Back in September, exactly a year before the next scheduled Bundestag election, I noted that “a lot can happen in 365 days” – i.e. that the government could fail before then. Germany's three-party coalition, nicknamed the 'traffic light', had certainly been on the blink for a while. In the end, it only took 40 days and 40 nights for the once-promising coalition between the SPD, Greens, and FDP to reach the end of the road. Why did this happen? Who is to blame? And what comes next?
Why did this happen?
If you’d heard that the government was about to collapse so often recently that you’d stopped listening, you’re not alone. Yes, the budget deal for 2025 brokered this summer was a threadbare compromise struck to kick difficult decisions down the road – which is why I termed it a “can of fudge”. But while I certainly expected that can to be reopened this autumn amidst the usual ill-tempered bickering, I did not expect it to explode in everyone’s faces.
And I certainly did not expect this to happen on the day Germany was digesting disturbing news from across the Atlantic. If anything, I and many others expected a Trump win to galvanise the faltering administration. The fact that it didn’t shows just what dire political straits we are in. After three years of strife, the leaders of the coalition parties could not even muster the decorum to postpone the break-up for a few days.
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Of course, the fault lines had long been clear. Originally, back in 2021, the left-leaning, tax-and-spend SPD and Greens found common ground with the right-of-centre liberal FDP on societal questions: citizenship reform and cannabis legalisation were flagship policies on which they could agree. And where they disagreed – mainly about the role of the state in the economy – they decided to fill the fissures with budget surpluses, allowing increased spending without increased tax.
Who is to blame?
So when Germany’s care-free Merkel-era economic model of cheap Russian gas, high exports, and low public spending broke in 2022, all three parties should have realised that they would have to reassess the coalition agreement. And at the very latest, the constitutional court’s judgement on debt rules last November should have focussed minds.
It didn’t. Instead, each party dug in: the FDP refused to countenance tax rises or exceptions to the debt brake; the SPD and Greens remained unwilling to review spending. The result was endless squabbling over paltry millions of Euros in a budget worth half a trillion overall. In that sense, all three parties’ intransigence led to this government’s failure.
Nevertheless, the FDP is the party which comes out of this with the most fudge on its face. Of the three leaders, Christian Lindner has consistently been the least willing to compromise – and the most apt to court media attention at the expense of his coalition partners. His recent paper on reviving Germany’s economic fortunes with spending freezes and lower environmental standards was intentionally leaked to provoke the SPD and Greens. It seems clear that Lindner wanted to leave the coalition, but wanted Olaf Scholz to take the blame for the break-up by firing him.
One key prosecution witness for this case is Robert Habeck, whose Greens are remaining in government with Scholz and who said this morning that a budget compromise could have been reached. The other, particularly convincing one is Transport Minister Volker Wissing, who will now actually leave the FDP in order to stay in the administration as an independent. Both clearly consider Lindner’s actions more irresponsible than those of Scholz.
What happens now?
Yet isn’t it, as Lindner famously remarked in 2017 when declining to take the FDP into government with Angela Merkel’s CDU/CSU and the Greens, “better not to govern than to govern badly”? Certainly, the Ampel coalition had ample problems and most involved in it – as well as most voters – are sick of it. What is less clear is whether the months of political uncertainty Germany now faces will be any better than a government which, although clapped out, was in place with a solid majority.
We now have an SPD/Green/Volker Wissing minority administration. And in theory, there is nothing to stop this lame-duck government staying in office until September 2025. Its ministers are all appointed by President Frank-Walter Steinmeier – and he will not discharge them of their duties until replacements are proposed by a new government.
A new government, however, would need to topple Olaf Scholz and get a new chancellor voted in. Even if the FDP switches sides and supports the CDU’s Friedrich Merz, he won’t command a majority because the SPD, Greens, AfD, and assorted Left/independents won’t support him.
The only way this can change is with fresh elections. Yet these are not scheduled until September 2025, and only the President may decide to dissolve parliament – if the current Chancellor obtains a vote of no confidence. Hence the importance of when Scholz intends to ask the chamber whether he has its support.
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At present, he is under no obligation to do this. By the same token, parliament is under no obligation to pass his legislation. As such, the default setting is now a stalemate. Scholz will argue that Germany needs stability and that rushed elections would be damaging. The opposition will retort that Scholz’ government no longer commands a majority. Both have a point: there are currently no good options.
Scholz is known for his stubborn streak – and understands that Germans prefer even a bad status quo to uncertainty. So he will dare the opposition to vote against the budget for 2025 knowing full well that he has little to lose. Germany is not the USA, where government shutdowns see civil servants’ pay-checks held and suppliers’ bills go unpaid. Rather, the Federal Republic has rules assuring continued spending for core state functions. Investment in anything non-essential will come to a standstill, but the coalition’s recent travails have meant economic stasis anyway.
What is more, beyond the 2025 budget, Scholz’ traffic light government actually had little left on its agenda. Due to its constant infighting, its legislative successes – such as citizenship law – are often overlooked. These things are in place and, as I explained in September, unlikely to be directly repealed even by a new Merz administration, which will need the FDP, the Greens, or (most probably) the SPD as a junior partner.
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All three are unlikely to agree to removing a right to dual nationality they put in place this year. That’s one thing they can still agree on – and, hopefully, one prediction I’m completely right about.
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