After months of bitter infighting, German Chancellor Olaf Scholz’s fractious three-way coalition finally broke apart on Wednesday
John MACDOUGALL
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The political crisis in powerhouse Germany spells uncertainty for Europe at a critical time, but the prospect of new elections may ultimately be welcome news for Berlin’s EU allies frustrated by its chronic instability.
Faced with Donald Trump’s return to the White House, wars in Ukraine and the Middle East and an economic slowdown, the EU now more than ever needs a stable Germany to ensure a united response.
“We have very important issues on the table,” Finnish Prime Minister Petteri Orpo said Thursday at the start of two days of meetings with European leaders in Budapest. “We need a strong and united German government, and we need a strong Germany in the European Union.”
After months of infighting, German Chancellor Olaf Scholz’s fractious three-way coalition collapsed Wednesday night after he sacked his finance minister Christian Lindner from the liberal Free Democrats (FDP).
EU diplomats admitted that with a volatile Trump in office again, the crisis was deeply unwelcome but believed in the longer term, it could better unite the bloc.
For EU institutions in Brussels, the coalition’s frequent feuds and inability to agree was a thorn in their side, with Berlin often abstaining in votes on key issues.
“In the short term this is an unwanted distraction, at a time when Europe could do with a healthy dose of unity and decisiveness. In the medium to long term this could be a blessing in disguise,” an EU diplomat told AFP.
“This government was completely indecisive on EU issues. So we had a weak Germany even with a stable government. The sooner this ends, the better,” another said.
German Green Vice-Chancellor Robert Habeck insisted the government “can naturally continue to do its job well”.
“Especially in foreign policy, we are fully able to act in European (meetings) and international summits — G7, G20,” Habeck said Thursday.
Yet in practice, the unfolding crisis meant Scholz was expected to arrive late Thursday in Budapest, missing almost a full day of meetings with his European counterparts.
There is optimism for what a new German government could bring.
It could help fix the cracks in relations between France and Germany, the bloc’s two largest economies and the driving force of the EU.
The two countries have diverged over some of the biggest issues affecting Europe including energy and trade.
For example, while France pushed for extra tariffs on Chinese-made electric cars, Germany voted against — although the duties entered into force regardless last month.
“The policies of this German government certainly have led to quite a dissonance between Germany and France and also Germany and Poland,” said Guntram Wolff, senior fellow at Bruegel think tank.
“The German government hasn’t been terribly successful in bringing major European countries together,” he added, in contrast with the previous government.
“Scholz was never very EU-minded. A new chancellor might change that and it could also be a way to restart the Franco-German axis, which would be very welcome to the EU as a whole,” an EU diplomat said.
But some warned of the risks stemming from the rise of the far-right in Germany.
Sylvie Matelly, head of Institut Jacques Delors think tank, said the hope was that the next government would be “more coherent” and “therefore finally capable of having more clear-cut positions on European initiatives”.
And while she acknowledged that from Brussels’ point of view, it was “hard to imagine worse” than the current government, Matelly warned the far-right AfD could score well in the next elections, spelling “uncertainty” over its influence going forward.
Germany’s political mess comes at a gruelling time for the EU economy.
The bloc’s leaders will on Friday discuss radical reforms proposed in a blockbuster report by ex-European Central Bank chief Mario Draghi, published in September.
But Draghi’s proposals are controversial: they include common borrowing — which Germany’s FDP vehemently opposed — and ploughing up to 800 billion euros ($862 billion) of additional annual investment into the EU economy.
European diplomats were especially glad to see the back of the frugal Lindner.
“With Lindner there, there was no way to have a discussion about an ambitious long-term budget or the need to strengthen defence financing on EU level,” an EU diplomat said.
Yet with Germany now mired in domestic squabbles and a looming election, it will be unlikely for the leaders to agree on any concrete steps to stimulate Europe’s economy.
They were expected to give “impetus” to Draghi’s report, an EU diplomat said, “but Scholz will not be able to engage a future government on sensitive issues such as common financing”.
