A Rather Orderly Collapse
What to know about the upcoming German 'snap' election
The dust hadn’t even settled on the headlines announcing the results of the presidential election in the country I am from, when I woke up to headlines announcing the “collapse of the government” in the country where I now reside.
It’s enough to drive you to drink.
Fortunately—or, unfortunately, depending on your preference—I already drink.
And, also fortunately, I was familiar enough with Germany’s multi-party parliamentary democracy to know this wasn’t the catastrophe the clickbait headlines would have you believe.
What collapsed was the already tenuous three-way “traffic-light” governing coalition.
I spent this past week basically Googling ‘Germany, what happens now?!’ And the following links to people who understand things a lot better than I do helped me get my ‘raised-in-the-U.S.-two-party-system’ head around it.
This really good summary by the The Local: Germany [article is behind a paywall] describes the situation this way:
German politics was thrown into disarray on Wednesday November 6th after Chancellor Olaf Scholz, of the SPD, fired Finance Minister Christian Lindner (FDP).
It triggered the breakdown of the 'traffic light' coalition government comprised of the centre-left Social Democrats, Greens and liberal Free Democrats.
Scholz said he would hold a vote of confidence, which he expects to lose, and that would lead to snap elections in March - months earlier than the original planned date of September 28th 2025.
So, Scholz is still chancellor. The government is still operating. But the chancellor and the remaining ministers are now part of a minority government, which will have a limited ability to get any legislation passed until the elections, now planned for February.
YouTuber Andrew Bossom, a Brit who has lived in Germany since 1993 and has dual citizenship, produced a pair of videos that also do a great job of explaining the situation so nervous expats like myself can understand it.
The ‘debt brake’ and the future of the German economy
At the core of the long-simmering dispute between Scholz and (now ex) Finance Minister Christian Lindner was whether or not to suspend Germany’s constitutionally mandated debt limit (colloquially known as the “debt brake,” Schuldenbremse, in German).
In 2009, the German parliament passed a balanced budget amendment to the German constitution that limited the amount of new debt the federal government could take on each year to 0.35% of gross domestic product (GDP).
The provision allows for suspension of the limit in times of national emergency or a recession. It was suspended, for example, in 2020 to allow the government to manage the COVID-19 pandemic, but was reinstated in 2023.
In the years after its implementation, the debt brake was successful in reducing the country’s total debt to 59.5% of GDP just prior to the pandemic. Its debt-to-GDP ratio currently stands at 62.9%. By comparison, the United States’ has a total debt that is 125% of its GDP.
Scholz and allies are in favor of “modifying the debt brake” to fund investments in Germany’s aging infrastructure, help its struggling economy, and meet its commitments to defense spending as part of the North Atlantic Treaty Organization (NATO). Lindner refused to suspend the brake, favoring any spending increases be coupled with cuts to spending.
What now?
All of Germany’s many political parties are preparing for federal elections in February, meaning they are selecting their candidates for chancellor and campaigning for the votes of citizens.
German citizens will go to the polls and vote to elect a new Bundestag (the German parliament), which will then select the next chancellor.
As a non-citizen, I am not able to vote in any German election, but I will be watching them closely. And one source for informed news and commentary that I like is The German Review, a Substack newsletter by journalist Jörg Luyken.
The German Review provides important context to the straight reporting that we get from outlets like the Tagesspiegel or DW.
For example, this from his article about the collapse of the traffic-light coalition:
“Olaf Scholz’ “traffic light” coalition - presented to us three years ago as pragmatic and un-ideological - was never far away from a nervous breakdown. Terrified by opinion polls, the parties were constantly scheming against each other.
Thanks to research by Die Zeit newspaper, we now know that the Free Democrats planned in detail how they could “torpedo” their own government and then try to paint themselves as the victims.
As with all nefarious German plots, the FDP met in a Potsdam villa to plan the destruction of Olaf Scholz’ government. On a day codenamed “D-Day” they wanted to do what the “wets” did to Margaret Thatcher and resign when Olaf Scholz was abroad. Unfortunately for them, Scholz got wind of their plans and fired FDP boss Christian Lindner a day before they could put their plan into action.”
I have enjoyed reading his Wednesday updates that are free to all readers, and he just now launched a weekly Election Diary of political news for paid subscribers. So, I am upgrading now for that, too.
We live in such interesting times.