German Government at Risk of Collapse After Rift on Economy

Germany’s three-party coalition government, wracked by infighting and policy paralysis over a stagnant economy, is teetering on the brink of collapse.

It does not look likely to last until the next scheduled elections in September 2025 and could fall imminently over a nasty budget debate that comes to a head this month, analysts say. The main political parties are already laying out their campaign positions, and coalition leaders are barely talking.

The growing rift became more evident Friday evening, when a leaked position paper by the leader of one coalition party called for a fundamental economic overhaul that contradicts government policies, and is meant to cut costs.

The 18-page economic paper was written by Christian Lindner, the leader of the pro-market liberal Free Democratic Party.

Mr. Lindner wants to cut some social service payments, drop a special “solidarity tax” intended to help fund German reunification, and follow European Union climate regulations rather than more ambitious national ones — all demands that his coalition partners are highly unlikely to accept.

After coalition parties lost votes in three state elections in September, Mr. Lindner warned that the coming months would become the “autumn of decisions.” And he has suggested that if the coalition did not work in his favor, his party could quit the government of Chancellor Olaf Scholz.