2024 German government crisis

2024 German government crisis

Olaf Scholz (SPD), Chancellor of Germany and leader of the coalition since 2021
Date	6 November 2024

Christian Lindner (FDP), former German Minister of Finance and coalition partner of Scholz's cabinet

On 6 November 2024, Olaf Scholz, the incumbent Chancellor of Germany, announced the dismissal of Christian Lindner, the then Finance Minister and leader of the Free Democratic Party (FDP) from his cabinet. Lindner was subsequently dismissed in a formal process by the President of Germany, Frank-Walter Steinmeier, on November 7, 2024. This occurred following recent disputes in the traffic light coalition government over the country's economic policies and ongoing tensions within the coalition. As a consequence, an early federal election is possible, with Scholz announcing his intention to call for a vote of confidence for such on 15 January 2025.

Background

Following the 2021 German federal election, which resulted in a victory by Olaf Scholz and the Social Democratic Party (SPD), a coalition agreement between SPD, The Greens and FDP was reached. The resulting Scholz cabinet was appointed in December 2021. This marked the first time a traffic light coalition (named after the colors associated with the three parties) became the governing coalition in the Bundestag.

With SPD and The Greens being considered centre-left and FDP economically liberal, the ideological differences between the three parties have led to challenges in the newly-formed government from the start. This showed itself in disagreements in areas such as budget planning, environmentalism or social services, often resulting in gridlocks. Additionally, the country dwindeled into an economic crisis while under leadership of the traffic light coalition. Voters punished this with falling approval ratings.

In November 2023, Germany's Federal Constitutional Court (Bundesverfassungsgericht) declared parts of the government's budget policy unconstitutional. Scholz's cabinet had reallocated debt proceeds, that were originally designated to mitigate the COVID-19 pandemic but never spent, to its climate action budget. The court ruling left the budget €60 billion short. The following re-allocation of already planned funds resulted in the 2023–2024 German farmers' protests and further decreased the public perception of the already unpopular government.

In September-October 2024, regional elections in several states of Germany showed desastrous results for the ruling parties while oppositional Christian Democratic Union of Germany (CDU) and far-right Alternative for Germany (AfD) gained large amounts of voters.

In October 2024, Robert Habeck, Minister for Economic Affairs and Climate Action and member of The Greens, proposed a debt-financed fund to promote investment by companies in order to fill the gap in the government's budget. The plan would be irreconcilable with Germany's debt brake (Schuldenbremse), which limits annual structural deficits to 0.35% of GDP. On 1 November 2024, Lindner issued an 18-page policy paper, calling for a new economic policy for the coalition. Lindner called for halting new regulations, introducing new tax cuts, and cutting public spending, including on action against climate change to solve the country's economic crisis.

Lindner's paper was a deemed a "provocation" by The Greens and SPD, who considered his positions incompatible with the coalition agreement. This lead to crisis talks in the Chancellery over the continued existence of the coaltion, which culminated in a session of coalition representatives, including Scholz, Habeck and Lindner meeting on November 6.

Dismissal of Lindner

On the night of November 6, shortly after talks with Lindner and Habeck, Scholz announced he would ask Frank-Walter Steinmeier, the President of Germany, to dismiss Lindner from his position as Finance Minister. According to the German Constitution, only the President can dismiss Federal Ministers from their post, which in the past generally has been done as per request from the Chancelor.

In his statement, Scholz said he saw himself forced to this measure to prevent damage to the country and to uphold the government's capacity to act. He stated he had made an offer to Lindner earlier that day as to how the gap in the budget can be filled, which Lindner failed to accept. Scholz also announced his intention to call for a vote of confidence on 15 January 2025 for a early 2025 federal election.

In response to Lindner's dismissal, the FDP ministers Marco Buschmann and Bettina Stark-Watzinger resigned. Minister for Transport Volker Wissing however decided to remain in his post, announcing early on 7 November that he would leave the FDP as a result.

On 7 November, Frank-Walter Steinmeier officially dismissed Lindner and swore in his successor, Jörg Kukies, as requested by Scholz. Kukies' appointment was criticised by some politicians, including Sahra Wagenknecht (BSW).

Further developments

Several opposition parties called for a vote of confidence in November 2024, which would be much sooner than the date of 15 January proposed by Olaf Scholz. Supporters of this initiative include the CDU and CSU parties (both centre-right), the far-right AfD and the left-populist BSW.

Scholz announced, he would ask Friedrich Merz, leader of the opposition CDU, for support in passing the budget and boosting military spending.