German coalition govt. collapses amid bickering over aid to Ukraine

Germany’s coalition government has collapsed after Chancellor Olaf Scholz relieved Christian Lindner of his duties as the Federal Minister of Finance over persistent divisions on spending and economic reforms.

In an unexpected move on Wednesday night, Scholz said in a televised address to the nation that he had dismissed Lindner and that a confidence vote in the government is scheduled for January 15.

If he loses the vote - which he is most likely to do - snap elections have to be held by late March, six months ahead of schedule.

The dismissal came amid rifts among the leaders of  the troubled three-party coalition - Scholz’s Social Democrats (SPD), the Greens and Lindner’s fiscally conservative Free Democratic Party (FDP).

For weeks, they have bickered over how to address a €9 billion gap in the 2025 federal budget and the steps required to handle Germany’s economic downturn.

“All too often, Minister Lindner has blocked laws in an inappropriate manner. Too often he has engaged in petty party-political tactics. Too often he has broken my trust,” said Scholz in his statement.

Scholz said he had requested Lindner to relax spending restrictions to increase aid for Ukraine, but he had declined, arguing that doing so would have “violated my oath of office.”

“We need to invest considerably more in our defense and in the Bundeswehr, especially now, after the outcome of the US elections,” the German chancellor further said.

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Lindner blasted Scholz’s approach to addressing Germany’s economic challenges.

“Olaf Scholz has long failed to recognize the need for a new economic awakening in our country. He has long played down the economic concerns of our citizens,” said a clearly fuming Lindner in a statement released after Scholz’s address.

Within hours of Lindner’s dismissal, the pro-business FDP pulled its remaining ministers from the cabinet, marking the collapse of the struggling and unpopular three-party coalition.

The pro-business party currently stands at about four percent in the polls - below the threshold needed to gain a place in parliament.

Scholz and Lindner separately met with industry groups, released opposing policy papers, and held differing opinions on addressing high energy costs and infrastructure issues.

The government of Europe’s largest economy fell apart just as the European Union is trying hard to coordinate a unified response to the return of Donald Trump after as he emerged victorious in the US presidential election.

The fallout is likely to thrust Germany into a persisting phase of uncertainty.

A poll by Forsa released on Wednesday revealed that 82 percent of Germans lacked confidence in the government’s ability to resolve Germany’s economic crisis before the federal election, originally set for next September.

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