Scholz coalition collapses, Germany heads for early elections

Germany has entered a serious political crisis with the collapse of Chancellor Olaf Scholz's ruling coalition, which is likely to pave the way for early elections next year.
The turmoil has hit Europe's largest economy, which is struggling with a prolonged downturn, and Berlin is worried about the impact of Donald Trump's return to the White House on trade ties and security.
Scholz said he would ask for a vote of confidence by January 15 so lawmakers "can decide whether to clear the way for early elections," which could be held by the end of March - six months earlier than scheduled.
The Social Democrat leader spoke after sacking his recalcitrant finance minister Christian Lindner from the Free Democrats at a dramatic night-time meeting of the three-party coalition, saying there was "no longer a basis for trust" with Lindner.
The beleaguered chancellor also indicated he would seek talks with the leader of the conservative Christian Democratic Union, Friedrich Merz, with the offer "to work together constructively on issues that are crucial for our country".
Vice Chancellor Robert Habeck signalled that his Greens party, the third partner in the alliance, would remain in a minority government and "continue to fulfil its duties", AFP reported.
Greens Foreign Minister Annalena Baerbock stressed that the political chaos in Berlin at such a globally volatile moment meant that "this is not a good day for Germany and not a good day for Europe."
Scholz sacked Lindner during a crisis meeting of senior representatives of the three ideologically different parties, which have been arguing for months over economic and budget issues.
Lindner had proposed sweeping reforms to revive Germany's troubled economy, which the other two parties opposed.
He had long flirted with the possibility of leaving the hapless coalition and repeatedly warned of an "autumn of decisions" as difficult budget negotiations loomed.
Scholz, after sacking Linder - who took three other ministers from the SPD cabinet with him - harshly attacked the minister for his "petty political tactics" and accused him of selfishness that was "completely incomprehensible".
Scholz pointed to Trump's re-election, Germany's economic difficulties and the wars in Ukraine and the Middle East as reasons why Europe's leading economy now needs political security.
"We now need clarity on how we can sustainably finance our security and defence in the coming years without jeopardising the cohesion of the country," he said.
"In view of the American elections, this is perhaps more urgent than ever," the chancellor added.
As the German economy is expected to contract for a second year in a row, Lindner demanded a cut in corporate tax, an easing of climate regulations and a reduction in welfare benefits.
In the bitter dispute, Scholz, Lindner and Habeck have presented conflicting economic plans and held rival meetings with business leaders, deepening the sense of dysfunction and weakening Scholz's authority.
Scholz said he offered Lindner a plan with steps to reduce energy costs and increase investment in businesses, secure jobs in the auto industry and maintain support for Ukraine.
But Linder - a fiscal hawk and staunch opponent of increasing the debt - has shown "no willingness" to accept it, Scholz said, adding that he "don't want to subject our country to this kind of behavior anymore."
Scholz and his rebellious coalition partners have drawn sharp fire from Merz, who has long pushed for early elections in which polls show he will be the frontrunner.
"We can't afford to argue for another year," said CDU lawmaker Norbert Roetgen after Trump's victory.
"Germany is important in Europe, and if the government can't deal with that, it has to make way now," he added. | BGNES