Germany’s coalition government collapsed on November 6, leading to a three-month delay before the country will go to the polls in an election that is likely to be overshadowed by global tensions. Chancellor Olaf Scholz has announced a vote of confidence will take place on December 16, with a snap poll expected on February 23.
The collapse was due to infighting between the Social Democratic Party (SPD), Greens, and Free Democrats (FDP) over the country’s economic and climate policies. FDP leader Christian Lindner wanted major public spending cuts and rolling back of climate targets, while Scholz argued for a pause on Germany’s “debt brake” to limit public borrowing.
Former BlackRock board member Friedrich Merz is now leading the Christian Democratic Union (CDU) and could become the next chancellor. He has promised to roll back several of the coalition’s reforms, including those related to climate change, taxes, social welfare spending, and migration policy.
The election will be overshadowed by global tensions, including Donald Trump’s return to the White House, an increasingly perilous situation in Ukraine, and a flagging domestic economy. Germany is heavily reliant on exporting manufactured goods and faces severe consequences if Trump’s plans to slap 20 percent tariffs on all imports and 60 percent on Chinese imports come into effect.
With no end in sight to the economic woes, more financial institutions and business representatives are calling for a reform of Germany’s debt brake to increase public investment. Merz has recently suggested an openness to reforming it, possibly signifying a shifting consensus.
The far-right Alternative for Germany (AfD) is on course to record a historic result, with polls showing the party polling second at 20 percent. The socialist Left party and newly formed Sahra Wagenknecht Alliance are also currently below the 5 percent threshold required to enter parliament.
Source: https://www.aljazeera.com/news/2024/11/20/from-far-right-gains-to-the-economy-whats-at-stake-in-germanys-election