CashNews.co
The Lindner paper is just another step in an almost endless list of ever growing tensions within the German government. Up to now, the risk of snap elections had been relatively low as none of the three coalition parties had an interest in earlier elections, given their weak polling results. It now increasingly looks as if the next days could lead to a collapse of the government.
The situation can move quickly. Last night, Olaf Scholz and Robert Habeck met, while Christian Lindner was on TV. The next official meeting of the three is scheduled for Wednesday and earlier meetings or decisions cannot be ruled out. Let’s not forget that Lindner tied his paper to the budget for 2025, which will have to be signed off by November 14th. As mentioned above, in theory, a compromise is possible, but a compromise without political loss of face looks increasingly unlikely.
However, even if Lindner were to withdraw from the coalition government, this would not automatically trigger new elections. In fact, only the federal president can announce new elections if the chancellor loses a vote of confidence in parliament. An alternative to snap elections could be a minority government until the next elections (which are scheduled for late September 2025). The option of the current parliament simply voting on a new chancellor looks highly unlikely.
All in all, we think that the risk of the German government collapsing has never been higher than currently. Even potential geopolitical uncertainty stemming from the upcoming US elections no longer seems to be the guaranteed glue to keep the government together.