Germany’s Scholz loses confidence vote, triggering early election

By Kate Brady

BERLIN - German Chancellor Olaf Scholz lost a vote of confidence on Monday, triggering the dissolution of parliament and rare early elections at a moment when Europe’s largest economy is faltering.

The parliamentary elections will take place on February 23, seven months earlier than the standard schedule. The latest opinion polls suggest a rightward shift in the results - and a next chancellor who would cut welfare benefits, take a harder line on migration policy and lift restrictions on weapons use by Ukraine.

Given the uncertain times, wider Europe is also looking for a leader, but experts question whether any German contender is up to the job.

As chancellor, Scholz is perhaps best known internationally for his declaration, after Russia’s 2022 invasion of Ukraine, of a “turning point” in Germany’s attitude toward military power. He oversaw a 19 percent increase in defence spending, including a special fund of 100 billion euros, and a new willingness to send lethal aid to a country at war. Germany has been Ukraine’s second-biggest backer, behind the United States.

But on the whole, Scholz has been a cautious leader. He has been unable to establish anything near the stature of his predecessor, long-time chancellor Angela Merkel.

“Merkel kept the consensus, but Putin broke it. And Scholz could not forge unity in his party or the public,” said James Bindenagel, a former US ambassador to Germany and visiting distinguished fellow at the German Marshall Fund. “He did not successfully manage the country’s three critical dependencies: cheap Russian energy, Chinese markets and American security.”

Ultimately, Scholz’s position was imperilled by a fracturing of his governing coalition and fights over economic and financial policy. This will be the fourth time in the past 50 years that Germany has held early elections. Scholz and his cabinet will remain in office until parliament elects a new chancellor.

Scholz has been confirmed to lead his Social Democratic Party (SPD) in the upcoming campaign, giving him a shot at returning as the leader of the next government. But polls put conservative candidate Friedrich Merz, who once headed the German arm of US investor BlackRock, in a prime position to become the fifth German chancellor since reunification.

Merz’s conservative Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), are poised for the strongest finish, with 32 percent of the vote, according to the latest polls. The two parties, collectively known as the Union, dominated German governments throughout Merkel’s era - though Merz has pulled them further to the right.

The far-right Alternative for Germany (AfD) is polling second, with 18 percent, and could win a record share of the vote at the federal level. But there is no meaningful chance of the party’s chancellor candidate, Alice Weidel, leading a government coalition, as other parties have ruled out working with the far right.

The most likely outcome appears to be a conservative-led grand coalition between the CDU/CSU and the SPD, with some potential for a coalition between the conservatives and Greens. The election could be followed by weeks or months of further uncertainty, as party leaders hammer out a deal.

ECONOMIC POLICY

In full campaign mode in parliament on Monday, Scholz called for investment in defence and aid for Ukraine without delay - but not at the expense of “good health and care, against stable pensions and efficient municipalities.”

In the debate that followed, Merz accused the chancellor of inflicting a failed economic policy on Germany and contradicted Scholz’s accusation that his conservatives want to cut pensions. “That will not happen with us. And anyone who says otherwise is lying!”

Scholz’s “turning point” speech had changed nothing, Merz claimed.

Germany’s sputtering economy and Russia’s war in Ukraine are expected to dominate the unseasonal election campaign, as well as the next government’s agenda.

For years, the German economy was the powerhouse of the European Union. But competition from China, a weakening of demand for exports, the end of cheap energy from Russia and years of underinvestment have all contributed to stagnation. Big-name German companies have been announcing big cuts — including Volkswagen, which is contemplating its first domestic plant closures in the carmaker’s 87-year history.

The next government will be under pressure to spend, spend, spend — including on defence, infrastructure, schools, social welfare and manufacturing. But without a change to the constitutionally enshrined debt brake, which effectively forces the German government to keep a balanced budget, experts say there’s little room to manoeuvre.

Meanwhile, Germany is bracing for President-elect Donald Trump to make good on tariff threats - potentially touching off a trade war. Officials in Berlin say they have been pleasantly surprised by initial communication with the returning president. But Germany has been a frequent target of Trump. The German Economic Institute calculates that a US-EU trade war could dent Germany’s gross domestic product by $134 billion by the end of Trump’s time in office.

WAR IN UKRAINE AND MIGRATION

The war in Ukraine is also a focal point of the election. Both Scholz and Merz visited Kyiv this month to tout their support. Merz appears to be even more zealous on military contributions. While Scholz has argued that approving long-range Taurus missiles would risk further escalation, Merz told Ukrainian President Volodymyr Zelensky last week that restricting Ukraine’s weapons use was “akin to forcing your country to fight with one hand tied behind your back.”

But Merz’s conservatives have also said they would cut state support for Ukrainian refugees in Germany.

The far-right AfD and the leftist populist, pro-Russian Sahra Wagenknecht Alliance (BSW) are both campaigning on a “peace party” platform and attempting to tap into creeping war fatigue, particularly among some eastern voters.

Migration is another pivotal issue. Under Scholz, Germany had already tightened its border controls this fall, citing a need to take “a hard line against irregular migration.” Merz favours even greater emphasis on security, law and order, and has argued, controversially, that immigrants should conform to Germany’s “guiding culture.” He rails against what he characterises as Merkel’s “open border” policies in the face of refugees fleeing the Syrian civil war in 2015.

Now, the fall of the Assad regime in Syria has led to a halt in processing asylum claims from that part of the world and prompted calls for Syrian refugees in Germany to go home.

While critics described the immediate debate as in “bad taste” given the uncertainty in Syria, the AfD’s Weidel posted on X that the German government should draw up a deportation plan as soon as possible, similar to neighbouring Austria. The plan should “prevent a new wave of refugees and … prepare for the repatriation of hundreds of thousands,” Weidel wrote.

– THE WASHINGTON POST