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German chancellor Olaf Scholz has sacked his liberal finance minister Christian Lindner, plunging the eurozone’s largest economy into political chaos hours after Donald Trump’s victory in the US presidential election.
The move, which came during a meeting of senior ministers and party leaders on Wednesday evening, brings the curtain down on a deeply unpopular coalition government that had become a byword for discord and acrimony.
It leaves a void at the heart of Europe just as concern is growing in EU capitals over what a second Trump presidency will mean for transatlantic relations.
The sacking of Lindner is likely to precipitate snap elections more than six months before they were due to be held next September, ushering in a long period of uncertainty that the EU can ill-afford as it braces for a trade war with the US while trying to fend off a growing economic threat from China.
The trigger for Lindner’s dismissal was a dispute over next year’s budget. The three coalition partners — Scholz’s Social Democrats (SPD), Lindner’s liberal Free Democrats (FDP) and the Greens — could not agree on how to plug a €9bn hole in the spending plan ahead of a meeting of parliament’s budget committee next week.
However, the conflict became overlaid with deeper ideological divisions over how to deal with Germany’s economic struggles.
Ministers recently downgraded the country’s growth forecast, meaning Germany is now facing its first two-year recession since the early 2000s.
The sense of coalition disunity only deepened last month when Scholz met industry bosses and trade unions but pointedly failed to invite Lindner or the Green economy minister, Robert Habeck.
Lindner responded by hosting his own discussion with business leaders on the same day.
A few days later, Lindner proposed ambitious reforms including cutting taxes, softening ambitious climate targets and pushing through big changes to welfare and pension systems.
The ideas, nearly all anathema to the SPD and the Greens, worsened the coalition crisis.
Habeck then tried to avert a showdown by offering an olive branch to Lindner, saying the billions of euros that had been promised to US technology giant Intel in subsidies for a chip plant in eastern Germany — now put on ice — could be used to plug the budget hole rather than for the Greens’ pet projects.
Coalition leaders spent much of Wednesday appealing for cabinet unity in the face of Trump’s election win.
Omid Nouripour, the Greens’ chair, said the coalition had an opportunity “to signal that we have understood how serious the situation is”.
Habeck said “now is the time to show some responsibility . . . Germany must be fully capable of acting”, he wrote on X.
SPD co-leader Lars Klingbeil told public broadcaster ARD that coalition leaders at Wednesday’s meeting should “throw all tactical considerations overboard” and “make it clear what responsibility we currently bear”.
Scholz’s next move is unclear. He could table a confidence vote in parliament, which he would be likely to lose. He would then have to ask President Frank-Walter Steinmeier to dissolve the Bundestag and schedule snap elections.
But Scholz could also continue to rule through a minority government, relying on the opposition to help vote through legislation.
However, that option is seen as unlikely because the main opposition party, the Christian Democratic Union, has indicated it will not help out Scholz, and would instead push for early elections.
A poll published on Wednesday by Forsa showed that most German voters have had enough of Scholz’s coalition. Eighty-two per cent of respondents said they believed it would not find solutions to the economic crisis before the elections scheduled for September.