December 26, 2024

German Chancellor Olaf Schulz and Finance Minister Christian Lindner meet at the Bundestag in Berlin, Germany, on June 26, 2024.

Michelle Tantusi | Getty Images News | Getty Images

German Chancellor Olaf Scholz announced on Wednesday that he had fired Finance Minister Christian Lindner, ending Germany’s ruling coalition after months of political wrangling and raising the possibility of snap elections in March.

The three-year-old coalition between Scholz’s Social Democrats (SPD), the Greens and Lindner’s Free Democrats (FDP) has been unstable for some time, with differing budget and economic policy positions leading to tensions and conflicts.

Scholz launched into a tirade against Lindner at a news conference Wednesday night, saying he was not concerned with serving the public interest and that he was fired to prevent harm to the country. Scholz said he would call for a no-confidence vote in parliament on January 15, raising the possibility of early elections in March.

“Anyone who joins the government must act responsibly and reliably, and they must not seek asylum when things get difficult,” Scholz told a news conference, according to Reuters. “They must be willing to fight for all. Compromising the interests of citizens… But that is precisely not what Christian Lindner is focusing on now, he is focused on his clients.”

Both the FDP and Greens confirmed late on Wednesday that Lindner’s departure would spell the end of Berlin’s fractious coalition, although the latter said it would stay on.

Lindner paper

Watch the full CNBC interview with German Finance Minister Christian Lindner

All parties have also been struggling to agree on a 2025 budget, which still has a multi-billion-euro funding gap and is still under negotiation. The budget deadline is set for later this month.

debt brake

Lindner told a news conference on Wednesday that his party had proposed economic transformation that Scholz rejected. He called Scholz’s counterproposal unambitious.

“The Liberal Democrats remain ready to take responsibility for this country, and we will try to do the same in a different government next year,” Lindner told the report, according to a CNBC translation.

Lindner said that Scholz had asked Germany to suspend the debt brake, but he could not accept it. Germany’s debt brake, enacted in 2009, limits the amount of debt the government can take on and sets a maximum size for the federal government’s structural budget deficit. Regulations stipulate that it must not exceed 0.35% of Germany’s annual GDP.

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