German Chancellor Olaf Scholz fired Finance Minister Christian Lindner yesterday, collapsing his three-party governing coalition. He also announced that he would submit to a vote of confidence on Jan. 15 that he is widely expected to lose, paving the way for early federal elections, likely in March. (Washington Post)
Our Take
This collapse has been a long time coming. There have been tensions within Germany’s Ampelkoalition, or traffic light coalition—a reference to the three parties’ colors—essentially since it took power in 2021.
The latest sticking point, which ultimately led to the collapse, has been negotiations over next year’s budget, which currently faces large gaps. Scholz’s Social Democrats, or SPD, and the Greens favor relaxing the country’s “debt brake”—which limits the country’s public deficit and is enshrined in the constitution—in order to fund more public investment and aid to Ukraine. But the market-friendly Free Democrats, of which Lindner is the party leader, ardently opposed such a move.