If you have a three-party coalition and one economic plan, you have at least the semblance of a working government.
But if you have a three-way coalition and THREE economic plans, what you have is Germany.
‘The sick man of Europe’ is on an economic slope since it abdicated from cheap Russian oil and began relying on much more expensive alternatives.
Chancellor Olaf Scholz leads an ideologically disparate coalition that can never agree on policy measures to ‘drive growth, protect industrial jobs, and reinforce Germany’s position as a global industrial hub.’
Because his government now has three plans, Scholz needs to meet the other two leaders, Green’s Robert Habeck and FDP Christian Linders.
Will he arrive at a compromise between the contradictory plans?
Reuters reported:
“A document leaked by Christian Lindner’s finance ministry in Berlin last week laid out a plan for tax cuts and fiscal discipline that political analysts interpreted as a challenge to the multibillion-euro investment program put forward by Economy Minister Robert Habeck days earlier.”
The enormous differences of economic and industrial policies have given birth to speculation about the coalition’s collapse.
“A government source told Reuters that Scholz and the ministers would hold several meetings in the coming days, saying that ‘now that everyone has submitted their paper, we have to see how they fit with each other’.”
That’s obviously easier said than done. The proposals are too different.
“Fiscal hawk Lindner has proposed scrapping the funds from the budget, while Habeck has said they could be reallocated.
[…] While Habeck wants the creation of a fund to stimulate investment and to get around Germany’s strict fiscal spending rules, Lindner advocates tax cuts to spur the economy and an immediate halt on all new regulation.”
As Greens and FDP bicker, Scholz’s SPD party is also distant from Lindner proposals.
“Opposition parties, including the conservative Christian Democrats (CDU) and the far-right Alternative for Germany, called for early elections on Sunday, with conservative parliamentary group manager Thorsten Frei telling newspaper Welt that this ‘would be the last service [the government] could render to our country’.”
If one of the parties exits the coalition, a parliamentary confidence vote takes place, after which the president can trigger elections.
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