German Chancellor Olaf Scholz will receive a vote of confidence in parliament on Monday, December 16.
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German Chancellor Olaf Scholz lost a confidence vote in Germany’s Bundestag on Monday, clearing the way for snap elections in February.
Scholz is also expected to lose the vote, which he called for himself in November to bring forward elections scheduled for autumn 2025.
It marked the sixth time such a vote has been held in German history and the fourth time the president has fallen foul of voting.
Scholz said on Monday he was asking for a vote not just from parliament but from all voters.
“Do we dare to be a strong country and invest heavily in our future,” Scholz told lawmakers before the vote, according to Google Translate.
Scholz fired former Finance Minister Christian Lindner in November, effectively ending Germany’s ruling coalition that had been in power since 2021. The Free Democratic Party (FDP) and the Green Party form a party.
The SPD and Greens remain in the government as a de facto minority even after Monday’s vote and will continue to do so until a new Bundestag is formed. However, without the parliamentary majority needed to pass the law, Scholz is widely seen as a “lame duck”.
The three-way coalition government is plagued by disagreements over its budget and economic policy stances. Tensions came to a head with a paper written by Lindner in which he outlined a vision for reviving the German economy. However, the former finance minister also opposed the basic positions of the Social Democrats and Greens in his paper.
All parties are also struggling to finalize Germany’s 2025 budget, with a resolution seemingly impossible.
The government will now operate on an interim budget until the current Bundestag implements its own budget – the German Finance Ministry said on Monday it expected an interim spending plan for 2025 to be drawn up as early as the middle of next year.
What happens next?
German President Frank-Walter Steinmeier now has 21 days to dissolve parliament. A new election will then need to be held within 60 days of dissolution, the date has already been set February 23rd.
The German constitution sets out a series of procedures designed to make the dissolution of government as peaceful as possible and avoid the political turmoil that characterized the Weimar Republic in the 1930s – a tumultuous period that played a key role in Germany’s rise. in Germany.
The campaign for the 2025 election has begun, with Germany’s parties discussing initial policy proposals around key themes such as immigration, the economy, taxation, the debt brake and social security. The full manifesto may be released in the coming weeks.
Political parties also announced which candidate they would choose to be prime minister if they won the most votes. Despite the collapse of Scholz’s coalition, he was selected as the SPD candidate for chancellor, with opposition leader Friedrich Merz taking the position on behalf of the CDU.
The CDU and its Bavarian affiliate the Christian Social Union (CSU) are currently in the lead poll Looks set to become the largest party, putting Merz in prime position to succeed Scholz as chancellor. Subsequently, it is widely expected that the CDU/CSU will form Germany’s next government with the SPD or, less likely, the Greens.
Peel Hunt chief economist Kallum Pickering said on Monday that Germany’s economic malaise could force an eventual agreement on new fiscal support regardless of the election outcome.
“Even within the first three to six months of a new administration, the debt brake is not going to change, and if they have a large enough majority, I think ultimately the economic conditions will just force them to accept the realistic fiscal stimulus that they need,” Pi said. Kling told CNBC’s “Signpost Europe.”
“When Germany implemented fiscal stimulus, I think a lot of things started to look a little better,” he added.
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