support in the polls, the threshold for entering Parliament. Leaving the government on a principled stance could allow Mr. Lindner to pick up voter support for the next election whenever it is held.

 

[Occam's Banana]

What the Collapse of Germany’s Ruling Coalition Means
After decades of relative stability, the country has entered a new era of political fragmentation and will hold new elections at a precarious time.
https://www.nytimes.com/2024/11/07/world/europe/germany-coalition-collapse-explained.html
[archive: https://archive.ph/LYxQe]
{Christopher F. Schuetze | 07 November 2024}

The collapse of its governing coalition is an extraordinary moment for Germany, a country known for stable governments. It has happened only twice before in the 75 years since the modern state was founded.

But like a marriage that has finally ended after years of fighting, the spectacular breakup on Wednesday night [see this post - OB] of Chancellor Olaf Scholz’s three-party coalition was expected by most and welcomed by many.

A recent national poll found that a majority of Germans wanted to end the “traffic light” coalition, named for the colors of the parties that made it up — red for the Social Democratic Party, yellow for the pro-business Free Democratic Party and green for the Greens. Only 14 percent still had confidence in the coalition, according to the same poll.

Although the opposition is pushing for Mr. Scholz to end the government sooner, Wednesday’s announcement will very likely lead to early elections in March, at a precarious time for Germany both domestically and internationally.

Here’s what we know about the collapse of the coalition.

How did we get here?

On Wednesday night, Mr. Scholz fired his finance minister, Christian Lindner, who is the head of the Free Democrats, over disagreements about the 2025 budget and the economy in general. That precipitated the end of the coalition.

The coalition was initially both successful and popular. But a constitutional court ruling late in 2023, barring the government from repurposing finances left over from the pandemic, spelled the beginning of the end.

Whereas the two progressive partners wanted to spend government money to kick-start the economy and carry out their agenda, the Free Democrats insisted on strict adherence to what’s known as the Black Zero, a debt ceiling enshrined in constitutional law that prevents borrowing large sums unless there is an emergency.

The German economy worsened and the government’s poll ratings tanked, leading to more infighting. Paralyzing disputes became the norm, carried out very publicly through debilitating leaks in the news media, which made the coalition ever less stable and popular.

What happens now?

The collapse of the coalition does not, for the moment, mean the collapse of the government. Mr. Scholz will continue to be chancellor, now in a minority government, until the end of the year.

He promised to call a confidence vote in Parliament on Jan. 15. He will almost certainly lose the vote — without the Free Democrats he no longer has the support of the majority of lawmakers — and when he does he will ask the president to disband the government and set a date for a new election.

The new election has to take place within 60 days, during which Mr. Scholz is likely to remain chancellor of a caretaker government.

Given the time needed for parties to campaign, the most likely Election Day is toward the end of the 60 days: March 9. That would still be more than six months early. Elections were already scheduled for next year, but not until Sept. 26.

In the meantime, the Social Democrats and the Greens will hobble on, but will have to convince opposition parties to vote for their bills on a case-by-case basis.

On important issues like supporting Ukraine, strengthening the military and cracking down on irregular migration, the opposition and the government are united. So German policy is likely to remain the same.

As for next year’s budget, it faces a final hurdle next week — one it’s unlikely to pass. But unlike the United States, where a blocked budget leads to a government shutdown, in Germany, regular spending continues and no government employee has to go without a paycheck.

What are the risks?

The collapse of the coalition signals a new era of instability in German politics.

It was a measure of Germany’s fracturing political landscape that the coalition was the first requiring three parties since the 1960s. Since it came to power in 2021 after years of relative stability under former Chancellor Angela Merkel, that fracturing has only accelerated.

It is too soon to tell if President Trump’s convincing win in the United States could boost Germany’s far-right party, the Alternative for Germany.

In closely watched state elections in September, parties on both the far right and far left had their best showings ever. But mainstream parties still consider them anathema, which has made it hard to form governing coalitions in those states.

Those results could portend equally messy coalition haggling in Berlin after a national vote, although the political fringes are less popular nationally than they are in the eastern states that just voted.

Even before Germans get there, opposition parties are pushing for the election sooner, arguing that delaying the vote even until March will leave Germany adrift at a critical time when Mr. Trump takes office, the economy is stagnating and the war in Ukraine continues.

Mr. Scholz is unlikely to do that, however, hoping that the electoral prospects of his Social Democrats improve in the meantime. Recent polling puts them at 16 percent, and they look very unlikely to reach the nearly 26 percent they got in 2021, at the last federal elections.

But Mr. Scholz said on Wednesday that Germany needed clarity on its political future.