Chancellor Olaf Scholz dismisses Finance Minister Christian Lindner

Chancellor Olaf Scholz announced on Wednesday that he had fired Finance Minister Christian Lindner, marking the end of Germany's ruling coalition after months of political wrangling and raising the possibility of early elections in March.

The merger of Scholz's Social Democratic Party (SPD), the Greens and Lindner's Free Democratic Party (FDP), which has existed for three years, had been on shaky ground for a long time, and different budgetary and economic policy positions caused tensions and disputes.

At a news conference late Wednesday, Scholz launched a tirade against Lindner, saying he was not interested in serving the common good and that he was fired to prevent damage to the country. Scholz said he would call for a vote of no confidence in parliament on January 15, raising the possibility of elections earlier than planned in March.

“Anyone who joins a government must act responsibly and reliably; they cannot take cover when things get difficult,” Scholz said at the press conference, according to a Reuters translation. “You have to be prepared to compromise in the interests of all citizens… But that is not Christian Lindner’s focus, he concentrates on his own clientele.”

Both the FDP and the Greens confirmed late Wednesday that Lindner's departure would mean the end of the fractious coalition in Berlin.

The situation had worsened in recent weeks and speculation about a possible collapse increased earlier this week. This came after a series of moves by the three parties, including a paper by the FDP's Lindner outlining his vision for reviving the German economy – but most notably by arguing against fundamental positions of the SPD and the Greens.

The parties also had difficulty agreeing on a budget for 2025, which still had a financing gap of several billion euros and was still being negotiated. The budget deadline has been set for later this month.

Lindner said at his own press conference on Wednesday that his party had made proposals for economic change that were rejected by Scholz. He described Scholz's counter-proposals as unambitious.

“The Free Democrats are still ready to take responsibility for this country, and we will fight to do so in another government next year,” Lindner reportedly said, according to a CNBC translation.

Lindner said Scholz had called for a break in the German debt brake, which he could not accept. The German debt brake, which came into force in 2009, limits the state's borrowing and sets the maximum level of the federal government's structural budget deficit. The rules state that it cannot be more than 0.35 percent of the annual German GDP.