Why Scholz caved on an early high-stakes German election

Good morning.

Today, our Berlin correspondent explains why the EU’s biggest economy is heading for an early election, and we report on the political chaos around the final European commissioner hearings.

Buckle up

Germany will hold elections in just over 100 days after chancellor Olaf Scholz’s SPD and the centre-right CDU struck a deal to bring forward a snap vote, writes Laura Pitel.

Context: Scholz unravelled his coalition last week, planning for elections next spring. After a week of mounting pressure — and a debate over whether there was enough paper to print millions of voting slips at short notice — Scholz caved in to demands to hold an even earlier vote.

The chancellor, who will today make his first Bundestag address since his government imploded, will table a confidence vote on December 16, which he is widely expected to lose. That will pave the way for the election to take place on Sunday, February 23.

The vote has big consequences for the EU’s largest and most powerful nation at a time when it is facing a two-year economic slump and existential questions about the future of its export-led growth model.

At the same time, European leaders are forming contingency plans to counter a possible slump in US support for Ukraine after the inauguration of Donald Trump.

Although Scholz has seen the worst approval ratings of any postwar chancellor — and is far less popular than SPD defence minister Boris Pistorius — he is likely to be named as the SPD candidate.

Current opinion polls suggest that he is likely to be beaten by Friedrich Merz, the former chair of BlackRock Germany who has led the CDU since 2022.

The erstwhile finance minister, Christian Lindner — whose sacking last week marked the end of the coalition — said yesterday that the race was already over, and that Merz would “almost certainly” succeed Scholz.

It would be wise, however, not to forget the fate of former CDU leader Armin Laschet, whose disastrous 2021 campaign caused a crash in his party’s popularity and allowed Scholz to form a “traffic light” coalition with the Greens and the Liberals.

This time round, established parties must also contend with a surge in support for the fringes, the far-right Alternative for Germany (AfD) and the far-left Sahra Wagenknecht Alliance (BSW).

Still, the early vote has been welcomed by many in Germany’s business community and some of its international allies, who had grown frustrated by what they saw as indecision and lack of leadership by Scholz’s squabbling government.

Chart du jour: Trump trade

The euro has dropped to its weakest level against the dollar in a year, as investors fret over the impact of a more hawkish approach to China under a second Donald Trump presidency in the US.

Adrift

Deadly floods in Valencia last month have threatened to wash away Teresa Ribera’s aspiration to become the EU’s powerful competition commissioner.

Context: Ribera, Spain’s current climate minister, was one of six senior politicians grilled on the final day of hearings for the next European Commission due to start sitting later this year. Ribera has been nominated as the bloc’s executive vice-president overseeing climate and energy issues, aside from competition.

The Socialist’s ascension to the role has been held hostage, however, by rival political groups who want to hold her accountable for Spanish floods that killed more than 220 people in October.

During yesterday’s heated hearing, Ribera was accused of lying about Madrid’s response to the floods and grilled on her lack of experience. Ribera asked MEPs several times to be “polite”.

But even if her commitments to strengthen competition rules and ensure better support for workers in the green transition pleased some lawmakers, Ribera is subject to a broader political game.

The machinations mean that the vote on all six final candidates, which include Italy’s populist rightwing politician Raffaele Fitto and liberals Kaja Kallas and Stéphane Séjourné, will be delayed, according to commission and parliament officials.

Some Conservative lawmakers including from Spain’s centre-right People’s party (PP), have said they want to wait until Ribera, who would be the most senior Socialist in the commission, has answered questions about the floods in Spanish parliament next week.

“It’s outrageous,” said Giacomo Filibeck, secretary-general of the Party of European Socialists. He added that the PP and it’s European group, the European People’s party, was “holding Europe hostage for domestic political purposes”.

“We cannot afford delay when Donald Trump has just been elected in the US,” Filibeck said.

Today the leaders of the three centrist groups intend to meet commission president Ursula Von der Leyen to try to find a solution to keep their divided coalition together. 

What to watch today

1. Nato secretary-general Mark Rutte hosts US state secretary Antony Blinken in Brussels.

2. French premier Michel Barnier meets EU officials in Brussels.

Now read these

• Preparing for battle: Ukraine’s military is rushing medics to the frontline in anticipation of an intensified Russian onslaught.

• Palpable tension: France has bolstered security for a football match between its national team and Israel, to prevent clashes like last week’s in Amsterdam.

• Power struggle: Russia’s energy minister has attempted to combine the country’s oil majors. But he did not get Vladimir Putin’s green light.