The Traffic Light Coalition finally blew up. What’s ahead?Image clip from Twitter Video.Government CollapsedThe three-way traffic light coalition, named after party colors, finally blew up when Chancellor Olaf Scholz Fired his Finance Minister triggering a vote of confidence.

Scholz’s center-left government was the first to be formed after the retirement of Chancellor Angela Merkel, who anchored European politics for 16 years. Scholz’s “traffic light” coalition — named after the colors of his Social Democrats (SPD), the Greens and the neoliberal Free Democrats (FDP) — has been in power since 2021.

But it was precarious from the start. After a short-lived honeymoon on sparse common ground, ideological divisions emerged. The parties have been engaged in months of infighting — while the German economy stagnated, the coalition parties sank in public opinion polls, and the far-right Alternative for Germany (AfD) party drew historic gains in state elections.

It was a budget fight that ultimately brought everything down.

To fill big gaps in next year’s budget, Scholz’s SPD and the Greens have favored state- and debt-financed policies. The FDP, though, is an ardent proponent of the “debt brake.” Enshrined in the constitution, designed to force balanced budgets, the debt brake can be suspended only in exceptional circumstances — most recently in response to the coronavirus pandemic and Russia’s 2022 invasion of Ukraine.

Scholz said Wednesday that FDP leader and Finance Minister Christian Lindner had been dismissed after rejecting economic proposals.

“The finance minister shows no willingness to implement the offer for the good of our country. I do not want to subject our country to such behavior any more,” Scholz said, visibly irritated. Scholz alleged that “Lindner only cares about the survival of his own party.”

Speaking soon after, Lindner shifted blame to the chancellor. “Olaf Scholz has played down the economic concerns of the citizens,” he said. “His counterproposals are dull, unambitious and do nothing to combat the weak growth.”

Lindner said he could not agree to Scholz’s demand to suspend the debt brake and had proposed fresh elections, which Scholz “brusquely rejected.”

Snap Elections?Not necessarily, even if the confidence vote fails.The German president, largely a ceremonial position gets the call to accept or deny a snap election.Deliberately Lose a Vote?How It Works✍️ German chancellors don’t have the power to call an early election, which lies with the federal president, but they can try to trigger one by deliberately losing a confidence vote in the lower house of parliament.✍️ Once Scholz fails to garner a majority in the Jan. 15 ballot, he can ask President Frank-Walter Steinmeier, a former Social Democrat vice chancellor, to step in and dissolve parliament. The election would then have to be held within 60 days. (BBG)German Polls The only thing an election will do is shift the power from one very unstable coalition to another very unstable coalition.It takes 5 percent to have representation and FDP might not make the threshold. Far Left party Die Linke likely not have representation.All of the parties rule out an alliance with AfD and BSW. Combined, that is about 26 percent of the total.The last Grand Coalition (SPD and Union) nearly collapsed and this go around would might not even have a majority. Union is CDU/CSU.The German and French governments are both nonfunctional.Meanwhile, back in the US …Please consider Why Trump Won the Election in One Clear PictureVoters are angry everywhere, for obvious reasons, but few can figure out why.The Brookings Institute Wonders Why Consumer Sentiment is So Bad, I Can HelpOn November 5, I wrote The Brookings Institute Wonders Why Consumer Sentiment is So Bad, I Can HelpPlease check it out. I posted ten charts and dozens or reasons why consumer sentiment is bad.Throw the bums out is not just a US thing. It’s happening all over Europe too.More By This Author:Models Vs Humans: Models Can’t Think, But People Think About The Wrong Things The Brookings Institute Wonders Why Consumer Sentiment is So Bad, I Can HelpNo Matter Who Wins The Election, Expect The Cost Of Microchips To Soar