The left-liberal German government could be on the verge of falling apart as the discussion about next year’s budget between the three coalition partners has turned into a dispute about major policy disagreements.
Chancellor Olaf Scholz of the Social Democrats held a closed-door discussion on Monday, November 4th, with the leader of the liberal FDP party, Christian Lindner, and Vice Chancellor Robert Habeck of the Greens party.
According to German media reports, the meeting can be described as crisis talks—a bid to diffuse the tension between the coalition partners who have been bickering over next year’s budget for the past few days.
Lindner, who is also the finance minister, drafted a budget plan that focuses on lower taxes, less bureaucracy, less spending overall, and the abandoning of the government’s ambitious climate targets. “Economic development cannot remain as it is,” Lindner said in an interview on Sunday.
The fiscally conservative FDP, the smallest party in the government, has been the odd man out in the coalition, which has been dominated by left-wing policies for the past three years.
The party is known to be conservative on issues such as migration, the economy, and the budget, and has criticised its coalition partners for espousing radical climate policies, e.g., dismantling nuclear power plants too quickly.
The FDP’s participation in the coalition has forced the party to agree to leftist positions, thereby losing the trust of its voters. The most recent example is the adoption of the so-called ‘self-determination law’ which allows individuals in Germany to change their gender and name annually with very few restrictions.
The party suffered heavily in recent elections in the eastern states of Saxony, Thuringia, and Brandenburg, receiving 0.89%, 1.12%, and 0.83% of the votes respectively. In nationwide surveys, the FDP is polling at less than 4%, meaning it would drop out of the federal parliament, the Bundestag, for only the second time in its history following next autumn’s elections.
At the end of September, following his party’s disastrous results, Christian Lindner issued an ultimatum to his coalition partners in the federal government: change course on migration and the economy or the FDP would quit the government, necessitating early elections.
Lindner’s budget proposal was leaked to the press on Friday, November 1st, meaning someone—either the FDP or the two other coalition partners—wanted it to be known that there are major disputes within the government.
The Greens’ Robert Habeck, who is the economy and climate minister, had proposed a separate budget plan only a few days prior to Lindner’s being leaked. Habeck wants the creation of a fund to stimulate investment and to get around Germany’s strict fiscal spending rules.
Chancellor Scholz and the ministers will hold several meetings in the coming days to try and agree on a budget that has to be approved by the middle of November. The Social Democrats do not want to back down on social issues, while the Greens are trying to salvage their environmental agenda.
All three parties have suffered major losses in recent regional elections as concerns about migration, the Ukraine war, and the cost-of-living crisis have not been competently handled according to the voters, who are now looking to the centre-right CDU and the right-wing AfD party as viable alternatives.
The coalition parties’ attempts at forcing through their own agendas, disregarding the will of their partners, seem like a last-ditch campaign to save face before the elections next year.
“Germany has lost a lot of its competitiveness. In the global rankings, the country has dropped from 6th to 24th place. But there is great disagreement about how the economy could be brought back on track,” writes the Swiss conservative weekly Die Weltwoche.
The opposition parties called for early elections on Sunday, with CDU parliamentary group leader Thorsten Frei saying this “would be the last service [the government] could render to our country.” AfD co-leader Alice Weidel said Germany needs “a government that can stop the economic collapse of our country.”
If one of the three governing parties pulls out of the coalition, the chancellor can call for a parliamentary confidence vote, which if lost would allow the president to trigger elections.
