German Chancellor Olaf Scholz has lost a vote of no confidence in the Bundestag.
The result comes after Scholz’s three-party coalition collapsed in November, leaving his government in a minority. The vote, which Scholz himself had called, was seen as a tactical move aimed at forcing early elections rather than waiting for the originally scheduled September 2025 date.
The motion of censure passed with 394 votes against Scholz, while 207 voted in favor. 116 abstained. The result paves the way for German President Frank-Walter Steinmeier to dissolve parliament, which must now happen within 21 days, according to the German constitution. New national elections are scheduled for February 23, 2025.
Monday’s vote marks only the sixth time in postwar German history that a chancellor has faced a formal vote of no confidence, and only the fourth time a sitting chancellor has lost.
Germany’s DAX index closed down 0.45% due to instability.
Political bet
Scholz had presented the vote of no confidence as a way to allow voters to “determine the political course of our country.” In a speech before the vote, he said Germany must “dare to be strong” and “invest powerfully in our future.” He also pledged to push for “massive” investments in defense and infrastructure if re-elected.
Scholz’s critics described his move as a “kamikaze” strategy, with opposition politicians saying he was putting Germany’s political stability at stake in a bid to salvage his party’s waning popularity.
Collapse of the coalition
Scholz’s three-party coalition, which included his Social Democratic Party (SPD), the Free Democratic Party (FDP) and the Green Party, collapsed in November after Scholz fired Finance Minister Christian Lindner, who leads the FDP.
In response, the FDP withdrew the remaining ministers. The government has failed to agree on key issues such as the German federal budget for 2025 and the management of the constitutional “debt brake” which limits borrowing.
The SPD and Greens continued to govern as a de facto minority government, but without the parliamentary majority required to pass new laws.
The debt brake
The debt brake (Schuldenbremse) is a rule designed to limit the government’s ability to run structural budget deficits. It was introduced in 2009 as an amendment to the German constitution (Grundgesetz) in response to the 2008 global financial crisis.
It is one of the strictest budget rules in the world. Barring extraordinary exceptions, the federal government is only authorized to record a structural deficit of 0.35% of GDP each year. For Germany’s 16 Länder, even stricter rules apply: they are required to maintain balanced budgets without any structural deficit.
It would be difficult to amend it, as it would require a two-thirds parliamentary majority.
In November, the FDP refused to ease the debt brake to finance additional borrowing to finance infrastructure, climate action, social protection, defense and support for Ukraine.
The SDP, on the other hand, argued that this spending was necessary. They sought to use legal loopholes, reinterpretations and creative accounting methods to circumvent the debt brake. For example, they proposed classifying support for Ukraine as “extraordinary” and excluding investment spending from the “structural deficit” calculation, in the same way that some “green investments” are excluded under the EU budgetary rules.
The election campaign begins
With February’s elections now confirmed, Germany’s political parties have begun to position themselves for a fierce campaign.
Scholz’s center-left SPD will once again field him as its candidate for chancellor, despite the party’s declining popularity in recent polls. The FDP is hovering around the 4% threshold required to enter Parliament.
The Greens also saw their support fall.
Friedrich Merz, leader of the Christian Democratic Union (CDU), is the favorite to succeed Scholz as chancellor. The CDU and its Bavarian affiliate, the Christian Social Union (CSU), are currently leading the polls with around 33% support, far ahead of the SPD.
The far-right Alternative for Germany (AfD), which currently garners around 17 percent of the vote, is also expected to play a major role in the elections. Although no dominant party has indicated a willingness to form a coalition with the AfD, its growing vote share could make coalition-building more difficult.
Coalition possibilities
After February’s elections, the CDU is most likely to lead the next government, but it is likely that no party will hold a majority, meaning Germany will once again face complex coalition negotiations.
Merz has ruled out governing alongside the AfD, and potential coalitions with the SPD or Greens would face significant ideological challenges. The FDP, meanwhile, may fail to cross the electoral threshold required to enter parliament, leaving fewer coalition partners available.
