What is really going on in Germany? The government falls and industry flees

Months of bickering in the German government culminated on Wednesday evening with the chancellor Olaf Scholzin to the announcementthat his finance minister Christian Lindner get a shoe.

The three-party government coalition thus came to an end, and Germany is now led by a minority government of the Social Democrats and the Greens. That means early elections.

Scholz himself said that he intends to vote on the government’s confidence in the Bundestag, the German parliament, on January 15, which is a way in Germany to trigger new elections. According to Scholz, the parliamentary elections could be held in March, but the opposition already demanded on Wednesday that they should be held earlier. Originally, the new parliament would have been elected in the fall of 2025.

The possibility of new elections has been speculated in Germany for some time. Up until now, the negotiations between the government partners, which have sometimes continued into the wee hours of the morning, have usually produced compromises that have been agreed on. Now Scholz apparently had enough of his troublesome minister.

The latest argument in the government was triggered by the question of the 2025 budget, which after months of negotiations has still not been finalized. According to the Finance Minister’s calculations, five billion euros were missing from the budget. Even if the amount had been inflated in the ministry for publicity purposes, according to various estimates, the state’s budget gap is in the billions range.

In addition, forecasts show that the German economy will not maintain growth figures this year, for the second year in a row. According to economists, only the year 2025 would show great economic growth for Europe’s largest national economy.

German industry and employers’ organizations have criticized the government for not having decided to do more to improve the economic situation. The loudest voices have even talked about industrial flight, when the chemical giant BASF:n companies like have decided to move part of their production out of Germany due to high energy prices, excessive bureaucracy and a lack of skills.

However, the fired economy minister Lindner has also faced a lot of criticism, because he, as the leader of a party that has shrunk to one percent in national polls, has so often and so conspicuously sided with the projects included in the government program.

In order for Scholz to get his important economic and social policy initiatives through before the elections, he now has to approach the largest opposition party, the Christian Democrats, and their leader Friedrich Merziä in the hope of cooperation.

According to Scholz, the parliament would have to, for example, quickly decide on reducing the income tax for employees and on the new pension package. The chancellor had already said earlier that he wanted to strengthen German industry with new billions, which are now at stake again. The election result in the United States also promises challenges in Germany’s most important export market.