Germany's governing coalition collapsed last night after Chancellor Olaf Scholz fired his finance minister, paving the way for early elections, BTA reported.
Thus, Europe's largest economy falls into political turmoil just hours after Donald Trump's victory in the US elections.
After sacking the finance minister from the liberal Free Democratic Party (FDP), Scholz is expected to govern with a minority government made up of his German Social Democratic Party (GSDP) and the Greens, the second largest political force.
He will have to rely on floating majorities to push through laws, and also intends to seek a vote of confidence from parliament on January 15, failing which Germany could go to snap elections by the end of March.
Scholz said he would ask Friedrich Merz, the leader of the opposition conservatives, who are leading polls, for support in passing a budget and increasing defense spending. Mertz is expected to respond at a news conference this morning.
The collapse of the triple coalition was the culmination of months of disagreements over Germany's budget policy and economic direction, amid a sinking government approval rating and the rise of far-right and far-left forces, Reuters noted.
"We need a government that is capable of action and that has the necessary power to make the necessary decisions for our country,'' Scholz told reporters.
He added that he fired Lindner because of his unconstructive behavior in the budget disputes, and accused the minister of putting the party over the national interest and blocking bills under false pretenses.
The development comes just a day after the election of Republican Donald Trump as US president and at a time when Europe is frantically trying to show unity on a range of issues, from possible new US tariffs to the Russian war in Ukraine and the future of NATO.
The government crisis comes at a critical moment for Germany, when it must solve problems such as economic stagnation, outdated infrastructure and unpreparedness in the military sphere.
Political upheavals could further fuel discontent with mainstream parties in the Federal Republic in favor of newer populist movements, including the anti-immigrant Alternative for Germany.
With the political environment in France also volatile, problems in the EU's two largest economies could hinder the EU's efforts to deepen integration at a time when the Union faces challenges from both the east and the west. from the west.
REQUEST TO SUSPEND THE DEBT BRAKE
Contradictions in the coalition intensified over the choice of approach to deal with the unfavorable economic situation. Europe's largest economy is experiencing a second consecutive year of decline and a crisis in its economic model, after the days of cheap Russian gas are over because of Moscow's military invasion of Ukraine in 2022, as well as increasing competition from country of China.
Scholz suggested that a cap be introduced on the price of energy for companies to make Germany more attractive as a place to do business.
He wanted a package of measures to preserve jobs in the ailing auto industry and also increase support for Ukraine.
The SDP proposed cutting public spending, cutting taxes and less regulation as a recipe for economic recovery. The liberals also want to slow down the pace of decarbonization of the German economy.
In a speech after Scholz, Lindner announced that the chancellor had tried to force him to break the constitutional spending ceiling known as the debt brake, a move that Lindner, a fiscal hawk, refused to support.
"Olaf Scholz refuses to admit that our country needs a new economic model," Lindner told reporters. "Olaf Scholz has shown that he does not have the strength to give his country a new impetus."
GSDP and the Greens, although of opposing opinions on some issues, are united that targeted government spending is needed.
The remaining three ministers of the SDP - of transport, justice and education - are also leaving the government, of their own accord.
Scholz said Lindner was focused solely on the short-term survival of his party. "Especially today, a day after such an important event as the US election, such selfishness is completely incomprehensible."
Economy Minister Robert Habek of the Greens said the coalition could not agree on how to fill the hole in next year's budget.
"I want to say on our behalf that for us this evening is unpleasant, even almost tragic, especially on a day like today, when Germany must show unity and the ability to act in Europe," he said after the end of the crisis coalition negotiations in the chancellery in Berlin.