German Chancellor Olaf Scholz lost a vote of no confidence on Monday, paving the way for early elections in February and ending a turbulent year at the polls for several of Europe’s leading parties.
Scholz called Monday’s vote with the expectation of losing it, but with the hope it would boost the fortunes of his center-left Social Democratic party.
He needed a 367 majority vote to win, but only 207 members of the Bundestag or parliament were willing to back him. A total of 394 lawmakers voted against him and 116 abstained.
The coalition that Scholz presided over fell apart last month after Scholz fired Finance Minister Christian Lindner a member of the Free Democrats party, which his party had been in a fractious coalition with along with the environmentalist Green Party.
Scholz accused Lindner of violating his trust at the time after Lindner publicly backed a different economic policy than the one they had previously agreed upon.
Scholz then announced he’d call for a no-confidence vote, knowing he would have to dissolve parliament and hold new elections within 60 days.
The confidence vote was needed because post-World War II Germany, the constitution does not allow to dissolve itself.
Germany has the largest economy in Europe but has fallen stagnant in recent years, with leaders struggling to agree on a 2025 budget. The ruling coalition had weeks of infighting over future economic policy prior to Lindner’s firing.
Kallum Pickering, chief economist at Peel Hunt, a leading British investment bank, told CNBC that Germany’s leaders are likely going to find agreement on fiscal policy regardless of the new election results.
“Even if within say the first three to six months of the new administration you don’t get changes to the debt brake, if they have a big enough majority, eventually I think economic conditions will just force them to accept the reality that they need a fiscal stimulus,” Pickering said.
Germany’s snap elections come after the Labour Party won power in the U.K. for the first time in over a decade and French President Emmanuel Macron called snap elections in France which led to political turmoil in the country.
This is a developing story. Please check back for updates.
This is a developing story. Please check back for updates.
