Scholz vs. All: Why Germany will hold early elections and what Ukraine can expect from the outcome.

The crisis in the German government has reached its peak. Chancellor Olaf Scholz announced the collapse of the "traffic light coalition," and the country now stands on the brink of early elections to the Bundestag. More details on this, Ukraine's role in the crisis, and what to expect from the political landscape in Germany can be found in this article by RBK-Ukraine.

The Coalition's Collapse and New Elections: What's Happening in Germany

Just hours after Donald Trump's victory in the U.S. elections, Germany plunged into political instability. The result shocked German politicians, who fear that his tariff measures will impact Europe's leading economy. Many hoped this prospect would unify the "traffic light coalition," but it turned out otherwise.

The coalition is named after the colors of the three parties – the "red" Social Democrats (SPD), the "yellow" Free Democrats (FDP), and the "green" Alliance 90/The Greens. For three years, they held 412 out of 736 seats in the Bundestag, with the FDP having only 92 mandates.

On Wednesday, party leaders met in an attempt to resolve a months-long dispute. The trigger for the acute conflict was the budget for 2025 and measures to improve the economy. The leader of the Free Democrats and Minister of Finance, Christian Lindner, called for spending cuts, tax reductions, and a slowdown of the "green transition." He was even willing to support the budget in exchange for early elections, but the chancellor decided to dismiss him. The final straw was the minister's refusal to back Scholz's plan.

"We need a government that can act... Too often, Lindner blocked laws, too often engaged in petty party-political tactics, and undermined my trust... The Minister of Finance is unwilling to implement this proposal for the good of the country. And I no longer want to expose our country to risks," stated the chancellor.

Olaf Scholz dismissed Minister of Finance Christian Lindner, and the Free Democratic Party exited the coalition (photo Getty Images)

With the opening of the parliamentary session in the new year, he will ask the Bundestag to confirm a vote of confidence. The vote is scheduled for January 15, and if it does not receive enough votes, which is extremely unlikely, elections will take place no later than March.

Currently, Scholz is trying to negotiate with the leader of the opposition Christian Democratic Union (CDU), Friedrich Merz, to pass important laws through the Bundestag. Merz is willing to cooperate but is asking for a vote to be held next week. The day before, they attempted to agree on a final date but ultimately could not reach an agreement.

With the FDP's exit, the "traffic light coalition" has collapsed. Following Lindner, two more ministers left the government. One representative of the Free Democrats, Volker Wissing, left the party but retained his position as Minister of Transport. The new Minister of Finance will be State Secretary in the Chancellor's Office, Jörg Kukies (SPD).

Meanwhile, Lindner blames Scholz for the coalition's collapse, as the chancellor attempted to force him to violate the constitutionally mandated limit on budget expenditures, known as the "debt brake."

"Olaf Scholz refuses to acknowledge that our country needs a new economic model. Olaf Scholz has shown that he lacks the strength to give his country a new impetus," he said.

Thus, Germany finds itself on the brink of early elections. As stated by the co-chair of the Greens, Vice Chancellor, and Minister of Economics Robert Habeck, a decision regarding the next coalition will need to be made by spring. President Frank-Walter Steinmeier speaks of the readiness to dissolve the Bundestag.

Why the Coalition Collapsed and What Ukraine Has to Do With It

The plan mentioned by the chancellor consists of several points. It includes measures to stabilize pensions by fixing them at 48% of the average wage. This is intended to guarantee future pensions but will cost young contributors more. It is estimated that expenses could reach 500 billion euros by 2045.

Scholz also proposes tax relief. Basic rates should be adjusted for inflation so that "everyone has more net income" (currently, wage increases are being eaten away by inflation). Another point includes freezing energy tariffs through subsidies of 1.3 billion euros and a 400-million-euro package for the automotive industry.

The fourth point directly concerns Ukraine. As the chancellor stated, the reality is that Russia's aggressive war will have a profound impact on Germany over the coming years.

"Support for Ukraine remains crucial. It is clear that I am not willing to finance our support and investments in defense at the expense of pensions or healthcare. Therefore, I do not put our citizens in a position to choose between investing in our security or jobs and a modern economy. This contradiction is dangerous," the chancellor declared.

The federal government has allocated 12.5 billion euros for these purposes for 2025. However, Scholz proposes to allocate additional billions. To do this, the debt limit must be exceeded, which can only be done in exceptional circumstances. In his view, the urgent need to support Ukraine is a suitable justification.

Sources from Reuters say that Scholz wanted to increase the support package by 3 billion euros and finance it by suspending the "debt brake." Lindner did not agree to this. Yesterday he stated that his party had not wavered in supporting Ukraine. He even allegedly offered to transfer long-range Taurus missiles. But the chancellor categorically rejected this possibility and showed the minister the door.

FDP leader Christian Lindner rejected Scholz's budget plan and package of measures, including additional billions for Ukraine (photo Getty Images)

Certainly, the issue of Ukraine did not lead to the coalition's collapse. It was merely a consequence of what was already easily predictable, namely the politicization of the aid issue.

"Ukraine itself is not to blame. But defense and military assistance cost money. Although there is a relatively high level of support in German society, there is still no kind of far-sighted consensus. Accordingly, it is necessary to prove why supporting Ukraine is essential," explains political scientist and senior analyst at the Western Institute, Zygmunt Wojciechowski from Poznań (Poland), Viktor Savinok.

For a long time, Scholz did not do this, and in recent months, it seems he was doing the opposite, claiming he wanted to become the "chancellor of the world."

"Now he has played the Ukrainian card and started saying that it is necessary to lift the 'debt brake' due to the war. On one hand, what Russia is doing, its hybrid actions and disinformation in Germany, falls under the threat to national security. On the other, judging by the chancellor's logic, he decided to play the Ukrainian card against the Free Democrats and the CDU. From the latter, he needs agreement on increased spending and elections in March," he explained to RBK-Ukraine.

Party Ratings and What the Coalition Will Look Like After the Elections

The government crisis has occurred at a critical time. Germany's economy is stagnating, its infrastructure is aging, and the military's level of readiness and equipment raises questions.

All of this could provoke the already growing disenchantment with the major parties in favor of populist movements. For example, the far-right Alternative for Germany (AfD) has 78 seats in the Bundestag but showed historic results in regional elections in Thuringia and Saxony. Its nationwide rating is assessed at 17%, making it currently the second most popular party, which among other things planned to nominate its candidate for the position of federal chancellor.

Its ideology opposes Eurointegration and immigration, and it is often labeled neo-fascist. The "Alternative" is almost openly funded by the Kremlin and has a dubious reputation as a "puppet of Moscow." Berlin deputy Gunnar Lindmann supports Russian aggression and spreads fake news about the war in Ukraine. Meanwhile, leader Tino Chrupalla advocates for the restoration of the "Nord Streams."

Despite its relatively high rating, this party has no chance of entering the next government. The main political forces do not want to work with it at either the federal or state level.

"Therefore, it will not come to that (to a coalition involving the AfD, - ed.). Moreover, Scholz's idea to hold early elections in March may be related to trying to at least slightly 'bite off