The year 2024 has become a pivotal moment marked by political crises and economic challenges in Germany. The government, known as the “Traffic Light Coalition,” is effectively in a state of collapse. The downfall of the coalition became clear when Chancellor Olaf Scholz removed Christian Lindner, the Finance Minister from the Free Democratic Party (FDP), from his position and subsequently called for a vote of confidence.
The government can no longer secure a majority in parliament, and Scholz[1] will continue in office as a minority government until the confidence vote scheduled for January. If he loses the vote, early elections will be held in Germany. The early elections, expected in February 2025, are seen as a harbinger of significant changes in German politics.
The collapse of Chancellor Olaf Scholz’s three-party coalition government has reopened discussions on both the domestic political dynamics within the country and Germany’s international role as the largest economy in the EU. This situation will not only trigger a search for new leadership but also lead to a process of redefining Germany’s domestic and foreign policy priorities.
Scholz’s “Traffic Light Coalition” formed with the Social Democrats, Greens, and Free Democrats, initially set out with a promise of modernization.[2]However, deep disagreements over economic policies have exposed the fragile nature of the coalition. While there have been some successes in responding to the energy crisis and implementing social reforms, economic stagnation, rising debt restrictions, and proposals to cut social benefits have hindered the search for a common path forward.
The dissolution of the coalition was largely due to the inability to reconcile differing economic approaches. While Scholz advocated for borrowing to fund energy transition, welfare policies, and geopolitical responsibilities, Lindner’s Free Democratic Party insisted on fiscal discipline and tax cuts. This impasse paralyzed the government, increasing public dissatisfaction.[3]
Chancellor Olaf Scholz’s dismissal of Finance Minister Christian Lindner marks the peak of disagreements over budget discussions and the coalition’s core policy priorities. Additionally, external threats such as potential tariffs from the United States and competition with China further complicate Germany’s export-driven economy.[4] In light of economic stagnation, rising populism, and shifting international dynamics, the risks and responsibilities for Germany’s new leadership are becoming increasingly significant.
While Scholz is not expected to secure the confidence vote, Friedrich Merz, leader of the Christian Democrats, appears to be a strong candidate for Chancellor in the upcoming early elections.[5] However, the far-right Alternative for Germany (AfD) party is also gaining attention in the race. Particularly in the eastern states, their rising popularity, anti-government rhetoric, and anti-immigrant policies suggest that the AfD could significantly increase its vote share compared to previous elections.[6]This could accelerate the fragmentation of the political center in Germany and weaken the country’s democratic stance in Europe.
Germany’s political uncertainty could have repercussions not only within the country but also across Europe. The rise of the far-right could threaten solidarity within the EU, and Germany’s military support for Ukraine and its leadership in EU policies may come under scrutiny. Additionally, the collapse of the Scholz government could lead to a loss of trust in environmental parties like the Greens, weakening the focus on global climate goals. In this context, the political structure that emerges after Germany’s early elections has the potential to be a turning point, not only for the country but for all of Europe.
In this period, where polls show a lead for Friedrich Merz and the far-right AfD is gaining support, the elections could fundamentally alter Germany’s political landscape. However, a fragmented government structure and the ongoing process of complex coalition negotiations remain. A government under Merz’s leadership could likely form a grand coalition with the Social Democratic Party. In the process of economic recovery and defining Europe’s role on the global stage, this uncertainty calls for decisive leadership.[7]
Experts suggest that this situation was inevitable for Germany, but the timing has been unfortunate for the EU. The potential re-election of Trump highlights the need for Europe to strengthen its security and defense policies. The political turmoil in Germany coinciding with Trump’s possible return to office has created greater strategic concerns in Europe. As the US is likely to pursue a more inward-focused policy, the leadership vacuum in Germany could create significant vulnerabilities in Europe’s security and economic policies. Furthermore, this crisis, occurring during a time of rising populist movements and far-right factions, could pose an even greater threat to Europe’s unity and resilience.
In conclusion, the collapse of Germany’s three-party coalition has become a critical development affecting both domestic and European political and economic stability. The downfall of the “Traffic Light Coalition” is pushing Germany toward early elections, marking a significant period that will reshape the country’s political direction. Chancellor Olaf Scholz’s dismissal of the finance minister following a crisis of confidence within the government has brought an end to the coalition and raised the prospect of early elections. This situation has left Germany facing a leadership vacuum, creating serious uncertainty regarding both the unity and resilience of Europe.
The main conflict within the coalition stemmed from the 2025 budget and fiscal discipline. Scholz’s policy of relaxing the debt brake rule to increase public spending could not be reconciled with FDP leader Christian Lindner’s proposals for tax cuts and reductions in social spending. This conflict has left critical issues such as social welfare policies and defense spending uncertain, especially during a period when Germany’s economic growth has stagnated.
The resolution of the political crisis in Germany will not only shape the country’s internal politics but also influence the future direction of Europe. The formation of a new government and the establishment of stable leadership are crucial for Germany to maintain its central role in Europe. Scholz’s pursuit of a temporary solution with a minority government may alleviate the current crisis, but in the long term, it highlights the necessity of either a new coalition or early elections.
[1] “Five things to know about Germany’s government crisis”, AP News, https://apnews.com/article/germany-politics-government-collapse-new-elections-a316c7317ae47a3c6320c6902846f574, (Access Date: 18.11.2024).
[2] Ibid.
[3] Kate Connolly, “Why has Germany’s government collapsed and what happens next?’’, The Guardian, https://www.theguardian.com/world/2024/nov/07/why-germany-government-collapsed-what-happens-next,
(Access Date: 18.11.2024).
[4] Ibid.
[5] Liv Stroud, “How the German government’s collapse impacts the EU”, Euronews, https://www.euronews.com/my-europe/2024/11/07/how-the-german-governments-collapse-impacts-the-eu, (Access Date: 18.11.2024).
[6] Ido Vock & Damien McGuinness, “German coalition collapses after Scholz fires key minister”, BBC, https://www.bbc.com/news/articles/c7v3r046pzzo, (Access Date: 18.11.2024).
[7] Ibid.
