Sabine Kinkartz

Representatives of the three parties making up Germany’s centre-left government — the Social Democrats (SPD), neo-liberal Free Democrats (FDP) and Greens — met for a crisis meeting on Wednesday evening. It lasted only two hours.

The coalition partners no longer had much to say to each other. Finance minister Christian Lindner (FDP) proposed early elections, Chancellor Olaf Scholz refused, and dismissed Lindner from office. Scholz addressed the media at 21h15 on Wednesday.

This was the day on which the first three-party alliance in the history of the Federal Republic of Germany spiralled out of control, and could no longer stabilise itself.

The long way down

The demise began on 15 November 2023, when the Federal Constitutional Court declared parts of the government’s budget policy unconstitutional. It deprived the coalition of a viable financial plan, then exposed the rifts between its partners.

Germany’s highest court ruled against the government’s plans to reallocate money earmarked but never spent from a cache of debt taken out to mitigate the fallout of the Covid-19 pandemic. The money was instead earmarked for the government’s climate action budget. The court ruling left the budget €60 billion (US$65 billion) short.

Since then, the coalition partners have been trying to raise their own profile at the expense of the others, publicising proposals before even discussing them with Cabinet colleagues.

A bad fit from start

However, the three parties’ basic political convictions did not fit together in the first place. The SPD and Greens are essentially centre-left parties which believe in a strong state, and require a lot of money for social policy and climate protection.

The economically-liberal FDP is of the opposite opinion: It believes in a lean state which should only intervene in exceptional cases, and exercise financial restraint. During the election campaign, the party promised to balance the budget, and comply with the debt brake enshrined in Germany’s constitution.

Reallocating the Covid-19 fund made it possible to overcome those differences and agree on a financial plan for the coalition, as it made it possible to save money in the budget, and still spend money on red-green social and climate policy.

The plans were grand. Germany was to become a pioneer in climate protection, and 400,000 new homes were to be built each year. The welfare state was to be modernised, support for the unemployed was to be reformed into citizen’s income, and basic child protection and old-age pensions were supposed to be financed in part through investments in the stock market to stabilise the pension level, the minimum wage was to be increased, as was spending on research and development.

The alliance worked well at first, the leaders of the Greens, Annalena Baerbock and Robert Habeck, FDP leader Christian Lindner and his secretary general Volker Wissing posted cheerful selfies on social media a few days after the federal election in September 2021. “In the search for a new government, we are exploring common ground and bridging divides. And even find some. Exciting times,” the caption read.

The Greens and the FDP, however, are diametrically opposed on fundamental beliefs. The Greens’ preferred partner was the SPD, but the two parties did not win a parliamentary majority in 2021, so they needed the FDP. The FDP was able to act with the self-confidence of the indispensable.

The intentions were good. At the presentation of the coalition agreement, it was said the negotiations with such different perspectives and schools of thought had been “enriching”, and that “opposites can complement each other.”

The tone got rougher, the crises multiplied. The promise to uphold confidentiality and to go public only with solutions to problems, not the bickering that went before, did not last 100 days.

However, no government had ever faced such massive challenges before. The Covid-19 pandemic dragged on, Russia invaded Ukraine, gas and oil supplies failed, and Germany slipped into an energy crisis.

The first deep rift in the coalition came when finance minister Lindner came forward in the media with the idea of granting drivers a discount on petrol and diesel to offset skyrocketing prices. The Green Party was caught off-guard, reacted with anger to these proposals, and made this clear in public.

From then on, the tone changed, and became increasingly harsh. Whether it was new legislation to switch heating systems in houses from fossil fuels to renewables, or the new citizen’s income, upholding the debt brake, modifying immigration laws – rivalries broke out over everything. Voters punished this with falling approval ratings, and the coalition became the most unpopular government in the history of the Federal Republic of Germany.

The draft budget for 2025 was submitted to the lower house of parliament, the Bundestag, with a gap of around €12 billion.

Then, regional elections were held in eastern Germany in September 2024. The results were a disaster. Never before had parties which govern at the federal level performed so poorly at the state level as the SPD, Greens and FDP in Thuringia and Saxony. The FDP failed to even make it into any of the state parliaments.

No compromise

After those elections, FDP leader Lindner issued an ultimatum, and called for an “autumn of decisions.” He insisted that even controversial legislative projects had to be brought forward quickly. The mood became catastrophic. SPD co-leader Saskia Esken accused FDP politicians of being deliberately provocative because they were “desperately” trying to make a name for themselves. She derided Lindner personally: “This juggling with dates and ultimatums is an expression of a gambler’s nature”.

In October, Lindner went one better, and formulated a list of demands in which he practically denounced the coalition’s entire economic and financial policy. The SPD and Greens spoke of a provocation, and already suspected at this point that Lindner was trying to get the Chancellor to dismiss him.

In January, the Chancellor wants to put the so-called vote of confidence to the Bundestag, and allow a decision on an early election. The Bundestag is to vote on this on 15 January. 

The election could then take place by the end of March at the latest, in compliance with the deadlines set out in the Basic Law. The regular Bundestag election had been scheduled for September 2025.

-DW