German Chancellor Olaf Scholz walks after his speech in the lower house of parliament, the Bundestag, in Berlin, Germany on November 13.
| Photo Credit: REUTERS

The story so far: On November 6, Germany’s ruling ‘traffic light’ coalition, composed of the Social Democrats (SPD), the Greens and the Free Democrats (FDP), collapsed when Chancellor Olaf Scholz fired his Finance Minister, FDP’s Christian Lindner. A no-confidence motion against the government will be initiated on December 16, which Mr. Scholz is sure to lose without the support of the FDP. Therefore, Mr. Scholz has agreed to hold snap elections on February 23, 2025 ahead of the scheduled election in September 2025.

What happened?

Germany’s current ruling coalition, which came to power in 2021, has been one of the most ineffective coalitions that the country has seen. Constant infighting over key issues such as the budget agreement, war with Ukraine, defence and energy spending has brought about a dysfunctional governance model.

While the Chancellor’s SPD and the Greens want heavy state investment by increasing government borrowing, Mr. Lindner’s bro-business party has rejected the same by espousing strict adherence to Germany’s debt brake rule which prohibits borrowing beyond a set limit. Further, the FDP has asked for tax cuts for the wealthy, and austerity measures both of which have been staunchly opposed by the other two coalition partners.

The looming multi-billion dollar gap in the federal budget is yet another thorn on the side of the government.

What is Germany’s debt brake rule?

Germany’s debt brake rule limits the EU country’s borrowing to 0.35% of its GDP. This limit, written into Basic Law (German Constitution), effectively means that the government has to try to balance its books every fiscal year, that is, it can only spend what it makes via taxes and levies. This rule was written into the law in 2009 after the 2008 economic crisis to bring public finances back under the control of the government. The debt brake limits indiscriminate government borrowing which would later translate to huge interest and fall as a burden on future generations. While it had been opposed then by the Greens and other opposition parties as limiting the government’s ability to spend and act, it became legally binding for the federal government and the states in 2016 and 2020, respectively. No other EU country has such strict borrowing rules.

However, there is an exception clause “which allows the Bundestag [German Parliament] to suspend the debt brake by a simple majority in the event of a natural disaster or other extraordinary emergency situations beyond the control of the state.” The Bundestag has already used this exception from 2020-2022 citing the COVID-19 pandemic and the onset of the Ukraine-Russia war which caused the energy crisis in the country — Germany has been one of the strongest defenders of Ukraine in the EU, with funds for Ukraine’s security capacity building initiative in 2024 alone amounting to approximately 7.1 billion euro. However, this has led to Germany cutting/weaning off from Russian energy causing an energy crisis in the country, the effects of which are still felt in the economy.

What about the budget?

To work around the debt brake and to finance its fiscal needs, Germany has a list of various off-budget ‘special funds’ which it uses for economic spending without breaking the debt limit. Some of these funds include the climate and transformation fund, the economic stabilisation fund, the federal armed forces fund etc. The ruling coalition was depending on these funds to get them through the increased commitments to climate initiatives and defence spending.

However, on November 15, 2023, a constitutional court ruled that transferring unused pandemic era debt of around 60 billion euros to one of the funds, specifically the climate and transformation fund, was unconstitutional. This had blown a hole into the federal budget and further stressed a coalition already frayed by ideological differences.

What next?

The leader of the opposition alliance, composed of the Christian Democratic Union (CDU) and the Christian Social Union (CSU), Friedrich Merz is leading in opinion surveys. A poll conducted by Forsa, wherein they asked citizens who they would vote for if there was an election next Sunday, showed the opposition alliance leading at 33% as compared to the SPD’s 16%.

However, AfD, the far-right party of Germany, is also gaining influence in the country. The anti-immigrant party recently won the election in the eastern state of Thuringia, its first state election since the Nazi-era. According to Forsa, AfD’s approval rates are at 17%, higher than the SPD’s.

The AfD has been accused of having extensive networks with neo-Nazi groups. A former AfD member of the German parliament is currently in custody for alleged involvement in the planning of a coup. There is even a proposal to file a motion to ban the AfD. Therefore, while the AfD are unlikely to lead government, the party could get a larger seat share in the Bundestag. AfD has opposed all arms shipment to Ukraine and similar to U.S. president-elect Donald Trump has called for strict rules against irregular migration and open borders.

The far-right Alternative for Germany (AfD) political party is currently leading in polls in both Saxony and Thuringia.
| Photo Credit: Getty Images

Voters in two former East German states go to the polls Sunday (September 1, 2024) in elections expected to deal a blow to Chancellor Olaf Scholz’s government and deliver big gains for the far-right Alternative for Germany (AfD).

The polls in Thuringia and Saxony come just over a week after three people were killed in a suspected Islamist attack, which has fuelled a bitter debate over immigration in Germany.

Opinion polls have the anti-immigration Alternative for Germany (AfD) ahead in Thuringia and a close second in Saxony, while also predicting a strong showing for the upstart, far-left political party, Bundnis Sahra Wagenknecht (BSW).

Also Read: Germany’s far right gets a boost from past traumas haunting industrial east

The two parties have found a receptive audience in the eastern states for their criticism of the Government in Berlin and of military aid to Ukraine.

An election victory for the AfD would be a landmark in Germany’s post-war history and represent a rebuke for Mr. Scholz ahead of national elections in 2025.

In both states, Mr. Scholz’s Social Democrats are polling around six percent, while their coalition partners, the Greens and the liberal FDP, lag even further behind.

Also Read: Olaf Scholz promises new weapons controls after Germany knife attack

But even if the AfD does come out on top in the elections, it is unlikely to come to power because other parties have ruled out working with the far right to form a Government.

Voting in both regional elections will start at 8:00 am local time (06:00 GMT), with polling stations closing at 6:00 p.m.

Far-right rise

The ballot-counting will start immediately after voting ends, with the first exit polls expected shortly after.

Created in 2013 as an Anti-Euro group before morphing into an anti-immigration party, the AfD has capitalised on the fractious three-way coalition in Berlin to rise in the polls.

In June’s EU Parliament elections, the party scored a record 15.9% overall and did especially well in eastern Germany, where it emerged as the biggest force.

Saxony is the most populous of the former East German states and has been a conservative stronghold since reunification.

Thuringia meanwhile is more rural and the only state currently led by far-left Die Linke, a successor of East Germany’s ruling communist party.

Also Read: Far-left rebel seeking peace with Vladimir Putin rocks German politics

A third former East German state, Brandenburg, is also due to hold an election later in September, where polls have the AfD ahead on around 24%.

The picture in each state is slightly different but “in any case, it is clear that the AfD will unite a very strong number of votes behind it”, Marianne Kneuer, a professor of politics at the Dresden University of Technology (TU Dresden), told AFP.

New challenger

The AfD has found stronger support in the east where more voters “identify with its nationalist and authoritarian positions” and many are dissatisfied with the mainstream parties, according to Ms. Kneuer.

The same currents have fed support for BSW, founded in January by the firebrand politician Sahra Wagenknecht after she quit Die Linke.

Like the AfD, Ms. Wagenknecht and her party have made hay with a dovish stance towards Russia and calls for a radical crackdown on immigration.

BSW scored an immediate success in June’s European elections, hauling in some six percent of the German vote, and is polling a strong third in Saxony and Thuringia.

Other parties’ refusal to work with the AfD leaves BSW as potentially the kingmaker in Thuringia and Saxony, despite serious policy disagreements with potential partners — especially on Ukraine.

The run-up to polling day in Saxony and Thuringia has however been dominated by outcry over immigration stirred up by the deadly stabbing in the western city of Solingen.

The alleged attacker, a 26-year-old Syrian man with suspected links to the Islamic State group, was slated for deportation but evaded attempts by authorities to remove him.

The government has sought to respond to the alarm caused by the incident by announcing stricter knife controls and rules for migrants in Germany illegally.

The conservative CDU, which holds hopes of winning both elections, has said the initial measures do not go far enough and urged a halt to arrivals from Syria and Afghanistan.

Berlin:

A 17-year-old has turned himself in to police in Germany after an attack on a lawmaker that the country’s leaders decried as a threat to democracy.

The teenager reported to police in the eastern city of Dresden early Sunday morning and said he was “the perpetrator who had knocked down the SPD politician”, police said in a statement.

Matthias Ecke, 41, European parliament lawmaker for Chancellor Olaf Scholz’s Social Democrats (SPD), was set upon by four attackers as he put up EU election posters in Dresden on Friday night, according to police.

Ecke was “seriously injured” and required an operation after the attack, his party said.

Scholz on Saturday condemned the attack as a threat to democracy.

“We must never accept such acts of violence,” he said.

Ecke, who is head of the SPD’s European election list in the Saxony region, was just the latest political target to be attacked in Germany.

Police said a 28-year-old man putting up posters for the Greens had been “punched” and “kicked” earlier in the evening on the same Dresden street.

Last week two Greens deputies were abused while campaigning in Essen in western Germany and another was surrounded by dozens of demonstrators in her car in the east of the country.

According to provisional police figures, 2,790 crimes were committed against politicians in Germany in 2023, up from 1,806 the previous year, but less than the 2,840 recorded in 2021, when legislative elections took place.

A group of activists against the far right has called for demonstrations against the attack on Ecke in Dresden and Berlin on Sunday, Der Spiegel magazine said.

According to the Tagesspiegel newspaper, Interior Minister Nancy Faeser is planning to call a special conference with Germany’s regional interior ministers next week to address violence against politicians.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)