Germany heads for early elections after Olaf Scholz loses vote of confidence

Stay informed with free updates

Simply register at german politics myFT Digest – Delivered straight to your inbox.

Germany is headed for early elections after Chancellor Olaf Scholz lost a vote of confidence, ending his fragmented coalition government at a time of tension for the euro zone’s largest economy.

Scholz’s defeat on Monday by 207 to 394 votes paves the way for the dissolution of Parliament before early elections scheduled for February 23.

In pre-election polls, the chancellor and her center-left Social Democrats are trailing both the opposition CDU and the far-right Alternative for Germany (AfD).

Scholz’s widely expected defeat sends Germany to the polls amid an increasingly bleak economic outlook, the threat of a trade war with the United States and political turmoil elsewhere in Europe.

The Bundesbank warned last week that Europe’s largest economy would grow just 0.1 percent in 2025.

Immigration and the debate over military support for Ukraine are other divisive issues in an election in which the AfD and other populist parties hope to make big gains.

The SPD and its coalition partners, the Greens, lost their parliamentary majority last month when Scholz fired his finance minister, the head of the liberal FDP party, Christian Lindner.

The collapse of the so-called traffic light coalition came after months of disputes over the budget and financing of the country’s enormous investment, defense and social spending needs.

“Politics is not a game,” Scholz said in a speech to parliamentarians before the vote. “The question is whether and how we invest in our country.”

The traffic light coalition “has been a brave project from the beginning. . . But it is a project that has failed,” said Andrea Römmele, professor of political communication at the Hertie School in Berlin.

France has also been dealing with political turmoil with the defeat of Michel Barnier’s government in a vote of confidence this month.

Other European governments are also preparing for the return as US president of Donald Trump, who threatened to impose universal tariffs of up to 20 percent on imports and called for a negotiated settlement to end the war in Ukraine.

Scholz’s government was the first three-party coalition in Germany’s post-war history.

Taking office in December 2021, the administration promised to usher in a green industrial revolution for the eurozone country.

But plans were derailed when Russia invaded Ukraine three months later, forcing Berlin to reverse decades of dependence on Russian gas and reverse its foreign and defense policy.

Scholz called the challenge facing the country a “Zeitenwende,” or turning point in history, by allocating €100 billion to modernize the army and supply weapons to Ukraine.

It suffered one of its biggest setbacks when the country’s constitutional court invalidated the coalition’s budget in November 2023. The court ruled that it violated a constitutional provision that limits new public borrowing to 0.35 percent of GDP a year.

The decision caused a €60 billion hole in the country’s public finances and a dispute between the fiscally conservative FDP and its coalition partners in the SPD and the Greens.

“We need quite a radical change now,” said Guntram Wolff of Bruegel, a think tank. “The business model will have to be different. It will not be based on . . . cheap Russian gas, the United States for security and China for exports. This time is over.”