Jaqueline Katherina Singh
Wednesday, 6 November, 9:25 p.m.: Olaf Scholz, Germany’s Chancellor, appears on camera in the Federal Chancellery. In his usual dry manner, he explains what the media had reported as an urgent message just a few minutes earlier: as Chancellor, he has dismissed Finance Minister Christian Lindner from his office. This step was necessary, he explained, to divert damage away from Germany and prevent it from descending into chaos. Lindner’s uncompromising attitude had not served the country, but rather the interests of his own party. Offensive words that come as a bit of a surprise from the Social Democratic Chancellor – after all, they mean the end of the coalition government. What is going on and what lies behind the government crisis?
What has happened?
One can recall Lindner’s words „Better not to govern at all than badly“. For months there has been crisis, there have been many side swipes from the opposition, as from Markus Söder. Even Friedrich Merz of the Christian Democrats tried hard to drive the government forward. The list of disputes is long: heating law, investment funds, child benefit, citizen’s income and finally the question of the budget. Time and again, the governing parties have blocked each other and tried to advance their positions through public statements. Since September, the cracks have become even more apparent. Lindner published an 18-page paper bypassing his colleagues for an economic policy that is quite different from the one set out in the coalition agreement.
And yet, the end came a bit suddenly. After Trump’s election, Robert Habeck of the Greens and Scholz still tried to feign unity, declaring that Germany must now show its ability to act. If Lindner’s words are to be believed, he too seemed quite surprised that after months of nagging from the liberals and public exposure of the former „partners“, the coalition did not end in such a way that they could jointly and „dignifiedly“ announce new elections, but rather that he was dismissed as minister. Whether this is staged or not is irrelevant. What is clear is that this path has something positive for the SPD and FDP at least: they can now try to blame the end on each other.
So, there were standing ovations for Scholz in the SPD parliamentary faction for breaking with the FDP. The FDP, in turn, stood by its leader, at least publicly. The Greens, on the other hand, appeared the least prepared, as they are themselves in the process of appointing a new leader. For them, the foreseeable, premature collapse of the coalition comes at the worst possible time – and it showed.
The core of the disputes
It is therefore not surprising that Scholz used his speech to kick-off the SPD’s election campaign. He outlined his four point plan to prevent the country from descending into chaos: 1. Capping network fees for „our“ companies; 2. Securing jobs in the automotive industry and at suppliers; 3. Investment bonuses and tax write-off options for companies; 4. Support for Ukraine, independent of the USA.
If you compare the speeches of the SPD, the Greens and the FDP from yesterday evening, it quickly becomes clear where the differences lie: their positions on the constitutional limit on government borrowing, the so-called “debt brake”. This must be lifted in order to provide the funds for more economic development, further rearmament and arms deliveries by increasing government debt, while also having funds available for social cushioning against the recession and the massive restructuring of companies.
The early collapse of the coalition thus highlights the crisis of the bourgeois party landscape in the face of the poor economic situation in Germany. The central question is who should pay for the costs (and what debts should be incurred for in the first place). The FDP actually has no differences with the SPD on the course of rearmament and militarisation; it is actually even more warmongering – but for them this should not be paid for by new debt, but by rigorous social cuts in the citizen’s income, for refugees, the retirement age and the „over-regulated“ employment relationships.
The FDP has clear ideas on this, which Lindner also presented in his „leaked“ paper. Planned attacks on the right to strike, cold-blooded enforcement of the debt brake, further cuts in the social sector. The working class and the oppressed are to pay – and in full, not in stages, as the SPD and the Greens have in mind. Under no circumstances should there be tax increases for companies.
The SPD and Greens, on the other hand, stand for a transformation in the classic Keynesian style: it is better to take on more debt and, as Scholz said, not to play off „internal and external security“ against each other. In other words, to pursue the interests of German imperialism but with some social camouflage.
Since the FDP has fallen to below 5% during the coalition period and has made spectacular belly flops in all state elections, this debate is also a question of its very existence. The party itself has undergone an internal right-wing shift in recent months, with Lindner’s leadership also being called into question by initiatives such as „Wake-up call FREEDOM”, and no easing on the debt brake, even if it means accepting that the coalition will break up – that is a commitment to its own voters, which the SPD and the Left Party have been lacking for years.
Likewise, the differences in orientation between social democracy and liberalism have always existed. The fact that it is leading to a government crisis therefore has deeper causes than the FDP’s loss of votes.
Distribution crisis as an obstacle to investment
When the „progressive“ coalition came together, there was no war in either Ukraine or in Gaza. In this sense, the coalition is also a victim of the turning point in history that Scholz himself proclaimed at the time. In the midst of war, inflation and recession, it is not easy to be generous. At least not if you limit yourself to pursuing realpolitik in parliament and have the interests of the ruling class, idealised as „our economy“, firmly in view.
The background to the distribution crisis is the economic development since the 2007–2008 financial crisis. Even if it was possible to slow this down by counter-cyclical measures and the expansion of credit and debt, it was only at the price of continuing its causes – falling rates of profit and over-accumulation of capital. With the synchronised global recession resulting from the coronavirus pandemic and the war in Ukraine, the situation for German imperialism, which had previously held up quite well, has worsened. The export nation has been hit hard by rising energy prices. In addition, there is competitive pressure and the pressure to innovate in one of the core sectors of German industry, the automotive industry. We have examined the current situation in more detail in the article ‚Gloomy Clouds‘.
The result is that the current recession, in combination with the economic development of recent years, has massively reduced the leeway for the social partnership that has been established in Germany to date, thus also calling into question the political and economic relations between classes.
Factionalism in the German bourgeoisie
Another effect of this development is the international shift to the right. In the wake of the crisis, competition between different factions of capital has increased and the situation of the petty bourgeoisie and the wage-dependent middle classes is becoming more uncertain and unstable, which in Germany, for example, has led to the founding of the AfD. At the same time, during the Merkel era, German imperialism tried to manoeuvre in international politics between the USA on the one hand and Russia and China on the other, which itself reflected differences within the ruling class regarding the strategic orientation of the Federal Republic and the EU. This has become more difficult with the increase in inter-imperialist confrontations and bloc-building.
The war in Ukraine marks a turning point here, because a strategic alliance with Russia, as Kohl and Schröder, but also parts of Merkel’s governments, had sought, has receded into the far distance. However, this does not have to remain so, because Trump’s victory in the US elections naturally also calls into question the transatlantic orientation of both Germany and the EU. The problem is clearly evident in the policy on Ukraine. On the one hand, support for Ukraine is guaranteed like a mantra and the CDU/CSU are still calling for it to be expanded. On the other hand, Germany itself cannot, of course, replace the USA and a permanent war in Europe is actually more of a burden than a strategic advantage (as the Alternative for Germany, AfD, and the Sahra Wagenknecht Alliance, BSW, think openly, and parts of the SPD and CDU more covertly).
Even if the current traffic light parties and the CDU avoid redefining it before new elections, it is difficult to imagine that the EU could enforce an alternative policy to a pacification under Trump in alliance with Putin. The assertions of support for Ukraine are therefore contradictory. They are trying to present themselves as its „humanitarian“ protective power, while at the same time they have initiated the takeover of the country’s economy and the reconstruction of western Ukraine by German and US capital in recent years. They definitely want to rearm Ukraine on the front line with Russia (which would then effectively run through its former territory). On the other hand, a lasting war cannot be afforded economically, politically and militarily without the USA supporting it.
Quite apart from the situation in Ukraine, however, it will lead to a massive acceleration of European rearmament (including a possible debate about the „nuclear independence of the Federal Republic“), to a new attempt to make the EU arms industry more competitive and thus, in the longer term, to strengthen Europe, that is, German hegemony in the EU. However, the problem of the German bourgeoisie is also that it has no real common strategic vision of how these policies can be implemented – and this conflict ultimately also ran through the coalition government, which also failed because of these contradictions.
What happens next?
FDP faction leader Christian Dürr announced on Wednesday evening that all ministers from his party wanted to submit their resignations to the Federal President as a group. This is happening, apart from Transport Minister Wissing (now an independent), all of them are leaving. For some, like Education Minister Bettina Stark-Watzinger, this may be to avoid further scandals. Scholz himself wants to put the vote of confidence in the first week of the Bundestag’s session in the new year, i.e. on 15 January 2025. This should then enable new elections at the end of March. The SPD wants to introduce the most important draft laws by Christmas. It is therefore planning for a Red-Green minority government which it would also allow it to use the Bundestag as an election arena for itself.
Whether or not this is feasible depends to a large extent on the mercy of the CDU. Merz would prefer new elections now, since he is one of the people who will benefit most from them, and he himself can hardly wait to court Trump as a future member of the government (preferably as Chancellor) and somehow also to safeguard German interests – for example, by supporting his plans for peace in Ukraine. Whether the Scholz plan will work out that way remains more than open.
The others will benefit
In the past, Merz was very good at staging himself and driving the government forward. According to the Bild newspaper, the CDU/CSU have been preparing for early elections for two weeks. And the first business associations, such as the foreign trade association BGA or the chemical industry association, immediately agreed with Merz’s call for quick new elections.
Of course, Wagenknecht is not to be left out of the chorus: after all, the question of government for her Alliance is arising in Brandenburg and Saxony, and coalition negotiations can be conducted much better if the force is also more strongly represented in the Bundestag. And the sooner they take place, the sooner Sahra can stop worrying about where she really has to be consistent in order to get enough votes from voters.
The AfD will benefit massively, if not most of all. Not only because it can take the line that it „has always“ hated the coalition, but also in terms of peace. Because, while the SPD and the Greens, but also the CDU/CSU and the FDP, will continue to sound the war horn, the AfD and BSW will pose as peace parties in Ukraine, while at the same time continuing to assure Israel of their solidarity.
The Left Party will have the hardest time. Not only has van Aken’s (the new chairman of the party) appearance in Ukraine created more questions than clarity about how to actually achieve peace, but the party’s organisational structure is currently in complete disarray. It might have been able to pull itself together for a federal election in September, but early elections make it more likely that it will be out of the running at this point.
What’s left?
The next election and the formation of a government in Germany will determine which course will be taken. One thing is clear: there will be social attacks, whether or not the SPD and the Greens cushion the blow. That is why it is necessary not just to wait passively for the election and the consolidation of a new government. Rather, we must now say clearly: we will not pay for your wars and crises! No more social partnership, no to mass layoffs and debt brake!
Even now, state and municipal governments are making cuts, especially in the social sector. And the hospital reform is not the only area to see job cuts and layoffs, as in the automotive industry. To successfully repel these attacks, the trade unions, in particular, need to break with the policy of class collaboration. There needs to be an action conference against the crisis, at which the left in Germany discusses the demands with which it can point the way out of the current plight – in collective bargaining rounds and through independent action.
And we need a discussion about what kind of party, what kind of programme, what kind of politics we need against the crisis. The collapse of the “traffic light” coalition, the decline of the SPD and the Left Party make it clear that we must not only build organised mass resistance. At the same time, we must fight for a revolutionary alternative to reformism, for the construction of a revolutionary workers‘ party.