What’s holding Scholz’s coalition together?
Lindner has now defined budget caps for the ministries, and they are almost all significantly lower than what was approved in 2024.
NEW DELHI: The leader of the neoliberal Free Democratic Party (FDP), Finance Minister Christian Lindner, used the days around Easter to once again emphasise his political demands in the ongoing budget negotiations. They can be summarised as follows: Germany needs to make massive savings, preferably on social welfare — that, he said, would be the best way to make room for growing military expenditure.
The newspapers immediately ran headlines along the lines of “Pensions or arms?” And Chancellor Olaf Scholz’s Social Democrats (SPD) and the Greens, the two bigger parties in the three-way coalition, reacted gruffly to the suggestion from their junior partner. Scholz had said before Easter: “For me, by the way, it is quite clear that the coalition has agreed that there will be no deterioration in the welfare state.” Green Vice-Chancellor and Economy Minister Robert Habeck made similar comments.
But Lindner will not back down. He has to draft the federal budget for 2025, which is likely to be short by between ½25 and ½30 billion ($27–$32 billion), or around 6% of what the ministries need to implement their declared plans. Lindner has now defined budget caps for the ministries, and they are almost all significantly lower than what was approved in 2024. The red pencil is to be applied particularly drastically to development aid, but also to the family and foreign ministries.
The ministers have until April 19 to make concrete proposals as to where exactly they want to save — and the finance minister is not shy when it comes to giving advice.
A “turnaround in the welfare state” is just as necessary in Germany as an “economic turnaround,” he said. In view of the dramatically poor economic situation, this is a comparison that is tantamount to a declaration of war on the coalition partners. The SPD, Greens and FDP have been in government together since December 2021. The next regular federal election will take place in September 2025. But there is a growing sense that the alliance has long since reached the end of its marriage.
For one thing, there are some basic ideological differences between the two left-wing parties and the neoliberal FDP. At first, all three tried to put these aside and look instead for common ground. They saw themselves as a progressive coalition and wanted to modernise Germany. But then Russia invaded Ukraine, and Germany was hit by an energy crisis and inflation, the economy crashed and money became scarce.
Some of the projects agreed in the coalition agreement have been implemented, others are now probably a waste of time given the situation.
The coalition is suffering from poor poll ratings; never before has a federal government been so unpopular with the public.
The SPD and FDP have dropped especially far below the level of popularity they achieved in the Bundestag elections — the SPD, which took 25.7% in 2021 is now polling at 15%16%, while the FDP, which won 11.5% of voters in 2021 is now on 4%5%. If the party drops below 5% at the 2025 election, it may even lose its representation in parliament.
But there are other elections coming up sooner: first, for the European Parliament in June and then state elections in September. With these looming, parties are retreating to their core values to win over their base.
