Will Germany's lackluster coalition government survive?

Resentments have been simmering in the neoliberal Free Democratic Party (FDP) for months now. The smallest coalition partner in Germany's center-left federal government has suffered one defeat after another in state and local elections in 2022 and 2023.

Local politicians have said the unhappy partnership in Berlin is to blame . Opinion polls indicate that only one in five citizens is still satisfied with the work of the center-left Social Democratic Party (SPD), the Greens and the FDP in the federal government.

There are many in the FDP who only see one way out: The party must exit the coalition government, which they think is holding it back. A survey of party members, which concluded on January 1, 2024, was supposed to clear the way for this. However, 52% of FDP party members who voted opted to remain in the coalition.  

Keep calm and carry on?

The result is likely to have caused a sigh of relief in the party headquarters of the three governing parties. Although the vote isn't legally binding, the FDP party leadership could not have ignored a majority in favor of leaving. The so-called traffic light coalition — named after its party colors — would have come under even more pressure. 

After the votes were counted, the FDP party leadership rushed to sell the narrow vote in favor of remaining as a success. "The FDP wants to take responsibility for our country and shape it," announced FDP Secretary General Bijan Djir-Sarai. "The party members want to see a clear liberal stamp on government policy. The result strengthens our resolve to tackle the enormous challenges facing the country."

Dismal approval ratings in the polls

In fact, Monday's result will likely only provide a temporary boost. That's because 2024 is an election year, with the European elections to be held on June 9 and the state parliaments in Saxony, Thuringia and Brandenburg to be reelected in September. Local elections are also expected to take place in nine out of 16 federal states.

In Saxony, Thuringia and Brandenburg, the Alternative for Germany (AfD), which has been classified by the Office for the Protection of the Constitution as right-wing extremist, is by far the strongest party. Only the center-right Christian Democrats can keep up. The SPD, Greens and FDP lag far behind, with dismal single-digit approval ratings in some opinion polls. 

The three parties have also lost considerable ground at the federal level since taking office in December 2021. While they initially still had a majority with a combined 52% of the vote, their approval ratings in opinion polls have now plummeted to 32%. 

In an address to the nation on New Year's Eve, Chancellor Olaf Scholz acknowledged that many people are dissatisfied. "I take that to heart," he said. But the world has become "more turbulent and rougher" and is changing "at an almost breathtaking speed," he added, saying Germany must change with it. 

Scholz's approval rating continues to plummet

But is it really the changes that people are struggling with, or is it the way the coalition government is dealing with the many crises and their consequences? Those include the energy crisis that followed the Russian war of aggression on Ukraine, the skyrocketing prices and the stalling of the German economy. 

It probably hasn't escaped the chancellor's attention that his own personal approval rating continues to plummet in the polls. This is certainly partly down to the 65-year-old's famously brusque communication style.

When the coalition is at loggerheads — and that was often the case in 2023 — Scholz likes to keep out of the public eye and only makes himself heard when he feels it's absolutely necessary. 

Germany faces looming budget hole

2024 will probably be the most difficult year of the coalition's time in government. In addition to all the political and ideological differences, there is now also a dispute over money.

The coalition is an alliance of one economically liberal and two left-wing parties. The SPD and Greens are committed to a strong state and want a lot of money for social welfare and climate protection. The FDP is of the opposite opinion, insisting on individual responsibility and a slimmed-down state.

To reconcile these contradictions, Scholz, who was still federal finance minister in 2021, came up with a clever trick. He proposed that unused credit authorizations of $65 billion ($71 billion), which the parliament had approved in 2021 during the COVID-19 pandemic, were to be transferred to a special fund under his government.

The proposed budget provided enough funding for the political plans of the SPD and Greens, while at the same time enabling the FDP's finance minister, Christian Lindner, to produce a regular federal budget without taking on any new debt.

The plan worked for just under two years. Then in November 2023, the Federal Constitutional Court found the repurposing of pandemic funds to be unconstitutional. As a result of the ruling, the coalition government's budget no longer adds up, and further borrowing is tightly limited by Germany's constitutional debt brake, which was introduced in 2009.

The coalition government will now have to make savings for the rest of its time in power, but not without leaving at least some breathing room. The dispute over money will likely cause further rifts in the months ahead.

What expenditures are essential?

At the SPD party conference, Scholz said Germany may have to make more money available for Ukraine "if others weaken" — an obvious allusion to the political situation in the US ahead of the 2024 presidential election. Therefore, he said, decisions need be made on the German side to ensure "that [Germany is] in a position to do so." 

The chancellor was clearly referring to Germany's debt brake, which obliges federal and state governments to balance their books. Scholz has managed to persuade Finance Minister Lindner that they will at least discuss suspending the debt brake again this year, if it turns out that military and financial support for Ukraine needs to be increased further.

But this doesn't mean the FDP will agree. The FDP member survey showed that 48% wanted an end to the coalition, and that number could easily grow.

Party leaders are more afraid of a split than anything else. In the event of new elections, they would not only have to fear losing power, but many lawmakers would probably also have to give up their seats in the Bundestag.

That's why at the level of officeholders and in the parliamentary factions, everyone is trying to keep the coalition going. The fear of political obsolescence is probably the only thing that will bind the coalition partners together in 2024.

This article was originally written in German.

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