On Wednesday evening, Germany’s SPD, Greens and FDP traffic light coalition (Ampelkoalition) collapsed and was consigned to the history books. Here’s how it unfolded and what we can expect from German politics in the coming weeks.

FDP out of German coalition government

The plug has been pulled on the Ampelkoalition’s amber light. On the evening of November 5, Chancellor Olaf Scholz (SPD) announced that Finance Minister Christian Lindner would be booted from the three-way coalition, taking FDP politicians with him. The coalition of the social democratic SPD, left-wing Greens and neoliberal FDP has struggled to unite on almost every challenge it has faced since signing a coalition agreement in 2021.

Cracks have long been visible, with the coalition’s popularity among voters most recently sitting at a record-low 14 percent. Scholz, Lindner and Economics Minister Robert Habeck (Greens) were suffering deja vu of a 2023 budget crisis, desperately trying to plug a 10-billion euro hole in its budget for the coming year. With Lindner infamously tight on the purse strings, the three parties were struggling to see a united way forward.

On October 23, Habeck put forward his own plan to save Germany’s ailing economy, which has been under unprecedented pressure since Russia’s invasion of Ukraine and only narrowly avoided recession after recording slight growth in the third quarter of 2024. But the state of coalition relations began to edge closer to the precipice on November 1.

Unbeknown to Scholz and Habeck, Lindner decided to draw up his own budget plan, which detailed cutting taxes and limiting policies which had already been adopted to scupper the effects of climate change. Lindner’s 18-page plan was leaked to the press last Friday and chaos ensued.

On November 3, Scholz summoned Habeck and Lindner to unite on their contradictory, individual budget proposals and multiple crisis meetings were planned for the coming days. The ultimate decision of whether the coalition was healthy and cooperative enough to make it through to Germany’s next federal election (Bundestagswahl) was to be made at a chancellery dinner on the night of November 5.

Lindner has betrayed our trust too many times, says Scholz

After the dinner, Scholz addressed journalists and said he had asked permission from the Federal President to dismiss Lindner. “I felt compelled to do this to avoid damage to our country,” the Chancellor explained.

In the wake of Donald Trump’s historic victory, Scholz continued that Germany needed “a government that is capable of negotiating in order to make necessary decisions for our country”. The future Republican president’s time in office is projected to increase strain on Germany's export economy; during his campaign, Trump said he would impose a 60 percent tariff on Chinese imports and 20 percent tariff on international imports.

The Chancellor added that there was no longer a “basis of trust” with Lindner, "He has broken my trust too often. [...] Serious government work is not possible under such circumstances." Slights that Lindner was “egotistical and small-minded” gave an insight into frustrations that have been ready to boil over for months.

In the German media, Lindner going his own way and presenting his alternative budget plan has drawn comparisons to a similar move by FDP Economy Minister Otto Graf Lambsdorff (also of the FDP) in 1982, which caused SPD demise and drew the path for Helmut Kohl of the Christian Democratic Union (CDU) to begin his 16 years as Chancellor.

Confidence votes and snap elections

Now a minority government, Scholz announced that he would hold a confidence vote on January 15, 2025, and in the meantime begin talks with CDU leader Friedrich Merz about working with the conservative, centre-right party.

Merz has already told Scholz that the January date is too late considering the coalition's unpopularity, but the Chancellor is determined to push some more policies through the Bundestag before leaving office.

With the Ampel now out of favour for a while, the CDU is polling as the favourite to win the next Bundestagswahl, which was initially planned for September 28, 2025. If Scholz loses his confidence vote, which is looking extremely likely, it would spell a snap election for the country. March 9 has already been chosen as a possible date.

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