Germany's Government Collapses After 3 Years

 

"BERLIN -- Germany's fractious coalition government collapsed on Wednesday, tipping the economically embattled nation into a political crisis and adding uncertainty for Europe as the region grapples with Donald Trump's election win in the U.S.

Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner, chairman of the pro-business Free Democratic Party -- the smallest member of his three-way coalition of free-market liberals, social democrats and Greens -- because of disagreements over economic policy, a spokesman for Scholz said.

The three partners had been at odds in several policy areas since the government emerged from an inconclusive election three years ago. More recently, the dispute had focused on how to pull Europe's largest economy out of a stubborn recession that has turned it into one of the region's worst performers.

Scholz said he would seek support from opposition parties to secure approval for a number of bills now making their way through Parliament by the end of the year. He said he would then call for a vote of confidence that could pave the way for early elections.

"I am forced to take this step in order to prevent our country from being damaged," Scholz said. "We need a working government with the strength to make the necessary decisions for our country."

Under Germany's post-World War II constitution, only the federal president, Frank-Walter Steinmeier, has the power to dissolve Parliament and order an early ballot, which is unlikely to happen until March. If an election fails to deliver a clear majority, as polls suggest, it could take months after that to form a new government.

"We Germans can't afford to bicker for another year against the backdrop of a second Trump mandate," said Norbert Rottgen, a senior center-right opposition lawmaker. "Europe needs Germany and if the government can't rise to the challenge, it should go."

Political fragmentation has made Europe increasingly hard to govern. Antiestablishment forces have seen their share of the vote grow recently, but they have often failed to gather outright majorities, pushing centrists into alliances that have been hamstrung by their small political common ground. France is being ruled by a minority government after elections delivered a hung parliament.

The growing political vacuum comes as Europe faces tough decisions on how to respond to Trump, whose plans for tariffs on European imports could damage the region's economy.

The president-elect has also vowed to withdraw military support for European members of the North Atlantic Treaty Organization he deems don't spend enough on defense. Many European countries have struggled to ramp up military spending, either because they haven't forged a political consensus on the issue, as in the case of Germany, or because of high public debt and limited fiscal space, as in the case of France, Italy or the U.K.

Scholz's coalition has also struggled to respond to mounting discontent over immigration.

But its biggest challenge is a deep and intractable economic crisis that economists say is particularly threatening to Germany's long-term prospects. Economists expect the German economy, which has barely grown since 2019, to shrink this year for the second year in a row. Industrial production in the country has fallen since 2017 and corporate investment has trended lower over much of the period." [1]

1. World News: Germany's Government Collapses After 3 Years. Bertrand, Benoit.  Wall Street Journal, Eastern edition; New York, N.Y.. 07 Nov 2024: A.18.