Donald Trump’s re-election, it would seem, was the straw that broke the German coalition’s back, probably only the first of many Trump-generated waves now sweeping across the Atlantic that will rattle a Europe largely unprepared for the shock result.
The shaky red-yellow-green or “traffic light” coalition had already been precariously close to the rocks. A prolonged budget row between, on one side, Olaf Scholz’s Social Democrats and the Greens, and on the other the liberal Free Democrats of former finance minister Christian Lindner, finally came to a head on Wednesday. Scholz’s entreaty to Lindner to acknowledge the danger posed by Trump to Ukraine’s war effort and to relax Germany’s strict debt rules so the government can spend more on its defence fell on deaf ears. Lindner, accused by the chancellor of acting irresponsibly and in bad faith, was fired.
Scholz intends to carry on until a confidence vote in January , with almost inevitable defeat triggering a general election. The opposition is calling for an earlier vote. Polls suggest it will be won by the opposition Christian Democratic Union (CDU), led by Friedrich Merz, with the far-right Alternativ fur Deutschland likely to rack up gains. The German economy now faces its first two-year recession since the early 2000s and the three -party ruling coalition has seen its popularity plummet.
The crunch issue is the refusal of the economically liberal and fiscally conservative FDP to plug a ¤9 billion hole in government spending plans. Scholz, frustrated by the constitutionally enshrined debt-brake, pleaded with Lindner to accept that the “emergency” exception should be invoked. Lindner opposed plans to cap energy charges and incentives for businesses to invest, demanding austerity measures, tax cuts and an end to costly climate policies.
The new injection of uncertainty into EU politics comes at a particularly bad time, with economies in the doldrums, Trump threatening a tariff war, a growing economic threat from China, and Russian gains in Ukraine.