Support for the German government is waning. Economic pressures and criticism from all sides are casting doubts on the coalition’s future. On Tuesday, government parties met with major players in German industry to discuss ways to support the economy. However, it wasn’t a unified summit but rather two competing meetings.
The meetings followed a shocking announcement from carmaker Volkswagen on Monday: three out of ten of its domestic factories will close, which will lead to the loss of tens of thousands of jobs. According to Tagesschau, Volkswagen’s works council stated, “No factory can consider itself safe.”
Traffic light coalition under pressure
The current coalition, nicknamed the “traffic light” due to the colors of its parties, is under strain. The coalition comprises Chancellor Olaf Scholz’s Social Democratic Party (SPD), the liberal Free Democratic Party (FDP), and the Greens.
It’s only been three months since the government announced 49 growth initiatives aimed at reviving the economy. Yet, not all measures have been implemented, and, according to Tagesschau, it’s already clear that they won’t suffice.
Persistent structural crisis
On Tuesday, Martin Wansleben, head of the Association of German Chambers of Commerce and Industry (DHIK), stated that the economy likely won’t recover next year, according to the dpa news agency. “We’re not just facing an economic crisis, but a prolonged structural crisis in Germany,” he said. DHIK predicts that Germany’s GDP, or total economic output, won’t grow in the coming year – marking the third consecutive year of stagnation.
Several German business leaders foresee worsening conditions, blaming the country’s notorious bureaucracy as a primary obstacle to economic growth.
On Tuesday, Scholz invited trade associations, unions, and large companies to discuss initiatives to strengthen and modernize Germany’s industrial landscape. Simultaneously, the FDP, led by Finance Minister Christian Lindner, held its own meeting with Germany’s industrial sector.
Inviting the SME
Highlighting the rift between coalition parties, the FDP invited precisely those segments of the industry – small businesses and family enterprises – that Scholz hadn’t included.
Opposition leader Friedrich Merz, head of the conservative CDU, has criticized the coalition’s actions as “childish games.”
– The government is no longer capable of action. It has reached the end of the road, Merz said. Social media has also been abuzz with criticism.
– The traffic light coalition is busy with childish summit ping-pong. Enough talk – we need action, posted CDU’s Jens Spahn, who served as health minister during the pandemic, on X.
Tensions are also rising within the coalition. SPD Bundestag leader Rolf Mützenich called the FDP’s counter-summit “silly” and accused the party of obstructing the chancellor’s efforts.
Green confusion
The coalition’s third member, the Greens, has added to the confusion over the government’s economic plans. Despite all three parties crafting the 49 measures together, Economics Minister Robert Habeck from the Greens shortly afterward introduced additional proposals. However, these weren’t coordinated with the other coalition parties and were immediately blocked by the FDP.
According to Der Spiegel, the trio of Robert Habeck (Greens), Christian Lindner (FDP), and Olaf Scholz (SPD) had been the coalition’s last unifying force.
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