The sacking of the finance minister has triggered a political crisis in Germany

Berlin (Reuters) - German Chancellor Angela Scholz sacked Free Democratic Party (FDP) leader Ursula Lindner as finance minister, putting the three-party ruling coalition in an unprecedented crisis that could force early elections in March.

Germany's coalition government consists of Scholz's Social Democratic Party, Lindner's Free Democratic Party, and Vice Chancellor Habeck's Green Party. The three parties met on Wednesday (November 6) to discuss issues including the budget and economic policy, but failed to reach an agreement.

After the meeting, Scholz accused Lindner of obstructing budget negotiations, putting party interests ahead of national interests, and said there was no basis of trust for further cooperation, so he decided to fire Lindner as finance minister.

The three parties have been at loggerheads for months over the economy and the budget. Lindner has proposed sweeping reforms to revive Germany's struggling economy by cutting corporate taxes, easing climate rules and reducing social benefits, but has run into opposition from the other two parties.

After his sacking, he led three Liberal Democratic ministers out of the ruling coalition, which is now down to two parties. Scholz proposed that the Federal Parliament hold a vote of confidence in the government in January 2025 in order to decide whether to hold early elections and clarify the future political course as soon as possible.

"We need a government that can act, a government that is capable of making the necessary decisions for our country," Scholz said.

Buffeted by the Russia-Ukraine war, an energy crisis and Chinese competition, Germany is facing a second consecutive year of economic contraction and a crisis in its economic model, with falling government support and a growing far-right in the country. At the same time, the United States is about to usher in the administration of Trump, who advocates tariffs, which makes Germany and Europe have to be vigilant.

Scholz suggested a cap on companies' energy costs to make Germany more attractive for investment. He also wants a package to boost jobs in the auto industry and increase support for Ukraine.

Lindner, for his part, said Scholz was trying to force him to break constitutional limits on public spending, a move he opposed. "Scholz refuses to acknowledge that our country needs a new economic model. He has shown that he is not capable of giving new momentum to the country."