BERLIN – German Chancellor Olaf Scholz fired his finance minister on Wednesday, ending his three-party ruling coalition and destabilizing his center-left government just as the election of Donald Trump in the United States presented itself to the fore. Europe faces new economic and security challenges.

“I would have liked to spare you this difficult decision,” Scholz said during an impromptu press conference in the chancellery on Wednesday evening. “Especially in times like these, when uncertainty grows,” he added.

Scholz has pledged to continue governing until the end of the year, then demand a vote of confidence in parliament in January, a test he could fail. This would pave the way for early elections, perhaps in March.

The unrest in Berlin leaves the European Union even more distraught at a particularly difficult time. The French government is in crisis after this year’s elections resulted in a parliamentary deadlock, and Russia made significant advances on the battlefield in Ukraine and continues to threaten Europe as a whole.

Today, Europe faces the possibility of a trade war with the United States and a weakening of the NATO alliance – two threats that Trump has threatened – while Germany, its most populous country, is also mired in political instability.

The collapse of the coalition in Germany came after the leaders of the three parties – Scholz’s Social Democrats, the left-wing Greens and the pro-business Free Democrats – had mostly stopped speaking to each other in recent weeks due to growing differences in negotiations for an agreement. new federal budget.

On Wednesday evening, the resentment between Scholz and Christian Lindner, the leader of the Free Democrats and his finance minister, who spoke to journalists 30 minutes after the chancellor, was clearly visible.

“Olaf Scholz has unfortunately shown that he does not have the strength to give our country a new start,” said Lindner, who called Scholz’s suggestions for promoting economic growth “boring and unambitious.”

Scholz told reporters that Lindner had acted irresponsibly by not wanting to compromise.

The coalition, which has governed Germany since the departure of former Chancellor Angela Merkel in 2021, was an uneasy group of political partners from the start. It was the first tripartite coalition since the early 1960s, one of the reasons, according to many members of the government, for its instability, its frequent leaks and, sometimes, its paralysis.

The collapse of the coalition is stunning for a country long known for its hard work and predictable consensus that has avoided the political turmoil of some of its more volatile European partners. It could signal a new era of political instability for Germany, as far-right and far-left populist parties gain popularity in a fractured political landscape.

Speculation about a coalition collapse has grown since last week after Lindner wrote a position paper, leaked to the media, that questioned the progressive fiscal policies of his two center-left coalition partners.

Many of his proposals, like ending national climate policies or cutting social services, seemed designed to antagonize them. Experts see this newspaper as an attempt by Lindner to exclude himself from the coalition without having to leave it himself. The opposition, which is calling for the end of the coalition, has called it a “divorce document”.

Scholz and Robert Habeck, German Economy Minister and member of the Green Party, initially tried to keep the coalition together. Calling for “pragmatism” in a social media post on Monday, Scholz continued: “Coalition governments can sometimes be difficult. But the government is elected and there are problems that need to be resolved.”

At the heart of the conflict was a hole of around 10 billion euros, or $10.7 billion, in the 2025 budget.

On Monday, Habeck sought to keep Lindner in government by offering him several billion euros to subsidize an Intel factory project to help balance the budget. “This is the worst time for a government to fail,” he told journalists at the time.

On Wednesday, Habeck called the firing “as logical as it is unnecessary,” saying many offers were on the table to meet Lindner’s economic demands.

Also on Wednesday, Scholz announced that his Social Democrats would govern with the Green Party as a minority government at least until the end of the year. They will have to obtain parliamentary majorities on a case-by-case basis to adopt laws.

On some issues – notably aid to Ukraine, rebuilding the army and cracking down on immigration – they could count on the support of the Christian Democratic opposition, which shares the same views on them.

»Germany is Europe’s largest economy and the largest contributor to the EU budget; they need certainty,” said Sudha David-Wilp, regional director of the German Marshall Fund, a Berlin-based think tank. “And a minority government means instability for the country and its partners in Europe,” she added.

Ultimately, such an arrangement can only work with the tacit support of the conservative Christian Democratic Union, or CDU, the largest opposition party leading opinion polls ahead of the upcoming election.

“We cannot afford this unstable government for one more day,” Carsten Linnemann, the party’s general secretary, told the German tabloid Bild earlier this week.

The Scholz coalition presented itself as a reboot after Merkel’s dormant years. The partners successfully managed pressing issues early in his term after Russia invaded Ukraine in 2022 and Germany stopped importing Russian gas.

But a ruling by the country’s highest court in 2023 forced the government to make drastic budget cuts, leading to conflicts between partners over the borrowing limit anchored in the constitution.

The permanent pause comes against a backdrop of stagnation in the German economy, which is expected to contract by 0.2% in 2024, the second consecutive year of stagnation in Germany. The country is the weakest member of the Group of 7 and among countries using the euro.

In a sign of growing difficulties, Volkswagen, Germany’s largest industrial employer, is threatening major job cuts and factory closures as it strives to return its flagship brand to profitability.

With Lindner’s emphasis on economic reforms and his exit from government, he appears to have chosen the timing of his election campaign.

His Liberal Democratic Party has struggled to surpass 5% support in polls, the threshold for entering parliament. Leaving the government on a principled stance could allow Lindner to garner voter support for the next election, whenever that may be.

This article was originally published in The New York Times.