Mr Scholz claimed that he made a “generous offer” to Mr Lindner but that the finance minister “showed no interest whatsoever in accepting this offer for the good of the country”.
“Too often, Mr Lindner has blocked laws in an irrelevant manner, too often he has engaged in petty party-political tactics, too often he has broken my trust,” Mr Scholz said.
Mr Lindner hit back in a statement made shortly after in which he accused Mr Scholz of “not having the strength to give our country a new start.”
He added that the Chancellor had tried to get him to suspend the country’s strict debt brake rules, something he refused to accept.
At the end of last week, Mr Lindner set out his conditions for staying in the government in an internal paper that called for an “economic transformation”.
Among the measures were a demand to cut the corporate tax level, freeze all new business regulations and push back the target of achieving net zero by five years.
The paper was immediately rejected by Mr Scholz’s Social Democrats and the Greens, the third party in the coalition.
Mr Scholz began non-stop crisis meetings with his finance minister and vice-Chancellor Robert Habeck of the Greens on Monday, but the three men failed to reach agreement.
Mr Habeck also made a statement on Wednesday. Seemingly referring to the outcome of the US election, he said the breakdown of the coalition was “tragic on a day like this when Europe should be showing solidarity”.
Mr Scholz formed Germany’s first ever three-party coalition in 2021 on the promise to “dare more progress”.
However, plans to focus on investing in the green transition and modernise Germany’s outdated infrastructure were thrown into chaos two months later by the Russian invasion of Ukraine.