Traffic light government could be dissolved today

The German government has been in crisis for a long time and has been criticized. It will now be clear in a meeting whether we want to continue working together or whether traffic lights will soon become a thing of the past.

this is what it means

After weeks of wrangling over budget and economic policy, the leaders of the SPD, Greens and FDP today wanted to clarify whether there are still grounds for further cooperation. A joint committee meeting in the evening will discuss how to fill the multi-billion-dollar gap in the 2025 budget and how to get the battered German economy back on track.

Prior to the review, Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP) and Robert Habeck (Green Party) held two rounds of preparatory meetings, interrupted by a cabinet meeting. They have met on Monday and Tuesday to try and present a common opinion to the league committee. If they can do that, the big evening meeting with party leaders is likely to be just a formality. If they don't agree, the traffic light is over.

Preliminary situation

Lindner announced the league’s “fall decision” not long ago. He was mainly referring to next year's budget, which will be passed by the Bundestag on November 29. He is also concerned about strategies to guide Germany out of its economic crisis. His suggestions led to an escalation of disputes within the alliance. In his concept for economic recovery, Lindner calls for the eventual removal of the solidarity surcharge, even for high earners, and changes to climate policy.

There is considerable resistance to this idea from the Social Democrats and Greens. Habeck also took a step towards Lindner. He agreed to use billions of dollars freed up by delayed construction of Intel's Magdeburg plant to plug budget holes. “Now I also want others to give advice in their own fields,” he said later.

Scene 1: Traffic lights come together

Scholz, Habeck and Lindner have been looking for a solution since Monday and have the support of Chancellor Wolfgang Schmidt (SPD) and the two state secretaries. If they reach an agreement today, and then approve it by the joint committee, the 2025 budget would still have to pass the Bundestag. A key adjustment meeting of the Budget Committee will be held on November 14, with final details to be clarified. Two weeks later, the plenary session takes a vote. If both go well, Traffic Light will overcome the most difficult obstacles and continue to rule. However, other differences remain, such as controversial pension plans or immigration policy.

Scene 2: The traffic light has reached its end

If an agreement is not reached on Wednesday or Thursday night, there is a risk that the traffic lights will be turned off. One possibility is that the Liberal Democrats leave the government. In theory, FDP ministers could also be fired by an angry Chancellor Schulz. But this is thought to be much less likely.

So far, Scholz doesn't seem to be losing patience. On Tuesday, he renewed his appeal for unity among his coalition partners, in a somewhat complicated way. “Obviously this is going to work,” he said. “In this regard, the question is not whether it can be done, but whether it is possible. Now everyone has to work hard.”

After the traffic lights go out: minority government or new elections

When a traffic light suddenly bursts, what happens next? If the FDP leaves, the SPD and Greens will face the question of whether to govern without a majority in parliament or call for new elections. In the case of a minority government, every decision taken by the Red-Green coalition in the Bundestag will depend on the support of the opposition. However, the coalition is pushing for an early federal election, so cooperation is unlikely. Therefore, the remaining government is more likely to initiate new elections sooner or later with a vote of confidence from Chancellor Scholz.

Negotiations under the influence of the US election

The outcome of the U.S. election will play a not entirely unimportant role in Wednesday's negotiations. If Donald Trump is elected president for a second time, it will create uncertainty around the world and could increase the coalition's willingness to reach a deal. The new electoral formula, with a possible election date early next year, means that in the first months of the Trump administration, Germany will enter first an intense campaign phase and then a coalition negotiation phase, and will be able to take only a limited range of actions. .

(Sudan Development Authority/Department of Political Affairs/Associated Press)

German Chancellor Olaf Scholz believes it is still possible for his “traffic light” coalition to agree on a common position.