German government descends into crisis mode

Chancellor Olaf Scholz is trying to hold his coalition government together. But the three partners, SPD, Greens and FDP, seem unable to stop the infighting, although they depend on each other to stay in power.

Give up or rescue what can still be saved? This is the choice faced by the center-left government of Social Democrats (SPD), Greens and neoliberal Free Democrats (FDP) which has been in office for almost three years. The three parties have always been at loggerheads because many of their core policies are substantially different: The SPD and Greens believe in strong state and debt-financed policies. The FDP takes the opposite view.

Initial common ground was quickly exhausted. The give and take that is necessary for a coalition is now becoming increasingly difficult.

The situation has recently escalated around economic and budgetary policy. A ruling by the Federal Constitutional Court around a year agoexposed the rifts between the coalition partners. Back then, Germany’s highest court ruled against the government’s plans to reallocate money earmarked but never spent from a cache of debt taken out to mitigate the fallout of the COVID-19 pandemic. The money was instead earmarked for the government’s climate action budget. The court ruling left the budget €60 billion ($65 bio) short.

Since then, all three coalition partners have been trying to raise their own profile at the expense of the others, publicizing proposals that had not even been discussed with their partners.

Now, Germany is in a recession and tax revenues have fallen, which will tear an additional hole into state coffers.

Last month, Chancellor Olaf Scholz (SPD) held an industry summit with leading entrepreneurs and industrial trade union members but did not invite his Vice-Chancellor, the Green Party’s Economy Minister Robert Habeck or Finance Minister Christian Lindner, who is also chairman of the business-oriented FDP.

Linder then organized his own meeting with other business representatives, Habeck responded by proposing a billion-euro, debt-financed fund to promote investment by companies.

FDP calls for a change of direction

Habeck’s proposal is not reconcilable with the positions of the FDP, which insists on compliance with the debt brake — Germany’s strict rules against a ballooning deficit limiting fresh debt to 1% of GDP per year, a provision enshrined in the constitution.

However, a veto was apparently not enough for Lindner. In an 18-page policy paper, he called for a change of direction in the economy. The paper reads like a policy election campaign program for the FDP, which has been underperforming dramatically in opinion polls and regional elections.

Lindner calls for far-reaching tax relief for companies and top earners. He wants to scrap ambitious climate protection targets and reduce welfare

These positions are unacceptable to the SPD and the Greens and contradict the coalition agreement. This is why Lindner’s partners in government are speaking of a provocation and are wondering whether Lindner’s intention is to be kicked out of the coalition hoping this move would give him enough credit with conservative voters to boost the FDP beyond the five percent threshold for representation in parliament.

The popularity ratings of the coalition government have hit rock bottom. The outlook is grim for the three parties, but for the FDP it is now a matter of survival.

The Chancellor is holding on

However, without the FDP, Chancellor Olaf Scholz (SPD) would no longer have a majority in parliament. This would not automatically mean that there would be new elections. The SPD and Greens could also continue as a minority government and attempt to seek changing majorities in the Bundestag for their plans. The strongest opposition force, the center-right bloc of Christian Democratic Union (CDU) and Christian Social Union (CSU) is currently unable to form a Bundestag majority against the SPD and Greens.

However, Chancellor Scholz wants to avert the coalition break-up at all costs. He has been holding crisis talks in the Chancellery since the weekend. First with the SPD’s party leaders, then with FDP leader Lindner on Sunday evening. On Monday, government spokesperson Steffen Hebestreit announced that several three-way meetings between Scholz, Habeck and Lindner were planned over the next few days.

“A lot is currently happening under high pressure,” emphasized Hebestreit. The aim, he said, is to develop “an overall concept” based on the various proposals on economic policy.

“The government will do its job,” said Scholz when he was asked by journalists on the sidelines of a meeting with NATO Secretary General Mark Rutte in Berlin on Monday whether his government was unstable. “I am the chancellor, it’s about pragmatism and not ideology,” Scholz said stiffly.

The steps ahead

Several closed-door meetings will culminate in a session of coalition representatives on Wednesday (November 6). Then, for the first time in weeks, the leaders of all three parties and their parliamentary groups will be sitting at the same table. They will have to look each other in the eye and clarify what they can still agree on.

There is considerable time pressure, as the 2025 budget is due to be passed in the Bundestag at the end of November. The so-called adjustment meeting of the Budget Committee, in which the package is finalized, is scheduled for November 14. The draft budget still has a shortfall of several billion euros.

In his economic paper, Linder proposed cutting the welfare payments called “citizens’ allowance.” To fill holes in the budget he also suggested using the ten billion euros originally intended as a subsidy for a new Intel chip company which has since been put on hold.

The SPD and the Greens, however, would like to see that money remain in the Climate and Transformation Fund to promote climate projects and the development of new technologies. The construction of the Intel factory has only been postponed, SPD leader Saskia Esken emphasized. “That is why it would not be expedient to let these funds disappear somewhere in the cracks of the budget,” she said.

On Monday, Esken was keen to defuse the tension.“It’s not about a showdown,” she said. “We have absolutely no inclination to let the coalition fail, we need a responsible government,” she said.

The Greens are also warning against a break-up. “VW is going down the drain, there is an election in the US, Spain is suffering from massive flooding and the Russians are breaking through one front after another in Ukraine,” said Green Party leader Omid Nouripour. “This requires a whole new level of seriousness and we are also demanding this from this coalition.”

This article was originally written in German.

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Author: Sabine Kinkartz

N18bn will be paid as compensation for Lagos-Calabar coastal road project-Umahi

The federal government has announced plans to pay approximately N18 billion in compensation to property owners affected by the construction of the Lagos-Calabar coastal highway.

This figure represents an increase from the initial N8 billion earmarked for the project’s first phase, ensuring fair compensation for affected citizens.

Speaking in Lagos on Sunday, November 3, at a stakeholder engagement event, Minister of Works Dave Umahi disclosed that the new amount, applicable to phase one’s section one, reflects the government’s commitment to fair restitution. He also confirmed that half of the compensation has already been disbursed, with payments assessed and verified by independent experts. Umahi assured attendees that the remaining compensation will be completed within 10 days.

Akin Alabi, chairman of the House of Representatives Committee on Works, praised the ministry for its transparency and efforts to engage stakeholders. He also stressed the importance of publicly documenting compensation details to prevent misinformation and foster accountability.

“There are mischief makers out there, but by the time we start to publish these things, some people will have to keep quiet,” Alabi noted, underlining the government’s dedication to clarity and fairness in the process.

Rivers State Governor, Sir Siminalayi Fubara, has revealed the true motive fueling the political turbulence in the state; a sinister plot by certain individuals to seize and squander the state’s resources.

The Governor shared these insights during the birthday celebration of Apostle Chibuzor Gift Chinyere, the General Overseer of Omega Power Ministries. Speaking to a gathering of supporters and worshippers, he stated, “There’s a reason for the crisis in Rivers State and that reason is an attempt to control its resources. Rivers State’s resources belongs to its people, and we are committed to using it wisely for the betterment of all. What we ask from you is your continued prayers; with your support, we will stay focused and our mission of good governance will be achieved.”

Gov. Fubara also took a moment to applaud Apostle Chibuzor Gift Chinyere’s dedication to humanity, praying for God’s strength, wisdom, and grace upon his life.

Adding to the momentous occasion, Governor Fubara generously donated 200 million Naira to Omega Power Ministries, recognizing the impactful work of the church. The celebration drew an impressive array of dignitaries, including former Nigerian First Lady, Dame Patience Jonathan; Senator Adolphus Wabara, PDP Board of Trustees Chairman; and Hon. Uzoma Abonta, former House of Representatives member for Ukwa East/Ukwa West Federal Constituency.

Earlier in the day, the Governor attended a Thanksgiving service at Salvation Ministries headquarters in GRA Phase 2, Port Harcourt, held in honour of the Deputy Governor of Rivers state, Prof. Ngozi Nma Odu.

The atmosphere was filled with joy and gratitude as leaders and well-wishers gathered to celebrate her remarkable contributions to the state.