The collapse of its governing coalition is an extraordinary moment for Germany, a country known for stable governments. It has happened only twice before in the 75 years since the modern state was founded.
But like a marriage that has finally ended after years of fighting, the spectacular breakup on Wednesday night of Chancellor Olaf Scholz’s three-party coalition was expected by most and welcomed by many.
A recent national poll found that a majority of Germans wanted to end the “traffic light” coalition, named for the colors of the parties that made it up — red for the Social Democratic Party, yellow for the pro-business Free Democratic Party and green for the Greens. Only 14 percent still had confidence in the coalition, according to the same poll.
Although the opposition is pushing for Mr. Scholz to end the government sooner, Wednesday’s announcement will very likely lead to early elections in March, at a precarious time for Germany both domestically and internationally.
Here’s what we know about the collapse of the coalition.
How did we get here?
On Wednesday night, Mr. Scholz fired his finance minister, Christian Lindner, who is the head of the Free Democrats, over disagreements about the 2025 budget and the economy in general. That precipitated the end of the coalition.
The coalition was initially both successful and popular. But a constitutional court ruling late in 2023, barring the government from repurposing finances left over from the pandemic, spelled the beginning of the end.
Whereas the two progressive partners wanted to spend government money to kick-start the economy and carry out their agenda, the Free Democrats insisted on strict adherence to what’s known as the Black Zero, a debt ceiling enshrined in constitutional law that prevents borrowing large sums unless there is an emergency.
The German economy worsened and the government’s poll ratings tanked, leading to more infighting. Paralyzing disputes became the norm, carried out very publicly through debilitating leaks in the news media, which made the coalition ever less stable and popular.
What happens now?
The collapse of the coalition does not, for the moment, mean the collapse of the government. Mr. Scholz will continue to be chancellor, now in a minority government, until the end of the year.
He promised call a confidence vote in Parliament on Jan. 15. He will almost certainly lose the vote — without the Free Democrats he no longer has the support of the majority of lawmakers — and when he does he will ask the president to disband the government and set a date for a new election.
The new election has to take place within 60 days, during which Mr. Scholz is likely to remain chancellor of a caretaker government.
Given the time needed for parties to campaign, the most likely Election Day is toward the end of the 60 days: March 9. That would still be more than six months early. Elections were already scheduled for next year, but not until Sept. 26.
In the meantime, the Social Democrats and the Greens will hobble on, but will have to convince opposition parties to vote for their bills on a case-by-case basis.
On important issues like supporting Ukraine, strengthening the military and cracking down on irregular migration, the opposition and the government are united. So German policy is likely to remain the same.
As for next year’s budget, it faces a final hurdle next week — one it’s unlikely to pass. But unlike the United States, where a blocked budget leads to a government shutdown, in Germany, regular spending continues and no government employee has to go without a paycheck.
What are the risks?
The collapse of the coalition signals a new era of instability in German politics.
It was a measure of Germany’s fracturing political landscape that the coalition was the first requiring three parties since the 1960s. Since it came to power in 2021 after years of relative stability under former Chancellor Angela Merkel, that fracturing has only accelerated.
It is too soon to tell if President Trump’s convincing win in the United States could boost Germany’s far-right party, the Alternative for Germany.
In closely watched state elections in September, parties on both the far right and far left had their best showings ever. But mainstream parties still consider them anathema, which has made it hard to form governing coalitions in those states.
Those results could portend equally messy coalition haggling in Berlin after a national vote, although the political fringes are less popular nationally than they are in the eastern states that just voted.
Even before Germans get there, opposition parties are pushing for the election sooner, arguing that delaying the vote even until March will leave Germany adrift at a critical time when Mr. Trump takes office, the economy is stagnating and the war in Ukraine continues.
Mr. Scholz is unlikely to do that, however, hoping that the electoral prospects of his Social Democrats improve in the meantime. Recent polling puts them at 16 percent, and they look very unlikely to reach the nearly 26 percent they got in 2021, at the last federal elections.
But Mr. Scholz said on Wednesday that Germany needed clarity on its political future.
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