German Chancellor Olaf Scholz is set to request a vote of no confidence from Germany's parliament on Monday, December 16, 2024, marking the first step toward early elections following the collapse of his government. This move comes after a breakdown in his coalition, which now lacks a parliamentary majority.
Scholz's coalition with the Greens lost its majority when he dismissed his finance minister, Christian Lindner of the liberal FDP party, on November 6. The dismissal followed months of tension over budget disagreements and deepening concerns about the economic future of the eurozone's largest economy.
Under Germany’s constitution, the chancellor is the only person who can initiate a vote of no confidence. This procedure, designed to prevent government instability, is the primary method for dissolving parliament and triggering early elections. Since 1949, this clause has been used only five times, with three instances leading to snap elections. While former chancellors Willy Brandt and Helmut Kohl went on to win these elections, Gerhard Schröder lost to Angela Merkel in 2005.
A surprising twist in Monday’s vote could come from the far-right AfD party, some members of which have indicated they may support Scholz’s request in a tactical move.
The departure of the FDP from the coalition left Scholz's Social Democrats (SPD) and the Greens without enough support in parliament at a time when Germany faces its most significant economic crisis in a generation. Despite the collapse, some laws could still pass before the anticipated February election.
The FDP has indicated it will support certain laws that are already far along in the legislative process, particularly those in which the party has had significant involvement. Scholz has urged lawmakers to collaborate in the final weeks before the election to pass essential measures.
Laws Likely to Pass Before Election
On Friday, an agreement between the SPD, Greens, and FDP resulted in a proposal for tax relief and higher child benefits. This draft bill, if approved, would provide over 11 billion euros in tax relief for 2025 and 2026. Additionally, child benefits will increase by five euros to 255 euros per month.
Scholz’s popular "Deutschlandticket," which offers unlimited local and regional transport for a flat monthly fee of 58 euros, is another policy that could survive. Despite its high 1.5 billion euro price tag, it is likely to be approved for next year with support from the conservatives.
Strengthening Germany's constitutional court is also on the agenda, and it is expected to pass with backing from the former coalition partners and conservatives. This is crucial as populist parties could gain enough seats in the next election to block the appointment of new judges, which could lead to backlogs in cases.
Laws Likely to Fall Through
Several key laws, however, may not make it through parliament before the election. A proposed law to promote hydrogen-ready power stations, vital for Germany's energy transition, is unlikely to be passed in time. Similarly, the proposed 2025 budget will not be fully passed due to the coalition's collapse, but the draft budget prepared before the summer will serve as a temporary budget.
Scholz’s proposal to extend a rent freeze until 2029 faces opposition from conservatives, who argue the current freeze is sufficient until 2025. His plan to reduce the VAT rate on food from 7% to 5% has also been criticized by the FDP and conservatives as a political move ahead of the election.
The pension reform plan, which includes a guaranteed minimum pension at 48% of the average wage, is also unlikely to pass due to lack of support. Similarly, his proposal to cap electricity transmission costs at 3 cents per kilowatt-hour has little chance of success without support from opposition parties.
