Few in Germany remember that Olaf Scholz promised dynamic political leadership when he became chancellor in December 2021. It was only on Wednesday evening, three luckless years later, that Scholz showed what he meant.
In spectacular fashion, Scholz effectively blew up his own coalition by firing finance minister Christian Lindner, and sent a series of rhetorical rockets out the door after him.
On live television, the chancellor morphed from a soft-spoken Hamburg lawyer into Scholzilla. Lindner was an untrustworthy person who broke promises repeatedly and prioritised “petty party politics ... his own voter base and the short-term survival of his own party” over the good of the country.
“I want to spare the country such behaviour,” said Scholz. “There is no basis of trust for further co-operation.”
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Minutes later, a visibly shaken Lindner, leader of the liberal Free Democratic Party (FDP), hit back by calling Scholz too “dull and lacking ambition” to revive recession-hit Germany.
It was a flashy end for the temperamental three-way “traffic light” coalition of Scholz’s Social Democratic Party (SPD), Greens and FDP.
The alliance took office in December 2021 promising a “progressive transformation” of Germany’s economy, infrastructure and welfare state. Making good on years of late Merkel neglect, the coalition pushed forward welfare reforms and multi-billion investment in the country’s crumbling rail network.
Russia’s full-scale invasion of Ukraine shattered Europe’s postwar order and saw the Scholz coalition respond quickly; a “watershed” programme released €100 billion for Germany’s armed forces and taboo-shattering arms deliveries to Ukraine worth about €14.7 billion to date.
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Even the abrupt end of Russian gas deliveries, and a simultaneous final exit from nuclear power, forced Germany to find new energy sources – which it did, if at a cost.
“But the coalition never made any fundamental changes to its political priorities after the Russian invasion, nor did they come clean with voters about the cost,” said Prof Klaus Schubert, political scientist at the University of Münster. “Instead, the coalition just muddled on.”
The muddling came to a halt a year ago when Germany’s highest court threw out the government’s 2024 budget for its overly creative accounting, in particular repurposing unspent emergency pandemic funds.
That was the opportunity the neoliberal Lindner needed to reactivate Germany’s so-called “debt brake”: a constitutional provision, set aside in the pandemic, that restricts annual structural deficits to 0.35 per cent of gross domestic product.
Budget cuts were the order of the day, he insisted.
For years this Lindner approach suited Scholz, politically more a centrist-liberal than a leftist. But a very different chancellor spoke on Wednesday evening.
The ongoing cost of supporting Ukraine, the likelihood of Trump 2.0 protectionism and the accelerating meltdown of Germany’s industrial base were, he said, challenges that required fiscal flexibility rather than rigid liberal doctrine.
Lindner framed his last stand differently, suggesting in his farewell letter to ministry staff that resisting demands for extra borrowing was about “choosing my convictions over my office”.
Beyond principles, Lindner knows that setting aside the debt brake once more would be the final political blow for his FDP, struggling for survival on 3 to 4 per cent in polls.
Summing up his three years in office, Lindner said “money was the only thing that could make compatible our incompatible political concepts”. This week the coalition ran out of money – and road.
On Thursday afternoon, he and three of the four FDP ministers received their dismissal papers from President Frank Walter Steinmeier. Like a bad-tempered headmaster, Steinmeier read the assembled politicians the riot act, saying “this is no time for tactics and squabbling, but a time for reason and responsibility”.
Studiously ignoring the president, and his former ministers, a stony-faced Scholz appointed as interim finance minister Jörg Kukies, a trusted adviser and former Goldman Sachs banker.
Earlier, at a short meeting, opposition leader Friedrich Merz, head of the Christian Democratic Union, rejected the proposed Scholz timetable for a confidence motion in January and fresh elections by March.
Instead, Merz, whose party is first-placed in polls on 33 per cent support, wants movement this month.
“Things have to happen quickly,” he said. “We cannot afford to have months of a government without a majority, then elections, then weeks of coalition talks.”
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A snap election could see a very different new Bundestag emerge: without the FDP, a traditional CDU ally, and with a quarter of seats occupied by populist politicians.
Polls suggest the far-right Alternative for Germany is the second-most popular party with 18 per cent support, while the leftist-conservative new BSW alliance has 8 per cent.
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