German government faces make-or-break moment in shadow of US election

BERLIN — As the United States elects its president, Germany’s already teetering coalition is facing a crunch week that could spell the end of Chancellor Olaf Scholz’s government.

Scholz is set to meet Economy Minister Robert Habeck from the Greens and Finance Minister Christian Lindner from the fiscally conservative Free Democratic Party (FDP) for crisis talks Tuesday and Wednesday aimed at heading off a budget conflict that has aggravated tensions in the fractious three-party governing coalition.

“Regardless of the outcome of the U.S. election, I believe that this country deserves to be governed responsibly, and we will see in the next few days whether everyone can muster the strength to actually do so,” Saskia Esken, one of the leaders of Scholz’s Social Democratic Party (SPD), told reporters on Monday.

Friday saw the leak of a policy paper in which Lindner, who is also the leader of the FDP, laid out a plan for tax cuts and scaling back already adopted climate policies. His proposals, which are in line with his party’s balanced-budget approach, are starkly at odds with the visions of the SPD and the Greens, the FDP’s more left-leaning coalition partners.

The 18-page leaked document has drawn comparisons to a 1982 paper by then-Economy Minister Otto Graf Lambsdorff (also of the FDP), which ended up bringing down the SPD-led government. This paved the way for a takeover by the center-right Christian Democratic Union — and to Helmut Kohl leading Germany for 16 years.

Lindner’s detailed text, which reads as if weeks of work went into it, sent shock waves through Berlin and prompted Scholz to invite the head of the SPD and Lindner for talks in the chancellery on Sunday evening.

Subsequent crisis meetings between Scholz, Lindner and Habeck have since been scheduled, with the final one to take place Wednesday. That evening, the government’s highest-ranking council, the coalition committee, is set to convene to decide whether the partners sign off on a common plan — or go their separate ways.

The latter would either mean the collapse of the governing coalition and thus snap elections, likely in spring; or an FDP exit from the governing coalition, with the SPD and the Greens continuing to rule in a minority government.

“The chancellor and the finance minister have assured each other that there will be no spontaneous decision until Wednesday,” Bijan Djir-Sarai, the FDP’s general secretary, told reporters on Monday in Berlin.

Central to the negotiations is the adoption of the 2025 budget by parliament — in which a gap of at least €2.4 billion, and potentially far more, needs to be filled — as well as an agreement on measures to revamp the country’s ailing economy.

“If the budget fails, we in Germany will enter a long period of uncertainty. An impasse at the worst possible time,” said Habeck on Monday in view of the situation in Ukraine, the U.S. presidential election, and the dire economic situation at home.

Signs of the latter bedeviled Scholz last week as flagship carmaker Volkswagen announced plans to shutter at least three plants in Germany for the first time in its 87-year history.

Nearly three out of four Germans are worried about the country’s economic situation, according to an ARD poll published late last week, which also showed that more than one in two who responded favor early elections, as satisfaction with the ruling coalition reached a new low of just 14 percent.

Scholz’s government has been on the brink since the European election in June, when the three coalition parties suffered major losses.

But a win by Trump in the U.S. election could well alter the political calculus and inspire Germany’s coalition leaders to plod on.

“The most important issue, if you look at the timing, is to talk about how we deal with the results of the U.S. election,” said Omid Nouripour, one of the outgoing leaders of the Greens, about Wednesday evening’s key coalition meeting. “This will have serious consequences for our economy, for our security, for the military situation throughout Europe.”

Rixa Fürsen contributed reporting.