Scholz sets stage for German snap election as government collapses

BERLIN — Germany’s three-party ruling coalition collapsed on Wednesday evening after Chancellor Olaf Scholz announced he will fire Finance Minister Christian Lindner over persistent rifts on spending and economic reforms, a move that paves the way for a snap election within months.
The firing effectively ejects Lindner’s fiscally conservative Free Democratic Party  (FDP) from the troubled coalition, forcing Scholz to call for a confidence vote that he said would take place on January 15. If, as is likely, Scholz loses that vote, a snap election is set to take place by March.
The renewed political instability in Germany came just hours after Donald Trump’s clear win in the U.S. election, a result that stunned German political leaders, who depend on American military might for their country’s defense and fear Trump’s tariff policies will hobble German industry.
“Dear fellow citizens, I would have liked to have spared you this difficult decision, especially in times like these, when uncertainty is growing,” said Scholz in a statement at the chancellery.
But the rifts inside the coalition proved too great to overcome. Lindner and his FDP insisted that the German government stick to strict spending rules and cut taxes, even as his left-wing coalition partners wanted to maintain social spending and boost German industry through economic stimulus.
“All too often, Minister Lindner has blocked laws in an inappropriate manner,” said Scholz in a statement. “Too often he has engaged in petty party-political tactics. Too often he has broken my trust.”
Scholz said he had asked Linder to ease spending rules to allow more Ukraine aid, but Lindner refused, saying such a move would have “violated my oath of office.” Linder also attacked Scholz’s response to Germany’s economic weakness.
“Olaf Scholz has long failed to recognise the need for a new economic awakening in our country,” said Lindner in a statement. “He has long played down the economic concerns of our citizens.”
The FDP is the smallest party in the coalition and is now polling at only 4 percent — below the threshold needed to make it into the German parliament — meaning its leaders have been mulling a coalition break in order to save their political futures. By firing Lindner, Scholz appeared to be beating the FDP to the punch.
A snap election would likely usher in a new government led by the center-right Christian Democratic Union (CDU), which currently leads in polls by a wide margin. CDU leaders have taken a sharp turn to the right on migration in recent years, while also advocating for more robust military aid for Ukraine.
Central to the current coalition disagreements was the adoption of the 2025 budget by parliament — in which a gap of at least €2.4 billion, and potentially far more, needs to be filled — as well as an agreement on measures to revamp the country’s ailing economy.
Crisis talks in the coalition came to a head after Lindner issued a policy paper with demands for liberal economic reforms that were difficult for the other two parties to accept, calling for tax cuts and a scaling back of climate policies in order to stimulate economic growth — both positions that put the party at odds with its coalition partners.
Trump’s victory is expected to put heavy pressure on Europe’s largest economy. An analysis from the German Economic Institute (IW) estimates that a new trade war could cost Germany €180 billion over Trump’s four years in office.
Many in Germany had hoped that the victory of Trump in the U.S. election earlier in the day would force the coalition to hold together over fears that the incoming president would give Europe’s biggest economy a hard ride.
Ultimately, however, not even the looming threat of Trump proved enough for the fractious parties to put aside their differences.
“This evening feels wrong and not right,” said Robert Habeck, the Green economy minister. “Downright tragic on a day like this, when Germany has to show unity and the ability to act in Europe.”
This story is being updated.