Germany’s governing coalition has collapsed leading to great instability in the Bundestag. The collapse resulted from Chancellor Olaf Scholtz’s dismissal of Finance Minister Christian Lindner. In response, Lindner’s Free Democrats Party withdrew from the coalition with Scholtz’s Social Democratic Party (SDP) and the Green Party. Now that the SDP and the Green Party lead with a minority party, Scholtz plans on calling a confidence vote for Jan. 15, 2025, a procedure which would allow the government to continue operating under current leaders if the majority of the members vote in favor of SDP.

The opposition, however, is pushing for an immediate confidence vote. That would pave the way for snap elections way ahead of the scheduled Sept. 2025 regular elections in Germany, potentially even earlier than the date Scholtz proposed in March 2025. DeutscheWelle reports that 65% of Germans are in favor of immediate elections as well, making the prospects of Scholtz winning the confidence vote quite low.

Germany used to be one of the strongest economies in the world but has seen a worrying decline in the last few years. The government had just announced that 2024 is the second year in a row of recession for the German economy, which has shrunk 0.2% despite predictions from the beginning of the year of a 0.3% projected growth. As a result, Germany has lost its international competitiveness. In comparison with the other four leading economies — the United States, Japan, China, and India — Germany is the only one that will experience shrinkage.

Because of this trend, Christian Lindner, who is considered a fiscally conservative Finance Minister, and Olaf Scholtz have been butting heads over the past few months. Lindner claims Scholtz has been pressuring him to overstep Germany’s constitutionally enshrined debt limits.

Despite the recession, Germany is still Europe’s strongest economic power. The collapse of its government will likely cause a ripple throughout the EU. It is unusual for Germany to experience this level of instability. The last snap elections for the Bundestag were held back in 2005. It is an especially inopportune time for Europe to have its biggest economy destabilized, as experts point out that with the Trump re-election and his more U.S.-centric policies, the EU must plan for an appropriate union-wide response and prepare to solidify its security.