German chancellor Olaf Scholz is meeting his coalition partners for another round of talks on Tuesday, November 5th, to try to stop his government from falling apart.
Scholz of the Social Democrats, economy minister Robert Habeck of the Greens party, and finance minister Christian Lindner of the liberal FDP party, arrived at the chancellor’s office in the morning to discuss ways to defuse the tensions within the coalition.
The three parties have been bickering over next year’s budget, with Lindner proposing lower taxes, less bureaucracy, less spending overall, and the abandoning of the government’s ambitious climate targets, while Habeck’s plan envisages a new debt-financed fund to stimulate investments.
The FDP has been frustrated by recent severe defeats in regional elections, and the party could even miss out on re-entering the national parliament after next year’s federal elections, as polls suggest it currently has the support of just 4% of the electorate.
The fiscally conservative FDP has had to accept left-wing economic policies and a radical climate agenda forced through by its larger coalition partners, the Social Democrats and the Greens.
Christian Lindner issued an ultimatum to its coalition partners at the end of September, demanding a U-turn on economic and migration policies, hinting that he would be ready to quit the government unless his demands were met.
The debate around the budget has renewed the coalition infighting, and crisis talks between the parties started on Monday. They will continue for the next few days, as the budget has to be approved by the middle of November.
Following discussions on Monday, Green economy minister Robert Habeck told reporters he is willing to compromise and use €10 billion that had been set aside for climate policies to fill a hole in the budget—one of Lindner’s demands.
Habeck said:
The last few days have produced a cacophony rather than a united government line. The important thing is that if we don’t get the budget right, if the budget fails, then we will enter into a prolonged impasse in Germany at the worst possible time.
He cited the war in Ukraine, the dire economic situation in Germany, and the U.S. elections as reasons for the German government to try and stay together to maintain stability.
The support of all three parties has significantly eroded since they formed a government three years ago, due to their incompetent handling of the economy, the cost-of-living crisis, and the mass influx of migrants. The opposition centre-right CDU/CSU alliance is leading opinion polls with around 32% support, and the right-wing AfD is in second place with 18%.
The Social Democrats are polling at 16%, the Greens at 10%, and the FDP at 4%.
If the government were to collapse, early elections would be disastrous for all three parties, but the FDP could be hoping that its newfound toughness would impress its voter base. FDP general secretary Bijan Djir-Sarai has refused to rule out the coalition collapsing if FDP demands for spending cuts and a softening of climate regulations were not met.
Reacting to Robert Habeck’s compromise solution, state secretary in the Ministry of Finance, the FDP’s Katja Hessel, said on Tuesday that the debate will not be solved by simply filling the budget hole with €10 billion. “The decisive question now is how the economy can grow more strongly again in the future. The minister of economy must now propose how he wants to make Germany fit again as a business location without more debt or higher taxes.”
Chancellor Olaf Scholz has asked his governing partners to be ready to compromise, with a focus on helping the economy and jobs. “It’s about pragmatism, not ideology,” he posted on X. “Coalition governments are sometimes challenging. But the government has been elected and there are tasks that need to be solved. We need to work seriously to achieve this.”
The Greens are also warning against a break-up. As party leader Omid Nouripour said:
Volkswagen is going down the drain, there is an election in the U.S., Spain is suffering from massive flooding, and the Russians are breaking through one front after another in Ukraine. This requires a whole new level of seriousness and we are also demanding this from this coalition.
