German Chancellor Olaf Scholz lost the confidence vote

German Chancellor Olaf Scholz failed a confidence vote in the country’s Bundestag on Monday early election in February.

Scholz expected — and hoped — to lose the vote he called for himself in November leading to early electionsOriginally planned for the fall of 2025.

This is only the sixth time in German history that such a vote has been held, and the fourth time that the president has disrupted the vote.

Scholz said on Monday that he called for the vote not only for parliament, but for all voters.

“Do we dare to be a strong country, to invest strongly in our future,” Scholz told lawmakers before the vote.

Scholz dismissed the former finance minister Christian Lindner ended Germany’s ruling coalition in November 2021. This coalition consisted of Scholz’s Social Democratic Party (SPD), Lindner’s Free Democratic Party (FDP) and the Green Party.

The SPD and the Greens remained in government as a de facto minority government, and will continue to do so even after Monday’s vote until a new Bundestag is formed. Without the parliamentary majority needed to pass laws, Scholz is widely seen as a lame duck.

The tripartite coalition government has been divided over its budgetary and economic policy stances. The tension reached its limit In an article authored by Lindner, he outlined his vision for reviving the German economy. However, the former finance minister spoke against the fundamental positions of the SPD and the Green Party in the newspaper.

The parties also struggled to finalize Germany’s 2025 budget and were unable to reach a resolution.

The government is now set to operate under an interim budget until the current Bundestag implements its budget – Germany’s finance ministry said on Monday it expects an interim spending plan for 2025 no sooner than the middle of next year.

German President Frank-Walter Steinmeier now has 21 days to dissolve parliament. A new election must be held within 60 days of this cancellation, on a date already set February 23.

The German constitution sets out a series of procedures aimed at smoothing out the collapse of the government as much as possible and avoiding the political turmoil seen in the Weimar Republic in the 1930s – a turbulent period that played a key role in the rise of the government. Nazis in Germany.

The campaign for the 2025 election has already begun, with Germany’s parties debating initial policy proposals around key issues such as immigration, the economy, taxes, debt relief and social security. Full manifestos are likely to be released in the coming weeks.

The parties also announced which of their candidates with the most votes they would choose for the post of chancellor. Despite the collapse of Scholz’s coalition, he was chosen as the SPD’s chancellor candidate, while opposition leader Friedrich Merz will fill the position for the CDU.

The CDU, along with its Bavarian affiliate, the Christian Social Union (CSU), is currently in the lead requests and is poised to emerge as the largest party, putting Merz in prime position to replace Scholz as chancellor. The CDU/CSU is then expected to form a coalition with either the SPD or, in a less likely scenario, the Greens to form Germany’s next government.

Callum Pickering, chief economist at Peel Hunt, said on Monday that regardless of the outcome of the confidence vote, Germany’s economic crisis will force a final deal on new financial support.

“Even if you don’t change the debt brake in the first 3 to 6 months of the new administration, if there’s a large enough majority of them, eventually economic conditions will force them to accept the reality that they need fiscal stimulus,” Pickering told CNBC.European street signs.”

“The moment you get fiscal stimulus in Germany, I think a lot of things start to look a little bit better,” he said.