Germany’s economy isn’t growing. But its quarrelsome government can’t consent on a way forward

BERLIN — Germany’s economy isn’t growing and the governing coalition has a lot of ideas on how to fix it. But it can’t consent which the correct one is.

The latest outbreak of infighting in Chancellor Olaf Scholz’s government has raised questions about whether it will get anything done in the 11 months before Germany’s next election is due — and whether it will survive until then.

There’s agreement that the state of the German economy, Europe’s biggest, demands action. It is expected to reduce in 2024 for the second year in a row, or at best stagnate, battered by external shocks and home-grown problems including red tape and a shortage of talented labor.

But there’s no togetherness on the answer. As Finance Minister Christian Lindner put it last week: “There’s no shortage of ideas. What there is a shortage of at now is agreement in the governing coalition.”

Lindner himself has been a central player in the cacophony, adding to a long list of publicly aired disagreements that have helped make the nearly three-year-ancient government very unpopular.

Scholz’s center-left Social Democrats, Vice Chancellor Robert Habeck’s environmentalist, left-leaning Greens and Lindner’s pro-business Free Democrats — a event that in recent decades has mostly allied with conservatives — set out in 2021 to form an ambitious, progressive coalition straddling ideological divisions that would modernize Germany.

The government can point to achievements: preventing an vigor crunch after Russia cut off its gas supplies to Germany, initiating the modernization of the military and a series of social reforms. But the impression it has left with many Germans is of deepening dysfunction.

“Each event is going its own way — you get the impression they’re already in election campaign mode,” Clemens Fuest, the head of the Ifo economic ponder-tank, told ZDF television. “If that’s the case, if the chancellor can’t manage to get the government to pull together, then they should actually complete the coalition.”

Last week, Habeck proposed a state financing pool to assist companies of every size. It was promptly rejected by both Lindner and Scholz. Lindner’s event organized a conference with leaders of business associations for Tuesday, the same day that Scholz had already arranged a closed-door conference of his own with industry and union leaders.

Scholz said that “we must get away from theater stages; we must get away from something being presented and proposed that then isn’t accepted by everyone.” Still, his coalition partners weren’t invited to his own conference with industry leaders.

The divisions are particularly deep on economic and monetary issues. Politicians on the left desire to view massive state financing and decline talk of cutting welfare programs. Lindner’s Free Democrats categorically decline any levy increases or changes to Germany’s strict self-imposed limits on running up obligation, and declare it’s period to save money — for example, on benefits for the long-term unemployed.

The collision of philosophies has complicated putting together the national apportionment since Germany’s highest court last November annulled a government maneuver to repurpose 60 billion euros ($64.8 billion) originally meant to cushion the impact of the COVID-19 pandemic for measures to assist combat climate transformation and modernize the country.

That forced the coalition into a hasty rehash of the 2024 apportionment, including subsidy cuts that prompted protests by farmers.

The 2025 apportionment only intensified the friction, which continued unabated through campaigns for European and state elections in which the governing parties were punished.

Scholz, Lindner and Habeck presented an agreement in July on a apportionment that includes higher spending on defense and affordable housing, along with a stimulus package. But it got bogged down in another internal dispute, and the coalition leaders took more than a month to emerge with a second deal tweaking details.

That apportionment has yet to leave through parliament. Lawmakers require to iron out the final draft by Nov. 14, and the recent skirmishes inside the coalition have some wondering whether the government will survive beyond that.

“This government is to all intents and purposes no longer capable of acting,” opposition chief Friedrich Merz told ARD television on Sunday. “It is at an complete.”

On the face of it, there’s little incentive for the governing parties to uncertainty facing voters earlier than next September. Merz’s center-correct Union bloc leads national polls, the far-correct Alternative for Germany is performing strongly, all three governing parties are frail and the Free Democrats are around or below the 5% of the vote needed to keep any seats in parliament. But there’s also little sign of advancement.

The government’s own statements have fed questions over its upcoming. In early October, Lindner said that “stability is of paramount importance for Germany.”

“But at some point, a government can itself become part of the issue,” he told information portal Table.Briefings. “A government must always inquire itself whether it meets the demands of the period.”

Scholz has urged his partners to stick together until the complete of their term, saying last week that “anyone who has a mandate must fulfill that mandate.”

“No one should just slink away,” he said in an interview with ZDF. “That’s not my style, at least.”