The Future of the German Coalition Uncertain Due to Internal Disputes

Tensions within the German coalition government are escalating as the Free Democratic Party (FDP) discusses its future within the government, raising concerns about a potential collapse of the coalition. Following Chancellor Olaf Scholz's call for a summit to address Germany's economic challenges, the uncoordinated statements from the economy and finance ministers revealed the increasing dysfunctionality of the coalition. The three parties comprising the center-left Social Democrats (SPD), FDP, and Greens are increasingly at odds as they unofficially kick off their campaigns for the federal elections next year.

With the FDP polling below the 5% threshold required for entry into the federal parliament, the party is under pressure to decide whether to remain in the coalition. Finance Minister and FDP leader Christian Lindner, while reluctant to destabilize the coalition, faces internal party pressure to adopt a tougher stance on FDP policies. Lindner has emphasized the importance of stability for Germany, while criticizing the recent policy proposals from Green Economy Minister Robert Habeck as a "sign of conceptual despair."

The coalition, initially united in response to the external threat posed by Russia's invasion of Ukraine, is now struggling with internal divisions as it attempts to revive an economy projected to contract for the second consecutive year. The budget committee meeting on November 14 will be critical in determining the coalition's future, with the deficit in the 2025 draft budget currently estimated at €13.5 billion ($14.58 billion).

Despite a lack of trust and the need for further negotiations among coalition leaders, the most likely outcome appears to be that the coalition will remain intact until the federal elections on September 28, 2025. However, Matthias Miersch, the new general secretary of the SPD, pointed to the possibility of a minority government should the FDP or Greens exit the coalition early.

The government's unpopularity may lead to calls for new elections; this process would require Chancellor Scholz to initiate a vote of no confidence. The likelihood of former U.S. President Donald Trump being re-elected on November 5 could serve as a unifying external factor for the coalition to maintain its leadership during such a critical period, given the potential implications of higher tariffs and conditional support for NATO allies.