Germany’s ruling coalition is on the brink of collapse, triggering potential political chaos in Europe’s largest economy.
It means Chancellor Olaf Scholz and his Social Democratic Party (SDP) face heading a minority government after sacking his finance minister Christian Lindner from the pro-business Free Democrats Party (FDP).
Mr Scholz made the decision after weeks of disputes among Germany’s coalition partners over ways to boost the country’s ailing economy.
Added to that, the government’s popularity has been sinking while far-right and far-left forces have been surging.
He said Mr Lindner “has broken my trust too often”, and claimed he was focused on the short-term survival of his own party. “This kind of selfishness is utterly incomprehensible,” he added.
The three other FDP ministers – for transport, justice, and education – all voluntarily left the government.
“Olaf Scholz refuses to recognise that our country needs a new economic model,” Mr Lindner said. “Olaf Scholz has showed he doesn’t have the strength to give his country a new boost.”
Mr Lindner had rejected tax increases or changes to Germany’s strict self-imposed limits on running up debt.
Social Democrats and the Greens, who are also part of the coalition, want to see massive state investment. They had rejected proposals by the FDP to cut welfare programmes.
It leaves Mr Scholz relying on parliamentary majorities to pass legislation.
He plans to hold a confidence vote in his government on 15 January. The result could trigger snap elections by the end of March.
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Scholz said he would ask Friedrich Merz, leader of the conservative opposition CDU, who are far ahead in polls, for support in passing the budget and boosting military spending.
Mr Merz is due to respond to the request later on Thursday.
Across 2024, Germany’s economy is expected to shrink – or at best flatline – for the second year in a row.
The country has struggled under external shocks and home-grown problems, including red tape and a shortage of skilled labour.
