November 7, 2024
Finance minister’s leaked paper drives German coalition to the brink as budget deadline looms #NewsGerman

Finance minister’s leaked paper drives German coalition to the brink as budget deadline looms #NewsGerman

CashNews.co

Amid simmering tensions over Germany’s 2025 budget, the country’s coalition government is teetering further toward the brink of collapse after a leaked position paper by finance minister Christian Lindner from the pro-business Free Democrats (FDP) showed to be starkly at odds with coalition partners on key policy questions.

The paper titled “Economic transition for Germany – economic concepts for growth and inter-generational fairness,” seen by Clean Energy Wire, which details policy approaches of Lindner’s FDP, especially regarding climate action and economic transformation, had not been the subject of consultation with chancellor Olaf Scholz’s Social Democrats (SPD) nor with economy minister Robert Habeck’s Green Party.

The paper appears to position the FDP apart from its coalition, in preparation for a federal election. Amongst other things, the party calls for relaxing a wide range of emissions reduction laws, reducing social security payments, lowering taxes, and doing away with Germany’s “unique path” regarding climate policy, demands that are hardly reconcilable with core positions of the SPD and the Greens.

The 18-page document surfaced only two weeks ahead of a parliamentary meeting on 14 November, when the coalition is set to make crucial decisions for the upcoming 2025 budget. The budget meeting is considered indicative of whether the coalition still can overcome internal differences and decide on key policy matters together, or whether Scholz’s government is facing a full collapse that could eventually lead to snap elections early next year, well before the official end of the coalition’s term in autumn 2025. All three governing parties, including the SPD and the Greens, have sought to strengthen their individual profiles in recent weeks.

The parties of the so-called ‘traffic-light-coalition’ (Traffic Light Coalition), named after their respective colours, are suffering from very low popularity ratings, an ongoing period of minimal economic growth and industrial policy challenges, while the conservative opposition alliance of the Christian Democrat Union (CDU) and the Christian Social Union (CSU) enjoys a clear lead in polls. Lindner’s FDP fears in particular that its involvement in the unpopular coalition could ultimately cause it to fall below the 5-percent threshold needed to enter parliament in the next election.

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