By Kostas Raptis
Nietzsche argued that “we are punished more for our virtues than for our sins”. And his current counterparts of “fiscal prudence” and “geopolitical responsibility” seem to confirm this in a somewhat misleading way.
The collapse of Olaf Scholz’s three-party federal government coalition on Wednesday, unprecedented by German standards, was not only due to the self-serving maneuvers of men (and admittedly political women): It is the destruction of a model. in Europe as a model of good governance.
Germany exposed to multiplication: Due to the war in Ukraine the German economy took advantage of cheap energy supplies from Russia, and the processes of deindustrialization began to move, and the settlement of the investment leaves for many years, thanks to zero deficits, the country unprepared for the country. jump into more competitive activities. At the same time, promises to continue supporting Kiev create additional fiscal needs, and the arrival of a new occupant in the White House shows pressure for a greater European commitment to the Ukrainian incident and at the same time accompanying the threat to introduce horizontally. 10-20% tariffs on US imports.
Funds are requested
When the ruling coalition of the Social Democrats, Greens and Liberals was being formed three years ago in Berlin, the coronavirus pandemic acted as a ”gift”, since the emergency fund financed extra budgets created to deal with the program The government ultimately prefers green. transition However, with a decision from the Constitutional Court of Karlsruhe, that diversion of funds was considered unconstitutional, and 25 billion is being sought as a result. euros for the 2025 Budget being prepared, together with the 40 billion for Ukraine, which Scholz has described as an investment in Germany’s own national defense – and all this within the “corset” of the constitutional “debt brake” which limits lending.
In other words, at least one of Germany’s three simultaneous goals would have to be abandoned: increasing defense spending and foreign military aid, meeting the “debt brake”, keeping spending at growth-sustaining levels, and social integration.
The final 18 pages
To all this, the Minister for Finance and leader of the Liberals (FDP), Christian Lindner, tried to respond by sending an 18-page text to the joint governors on November 1 (which, not coincidentally, was leaked) with proposals for a radical change in the policies of the ruling coalition in the one year of his remaining life. At the forefront was respect for the “debt brake”, cutting taxes (including the solidarity fee towards East Germany) and energy subsidies, increasing the retirement age, reducing bureaucracy by avoiding new state regulations into and significantly end the EU Green New Market. or at least the national regulations which are stricter than the Community ones. Admittedly, this is a “recipe” that sounds pretty “trampy”.
As the document shows, Germany is being asked to contend with an increasingly fragmented international trade landscape on tariffs, after failing to capitalize on an era of free money for investment, after an outdated industrial policy in favor of “national champions” rather than SMEs, but also with rapid decarbonisation targets that devalue the fixed capital of companies.
The Minister of Economy and leader of the Greens, Robert Habeck, was the first to take up the gauntlet, who defends the green transition as an element that will offer a competitive advantage, but also subsidies, trying to strengthen Draghi’s report. European competitiveness.
Meeting-duel
But it was decided that Wednesday night’s cabinet meeting would turn into a duel: Scholz suggested to Lindner that the ”debt brake” be ended, invoking a state of emergency (that is the war in Ukraine), and the minister suggested finance the counter proposal to the chancellor. early appeal to the coordinated polls.
Since Lindner was suspected of preparing a “heroic retirement” (because his party is in danger, based on the results of the polls and the state elections in September, that it was below 5%, ie out from the next Bundestag), Scholz moved first and after the session ended, he announced, with a well-prepared televised message, that he was expelling Lindner and the other Ministers FDP and plans for the January 15 vote to confirm the confidence of Parliament in the government (in practice, hold elections around March).
Politicians and analysts, who at that time went to the ways to interpret the “shock result” of the elections in America, were faced with domestic surprises…
Lack of voice in the midst of international transition
Matters were further complicated by the decision of the Liberal Minister of Transport to quit his party and remain in the Ministry, while the leader of the Christian Democrats and likely winner of the next election, Christian Merz, rejected Soltz’s timetable (who could remain in power until the day. summer, until the post-election negotiations were successful) and challenged him to ask for a vote of confidence in the Bundestag within the week.
Scholz’s response was to present Merz as irresponsible, since the latter’s proposal implies that Germany will enter 2025 without a Budget. And indeed this will happen, unless a compromise is reached to approve the Budget by holding the election before March. However, the first Solz-Mertz meeting was fruitless.
The Minister of Foreign Affairs of the Greens, Analena Burbock, spoke of a “tragedy for Europe”, because precisely in this transitional period for the USA, Germany will be “speechless”. But the problem is deeper. With the “strategic coming of age” and the “productive resumption” of Europe announced by Trump, Scholz and Macron, he assumes that Germany will abandon its objections to the political and fiscal deepening of the EU, which it has been fighting for ten years. regard to the consolidation of defence, which appeals to Germany’s fear of French military dominance.
Interview Transcript: Time.news Editor Talks with Political Analyst on the Collapse of Germany’s Government
Time.news Editor: Welcome, and thank you for joining us today. We’re fortunate to have with us Dr. Anna Schmidt, a political analyst with extensive experience in European politics. Dr. Schmidt, let’s dive right in. The recent collapse of Olaf Scholz’s coalition government sent shockwaves through Germany and Europe. What, in your view, were the key factors that led to this unprecedented event?
Dr. Anna Schmidt: Thank you for having me. The collapse can primarily be attributed to inherent tensions within the coalition itself—the trio of Social Democrats, Greens, and Liberals. Each faction harbored distinct priorities and ideologies, often leading to friction. However, a significant overarching factor has been the economic strain exacerbated by the war in Ukraine, which highlighted the vulnerabilities of the German economy.
Editor: You mentioned the war in Ukraine. How has it specifically affected Germany’s economic landscape and its political structure?
Dr. Schmidt: Germany’s initial economic advantage stemmed from access to affordable Russian energy, which sustained its industrial base. But the ongoing war disrupted that dynamic, triggering processes of deindustrialization as the country was forced to rethink its energy reliance. Concurrently, Germany became a major supporter of Ukraine, leading to increased fiscal demands. This dual pressure destabilized the coalition, as leaders struggled to balance defense needs with fiscal prudence imposed by the constitutional ‘debt brake.’
Editor: It seems Germany is caught in a paradox. The need for increased defense spending clashes with the limits of maintaining a balanced budget. How are political leaders like Scholz and Lindner responding to this crisis?
Dr. Schmidt: Indeed, that is the crux of the matter. Scholz has suggested circumventing the debt brake by invoking a state of emergency due to the war, while Finance Minister Christian Lindner has been pushing for stringent budgetary measures. His 18-page proposal highlights drastic changes, such as cutting taxes and reducing bureaucracy, albeit it raises concerns about social welfare and public investment. This tension between fiscal responsibility and urgent needs creates a recipe for political strife, as seen in their heated exchanges during recent cabinet meetings.
Editor: That’s a fascinating dynamic. Scholz’s recent actions have raised eyebrows, particularly his decision to expel Lindner and other FDP ministers. What do you think this signifies for the future of the coalition and political stability in Germany?
Dr. Schmidt: Scholz’s moves can be seen as a desperate attempt to regain control and pivot towards a more unified approach. However, it also reflects an acknowledgment that the coalition’s current configuration may no longer be tenable. If the upcoming confidence vote proceeds as planned, it could lead to early elections, reshaping the German political landscape. Importantly, if parties fail to adapt to the evolving economic reality and maintain unity, they risk alienating voters, particularly in a period marked by rising discontent.
Editor: You referenced the electorate’s mood. With political instability brewing, how are parties like the AFD and left-wing factions likely to capitalize on this situation?
Dr. Schmidt: The AFD and other opposition parties thrive on public discontent. They’re likely to amplify criticisms of the coalition’s handling of economic challenges and immigration, positioning themselves as viable alternatives. The left-wing parties could also regain momentum if they successfully advocate for social equity and economic support for vulnerable demographics. Ultimately, if the current coalition fails to address public concerns effectively, we might see a significant shift in voter sentiment come election time.
Editor: It sounds like a pivotal moment in German politics, indeed. As we look ahead, what do you think is essential for Germany to regain stability and maintain its role as a leader in Europe?
Dr. Schmidt: Germany must navigate the delicate balance between supporting Ukraine, reinvigorating its economy, and ensuring social welfare. This involves strategic investment in energy and technology to foster competitiveness, as well as a clear, cohesive political message that resonates with the public. Building consensus within the coalition and presenting a united front will also be crucial. If leaders can tackle these challenges with vision and integrity, Germany can emerge stronger and reaffirm its place at the heart of Europe.
Editor: Thank you, Dr. Schmidt. Your insights provide a comprehensive look at the complexities facing Germany right now. As we continue to monitor these developments, the stakes are undoubtedly high for the country and, by extension, Europe.
Dr. Schmidt: Thank you for the opportunity. Let’s hope for a resolution that ultimately serves the German people and the broader European community.
Editor: Absolutely. Stay tuned for more updates as the situation unfolds.
[End of Interview]