German coalition government collapses as Scholz fires his finance minister

The ruling German coalition has collapsed: Social Democrat (SPD) Chancellor Olaf Scholz has sacked Finance Minister Christian Lindner of the liberal FDP party.

The leaders of what is known in Germany as the "traffic light" coalition - SPD, FDP and the Greens - had gathered at the Chancellery in Berlin in the evening.

About an hour after the news was broken by several media outlets, Scholz faced the press and criticised his finance minister in no uncertain terms.

"He (Lindner) has broken my trust too many times", Scholz said, adding that there is "no more basis of trust for further cooperation" as the FDP leader is "more concerned with his own clientele and the survival of his own party," according to the chancellor.

The coalition leaders meeting was widely reported as a "make or break" meeting for the coalition, with Lindner, in particular, having hinted in the run-up that he was not too worried about the latter.

In his reaction to Scholz's scathing remarks, Lindner accused the chancellor of a "calculated break-up of the coalition" and his coalition partners of "not even accepting" the FDP's proposals for turning the economy around "as a basis for discussion".

Discord about how to revive an ailing economy

The coalition had been at odds for a while, with serious strains on the budget for 2025 and a disappointing performance by the German economy eliciting increasingly different suggestions on how to face and solve the problems.

Many coalition lawmakers had hoped that, after Donald Trump secured the US presidency once more, internal strife would be put aside to focus on the geopolitical challenges ahead.

SPD leader Lars Klingbeil told German public broadcaster ARD in the morning: "I hope that everyone will now throw party tactics overboard, that everyone will look each other in the eye in the coalition committee this evening and realise once again what responsibility they now bear."

Political analyst Thu Nguyen, Deputy Director at the Berlin-based think tank Jacques Delors Centre, said it was not meant to be in a comment on social media.

Scholz also confirmed he would bring a no-confidence vote to the Bundestag by 15 January, paving the way for parliamentary elections by the end of March at the latest.

Robert Habeck, minister for the economy and the green transition, said in a press conference on behalf of the Greens that, from their perspective, "it wasn't necessary that the evening ended like this", as suggestions for an agreement had been presented.

He later added that, for the sake of stability, "we will now swiftly clear the way for new elections" while fulfilling the duties of government "in their entirety" until then.

The article has been updated with the latest comments of leading coalition politicians.