As evidence of the split between the governing parties, the agency Reuters reports a summit of industry leaders announced by Scholz this month to save Germany’s moribund economy. A week later, Minister of Economic Affairs Robert Habeck (Greens) presented his proposals for saving the economy, and after that, another business summit was announced by Minister of Finance Christian Lindner (FDP). The Scholz and Lindner summits both take place on Tuesday.
None of the announcements were coordinated in advance with other coalition members or mutually approved. This suggests that the election campaign has already begun for the coalition parties ahead of the parliamentary elections to be held in Germany next year. It follows from the statements of the representatives of the individual parties and the government administration that the risk of the collapse of the coalition is greater than ever before.
The FDP, which ideologically stands on free market ideas, is particularly desperate. The party is now hovering below the five percent mark in the polls and is in danger of not making it to parliament next year at all. According to sources from within the party, party leaders have been deciding for weeks whether he will help his prospects rather by remaining in the government or, on the contrary, by leaving it.
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The rank and file members are more likely to leave. Party leader Lindner is against it so far, but the pressure on him is growing. “Everything depends on Lindner,” summed up one of the government officials on condition of anonymity.
Until recently, the bad election results of the coalition parties were considered by analysts to be a discouraging factor that rather prevented the collapse of the government. It was thought that the ruling parties might be worried that voters might punish them for abdicating responsibility at a critical time when war is raging in Europe and the Middle East.
However, the coalition is becoming less and less popular, and breaking it up could now gain votes for the FDP, political scientist Stefan Marschall from the University of Düsseldorf assessed.
Definitely the budget
The German government coalition was already creaking at the beginning of the current election period, but in the end it was united by the threat posed by the Russian invasion of Ukraine and the subsequent energy crisis related to it. Now, however, the differences between the fiscally strict FDP and its more spendthrift partners are coming to the surface again.
The German economy is weakening – according to forecasts, it will be so for the second year already, which represents a key test for the coalition. Whether it will continue to be able to cooperate will probably reveal the budget for 2025 and whether the coalition parties will be able to push it through. The Budget Committee will meet on November 14. According to Lindner, the budget is now counting on a deficit of 13.5 billion euros (342.5 billion crowns).
“Ahead of that key meeting, the government must come to a common understanding on the next steps in economic and financial policy, even with regard to the recent tax estimates. The following weeks will be decisive,” said an anonymous Reuters source.
Can SPD do it alone?
Analysts say the most likely scenario remains that the coalition will hold together until elections scheduled for September 28 in the hope that its measures will begin to bear desired fruit and because of Germany’s penchant for stability. However, a government source from the FDP said that this would probably require another round of negotiations between Scholz, Habeck and Lindner. “The mood is not good at all, there is no more confidence,” he testified.
The new general secretary of Scholz’s SPD, Matthias Miersch, has already raised the possibility that in the event of the departure of one of the coalition partners, a minority government could serve out the term of office. “If the budget was approved on time, it wouldn’t be a problem,” said Miersch.
However, given the coalition’s low popularity, a minority government would likely be unable to withstand pressure to call early elections. In that case, Scholz would have to put a vote of no confidence in the government and President Frank-Walter Steinmeier could then dissolve the parliament.
Trump could save them
Just as the coalition was united two years ago by the invasion of Ukraine by Russian forces, so a foreign event could consolidate it now. Specifically, this could be the case if Republican candidate Donald Trump wins the US presidential election next week. The latter threatens to impose high tariffs on imports and condition the support of other NATO members.
“The world’s third largest economy cannot risk being without leadership at a time like this. Everyone knows that, even Lindner,” said a government official.
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