hide
Free keywords:
-
Abstract:
On November 6, 2024, Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner, dramatically ending Germany’s “traffic light” coalition. This collapse wasn’t just a matter of personal differences—it resulted from a fiscal orthodoxy that has shackled Germany’s economy for over a decade. Dogged adherence to balanced budgets has systematically thwarted critical investments in infrastructure, climate action, and digitalization, while external demand masked the model’s flaws. With export markets shrinking in the United States and China, the enablers of this approach have fallen, exposing deep cracks in the foundations of Germany’s economic model. Yet the political obstacles to dismantling this self-harming paradigm remain formidable.
