Germany headed for early elections after Olaf Scholz loses confidence vote

Germany is heading for early elections after Chancellor Olaf Scholz lost a vote of confidence, ending his fractious coalition government at a period of strain for the Eurozone’s largest economy.

Scholz’s loss by 207 to 394 votes on Monday paves the way for the dissolution of parliament ahead of the early elections pencilled in for February 23.

In pre-election polling, the chancellor and his centre-left Social Democrats are behind both the opposition CDU and the far-correct Alternative for Germany (AfD).

Scholz’s widely anticipated loss sends Germany to the polls amid a darkening economic outlook, the threat of a trade war with the US and political turmoil elsewhere in Europe.

The Bundesbank warned last week that Europe’s largest economy would develop by just 0.1 per cent in 2025.

Immigration and the debate over military back for Ukraine are other divisive issues in an election in which the AfD and other populist parties aspiration to make large gains.

The SPD and their coalition partners, the Greens, lost their parliamentary majority last month when Scholz sacked his finance minister, the liberal FDP event chief Christian Lindner.

The collapse of the so-called traffic light coalition followed months of quarrelling over the apportionment and financing the country’s huge financing needs, defence and social spending.

“Politics is not a game,” Scholz said in a talk to MPs before the vote. “The question is if and how we invest in our country.”

The traffic light coalition “has been a courageous assignment from the very beginning . . . But it is a assignment that has failed”, said Andrea Römmele, professor of communication in politics at the Hertie School in Berlin.

France has also been contending with political turbulence, with the loss of Michel Barnier’s government in a vote of confidence this month.

Other European governments are also preparing for the profitability as US president of Donald Trump, who has threatened to impose universal tariffs of up to 20 per cent on imports and called for a brokered deal to complete the war in Ukraine.

Scholz’s government was the first three-event coalition in Germany’s postwar history. Taking office in December 2021, the administration vowed to usher in a green industrial revolution for the Eurozone country.

But the plans were derailed when Russia invaded Ukraine three months later, forcing Berlin to reverse decades of reliance on Russian gas and overturn its defence and foreign policy.

Scholz dubbed the test the country was facing a “Zeitenwende”, or turning point in history, allocating €100bn to modernise the military and supplying weapons to Ukraine.

He suffered one of his biggest setbacks when the country’s constitutional court invalidated the coalition’s apportionment in November 2023. The court ruled that it violated a constitutional provision that limits recent community borrowing to 0.35 per cent of GDP a year.

The selection led to a €60bn hole in the country’s community finances and to feuding between the fiscally conservative FDP and its coalition partners in the SPD and the Greens.

“We require radical transformation now,” said Guntram Wolff of Bruegel, a ponder-tank. “The revenue strategy is just going to have to be a different one. It’s no longer going to be based on cheap Russian gas, the US for safety and China for exports. This period is over.”