Chaos in Europe: Germany’s Government Collapses As Trump Returns

Germany’s coalition government collapsed on Wednesday after Chancellor Olaf Scholz sacked his finance minister Christian Lindner, plunging the eurozone’s largest economy into political chaos hours after Donald Trump’s victory in the US presidential election.

Scholz told reporters he would table a confidence vote in parliament on January 15, which most observers expect him to lose.

That will pave the way for snap elections in March.

Lindner’s sacking and the departure of his pro-business Free Democrats (FDP) from the government brings the curtain down on a deeply unpopular coalition that had become a byword for discord and acrimony.

It leaves a void at the heart of Europe just as concern is growing in EU capitals over what a second Trump presidency will mean for transatlantic relations.

Germany and the rest of Europe now face a long period of uncertainty they can ill-afford as they brace for a trade war with the US while trying to fend off a growing economic threat from China.

In a blistering statement delivered in the chancellery, Scholz blamed Lindner for the breakdown of the government, calling him “selfish” and “irresponsible”. He said he “cared only about his own clientele and the short-term survival of his own party”.

The trigger for Lindner’s dismissal was a dispute over next year’s budget.

The three coalition partners — Scholz’s Social Democrats (SPD), Lindner’s FDP and the Greens — could not agree on how to plug a €9bn hole in…   spending plans ahead of a meeting of parliament’s budget committee next week.

However, the conflict became overlaid with deeper ideological divisions over how to deal with Germany’s economic downturn and how much public debt the government is legally allowed to raise.

Scholz said he had asked Lindner to agree to loosen Germany’s “debt brake”, a cap on new borrowing which is enshrined in the constitution and which the SPD and Greens have long wanted to reform.

That would have allowed Germany to take on more debt and so boost its support for Ukraine, at a time when fears are growing Trump might cut aid to Kyiv once installed in the White House.

Scholz said he had also proposed capping network charges to bring down energy prices for industrial companies, creating incentives for businesses to invest, and passing a package of measures to safeguard jobs in the car industry, which faces more competition from China.