Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Germany will hold snap elections on February 23, under a new plan agreed on Tuesday between Chancellor Olaf Scholz’s Social Democrats and the centre-right opposition.
Under the deal, Scholz will table a confidence vote in his government on December 16, according to a person familiar with the matter. He had originally planned to do so in mid-January, but came under pressure from the opposition to speed up the process.
Friedrich Merz, leader of the opposition Christian Democratic Union, and SPD parliamentary leader Rolf Mützenich had already discussed the new plan with German President Frank-Walter Steinmeier, who under the country’s constitution is responsible for scheduling snap elections.
The German government collapsed last Wednesday after Scholz sacked his finance minister, Christian Lindner, marking the climax of a long-running dispute over the direction of economic policy.
Scholz moved against Lindner, a fiscal hawk, after the latter rejected his demand to suspend Germany’s “debt brake”, its constitutionally anchored cap on new borrowing, to allow more aid for Ukraine.
The SPD and its coalition partner the Greens had long locked horns with Lindner’s party, the pro-business Free Democrats (FDP), over the issue of debt, arguing that Germany should borrow more to invest in infrastructure, the armed forces and helping Ukraine.
The FDP said incurring more debt would burden future generations, adding that the government should focus instead on getting public spending under control and reducing corporate taxation.
When he announced Lindner’s dismissal, Scholz proposed a confidence vote on January 15. Without a parliamentary majority he is expected to lose that, paving the way for elections he suggested could be held in March.
But Merz insisted the election be held earlier, saying Germany could not afford a long period of political uncertainty.
In a TV interview on Sunday evening, Scholz showed flexibility on the timing issue, saying he had “no problem” holding the confidence vote before Christmas, rather than in January.
If Scholz loses the December 16 vote, Steinmeier will have 21 days to decide whether to dissolve the Bundestag. If he decides to do so, he is also responsible for setting the date of early elections, which according to the constitution must be held within 60 days of the parliament’s dissolution.
A February 23 vote would mean that Germany will go to the polls seven months earlier than scheduled. Scholz, who polls suggest has little hope of being re-elected, will be one of the shortest-serving chancellors in Germany’s postwar history.