The Traffic Light Coalition finally blew up. What’s ahead?
Image clip from Twitter Video.
Government Collapsed
The three-way traffic light coalition, named after party colors, finally blew up when Chancellor Olaf Scholz Fired his Finance Minister triggering a vote of confidence.
Scholz’s center-left government was the first to be formed after the retirement of Chancellor Angela Merkel, who anchored European politics for 16 years. Scholz’s “traffic light” coalition — named after the colors of his Social Democrats (SPD), the Greens and the neoliberal Free Democrats (FDP) — has been in power since 2021.
But it was precarious from the start. After a short-lived honeymoon on sparse common ground, ideological divisions emerged. The parties have been engaged in months of infighting — while the German economy stagnated, the coalition parties sank in public opinion polls, and the far-right Alternative for Germany (AfD) party drew historic gains in state elections.
It was a budget fight that ultimately brought everything down.
To fill big gaps in next year’s budget, Scholz’s SPD and the Greens have favored state- and debt-financed policies. The FDP, though, is an ardent proponent of the “debt brake.” Enshrined in the constitution, designed to force balanced budgets, the debt brake can be suspended only in exceptional circumstances — most recently in response to the coronavirus pandemic and Russia’s 2022 invasion of Ukraine.
Scholz said Wednesday that FDP leader and Finance Minister Christian Lindner had been dismissed after rejecting economic proposals.
“The finance minister shows no willingness to implement the offer for the good of our country. I do not want to subject our country to such behavior any more,” Scholz said, visibly irritated. Scholz alleged that “Lindner only cares about the survival of his own party.”
Speaking soon after, Lindner shifted blame to the chancellor. “Olaf Scholz has played down the economic concerns of the citizens,” he said. “His counterproposals are dull, unambitious and do nothing to combat the weak growth.”
Lindner said he could not agree to Scholz’s demand to suspend the debt brake and had proposed fresh elections, which Scholz “brusquely rejected.”
Snap Elections?
Not necessarily, even if the confidence vote fails.
The German president, largely a ceremonial position gets the call to accept or deny a snap election.
Deliberately Lose a Vote?
How It Works
✍️ German chancellors don’t have the power to call an early election, which lies with the federal president, but they can try to trigger one by deliberately losing a confidence vote in the lower house of parliament.
✍️ Once Scholz fails to garner a majority in the Jan. 15 ballot, he can ask President Frank-Walter Steinmeier, a former Social Democrat vice chancellor, to step in and dissolve parliament. The election would then have to be held within 60 days. (BBG)
German Polls
The only thing an election will do is shift the power from one very unstable coalition to another very unstable coalition.
It takes 5 percent to have representation and FDP might not make the threshold. Far Left party Die Linke likely not have representation.
All of the parties rule out an alliance with AfD and BSW. Combined, that is about 26 percent of the total.
The last Grand Coalition (SPD and Union) nearly collapsed and this go around would might not even have a majority. Union is CDU/CSU.
The German and French governments are both nonfunctional.
Meanwhile, back in the US …
Please consider Why Trump Won the Election in One Clear Picture
Voters are angry everywhere, for obvious reasons, but few can figure out why.
The Brookings Institute Wonders Why Consumer Sentiment is So Bad, I Can Help
On November 5, I wrote The Brookings Institute Wonders Why Consumer Sentiment is So Bad, I Can Help
Please check it out. I posted ten charts and dozens or reasons why consumer sentiment is bad.
Throw the bums out is not just a US thing. It’s happening all over Europe too.
I fully agree that one disfunctional coalition will be replaced by another one. FDP MinFin Lindner wanted to save money and was pushing for delivery of German made Taurus missiles to Ukraine but Scholtz prefered to give UKR just money. problem with Taurus is that it can carry nuclear weapons, it must be operated by Germans and could be used by UKR to deliver a dirty nuclear bomb to Moscow. Lindner didn’t want to break the law on debt brake and he understands that Germany needs changes (economic reforms) and his party is getting destroyed by every day of being part of this crazy coalition.
2025 should be a very interesting year and one for the ages Prepare to say bye bye to the current monetary system starting in the United States.
Albert Einstein once said that:
The most logical solution will happen when Germany experiences enough pain to make that solution unavoidable which is an economic alliance with Russia for cheap energy and raw materials. It is the only way to sustain their level of staunch socialism.
When you see how much energy is taxed in Germany you understand that it is not the price of energy that holds Germany back but the taxes it pays.
They must have very low cost energy and materials to support uncommon socialism. They are not going to cut back on the socialism so there is only one course of action left; go get the cheap energy and materials which they use to have.
At some point they lost their minds thinking they could somehow pull it off without it. Even the WEF man himself Klaus stated what Germany was doing was a bold Herculean task of trying to get off cheap fossil fuels. He applauded it but admitted they were likely being way too optimistic.
If they lowered the taxes on energy then they would be competitive but since taxes on energy are such a good generator of money for the government, they can’t cut the taxes. We see the same thing in France. Fortunately with nuclear the cost base is lower than in Germany so even with high taxes on energy here the price of energy is still lower. Eliminate taxes on energy and German industry would love it but the Treasury would scream, the Socialists would scream and the Greens would scream. Maybe some German politician will cut the Gordian Knot.
Although Scholz is nominally the chancellor, it looked like the role is played by two upstart activists from Greens with dubious qualifications.
This little man has fired the wrong people.
AfD! AfD! AfD! AfD!
Trying to make a Trade of European dysfunction has been a head scratcher.
Euro short against USD has made a move for some while.
That Scholz needs to gun the economy and wants to by Debt was thwarted by Lindner.
AFD unable to govern on its own as things are progressing negative for German industry but not yet to point whereby a Seismic shift occurred to give them a majority.
With France also hitting the skids Europe’s two choices are reform or print. Since there is not the political will for reform that leaves Print.
Canada also on verge of moving against Trudeau and a conservative Government would align better with a second Trump administration.
EURO against Canadian dollar has some promise for movement and has been in a three month consolidation.
I have been in a short against this pair. does not mean right call, but politics of it points that way. It is a reflation trade.
Europe has a history of being paralysed by factionalism and a mess of non-viable little polities ever since the collapse of the Roman Empire, occasionally interspersed by another empire, like France or Germany, but the EU is still at heart the Holy Roman Empire 2.0.
The EU does see itself as the reincarnation of the Roman Empire in a certain way not said and the missing parts such as North Africa and Anatolia have a special statutes that give them quasi-membership. Russia also sees itself as the successor of the Roman Empire too. It’s doubtful the two could join together to make a super Roman Empire since there can only be one so we will have to settle for a Western Roman Empire and an Eastern Roman Empire at least until one or the other or both are overrun by barbarians.
Germany’s Minister of Foreign Affairs, Anna Berbock, is heard saying, “I put Ukraine first, regardless of what my German voters think or how difficult their lives may be.”
Not strange.
When Putin has tanks in Berlin, they’ll understand.
Putin doesn’t have any more tanks Larry. Maybe Chinese-made Ladas will do but I doubt it.
They have, or can fairly easily build, tanks.
What they do not have, are people sufficiently young and limber to be able to climb down into them. The few kids they managed to have before a Volga’s worth of Vodka made them all impotent, are now either dead in Donbas, or are themselves Too Drunk to either Fight or F%$&.
The Russkies are a bit like the geezers making up the Japanese “hard right” in that regard. Obsessed with rebuilding the military to its old glory. Nevermind the only available soldiers over there, being the exact same guys who once fought in WW2, 80 years ago.
It’s a huge problem almost anywhere now: Lack of young people. Japan may have gotten there first. But Russia and Ukraine must surely have caught up by now, given their even lower than Japanese fertility, in combination with their obsession with killing off the few youngsters they still have in silly meatgrinder rituals.
Europe in general is ageing fast. China is just one generation away from Japan, with S.Korea even further along. Asians may live long, and remain healthy longer than what is typical elsewhere. But there are limits to even Japanese longevity and vitality. When employees that the executives refer to as “the kids” are all 65 and up, things are surely starting to get a bit out of hand, even there…..
It’s one statistic where the US does look comparatively healthy. But then, leave it to Trump to spend a fortune promising to deport as much of that advantage as he can……
No wonder Mullahs everywhere seem so confident, despite bombing them seemingly being the latest favorite pastime of pretty much every decaying once-was anywhere. The future belongs to the fertile, after all.
Waiting to see if the Germans have figured out how not to let the Brits goad them into a war with the Russians. It’s worked like a charm every time for the Brits.
When you throw about a trillion dollars (combining US and Europe spending) into a stupid war that the United States caused with its April 2008 decision by CIA puppet George W Bush to bring Ukraine into NATO, a move that Angela Merkel said at the time would be taken by Russia as a declaration of war. yeah there are likely to be poltical consequences
Little puppy dog Scholz. See you later
Who says there needs to be a united Germany? The WWII Allies considered a Morgenthau Plan to split the nation up. If Berlin can’t form a national government perhaps the Lands (States) of the nation need to meet to decide new arrangements.
In the meantime, the sovereignty should devolve to the Lands until they can agree to an arrangement.
At the very least, they could go halfway, and leave the EU.
Freed of the debasement driven redistribution; away from their productive industry and to deadweights at home and across Europe; Germany would be an awful lot better off than they are today.
This is interesting noting that a major German newspaper’s towering headline just announced Trump’s victory with a SINGLE WORD. Yup, an obscenity, you got it. It was the the mighty mother of all F bombs. Nice eh? .
That’s how pathetic Germany is – that they’re paralyzed by anxiety about an election in another country on the other side of the world. Grow some balls, Germany.
That country is keeping Russia from invading Europe. I don’t doubt that ever country in Europe is scared. They need to pull together with the remaining members of NATO and defend themselves. They were stupid to depend on us in the first place … look at us.
Russia has no soldiers left with which to invade anyone.
Or are you referring to North Korea somehow invading Germany?
Russia has no interest in invading Europe. They practically begged the US to be reasonable about the Ukraine in Dec 2021. Not only would the US not renounce the plan to scoop Ukraine (and Georgia) into NATO, Blinken told Lavrov in Jan 2022, that the US wouldn’t foreclose the possibility of putting nuclear-armed missiles into Ukraine. That was contrary to what Biden had assured Putin in a phone call only a month earlier. You really need to stop getting your news from the US regime media.
That word is German for “things have gone badly wrong”. Have you never uttered it?
maybe the party/ticket that germans actually voted-for might be allowed to govern?
nah… extinction via virtue-signaling is preferable to democracy for modern europeans… and they wonder why no one takes them seriously.