Media reports German government in ‘crisis’


(MENAFN) Chancellor Olaf Scholz's government is grappling with significant internal divisions over its economic policy and the 2025 federal budget, with state broadcaster Deutsche Welle (DW) reporting that the tensions within the three-party coalition could lead to a full-blown crisis. The German parliament is set to pass the 2025 budget by the end of the month, but the government’s draft still presents a multibillion-euro deficit. Coalition partners are struggling to find common ground on how to address this shortfall, with the Budget Committee scheduled to review the final draft on November 14.

A recent policy paper from Finance Minister Christian Lindner, head of the Free Democratic Party (FDP), proposes sweeping changes to Germany's economic approach, including substantial tax cuts for businesses, as well as cuts in climate protection funding and welfare programs. This plan has been met with strong opposition from Scholz’s Social Democrats (SPD), who argue that the government needs to focus on immediate action to support industry and security, rather than controversial policy papers.

Meanwhile, Economy Minister Robert Habeck of the Green Party has suggested creating a debt-financed 'Germany Fund' to stimulate investment and promote a transition to a climate-neutral economy. However, Lindner and the FDP are opposed to this proposal, further deepening the rift within the coalition.

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