Germany - Pressure is increasing on Chancellor Meretz and his coalition government

The resignation of former Minister of Labor and Co-Chair of the Social Democratic Party, Bärbel Bas, has caused increased tension between the Social Democratic Party and the Christian Union. The accusations leveled by Bass against her coalition partner raised speculation about the future of the federal government and the direction of the Social Democratic Party in the next stage.

Observers believe that the sharp criticism issued by the Prime Minister of the state of Mecklenburg-Vorpommern, Manuela Schwezig, towards Chancellor Friedrich Merz, may reflect a trend within the Social Democratic Party to reconsider the continuation of the coalition. Former head of the Green Party, Reinhard Butikofer, went so far as to say that Schweizig's statements suggest that she "wants to leave the coalition," according to the German "Welt" website.

Schweizig had accused leaders in the Christian Union of dealing with Bass in an “inhumane” and “merciless” manner, stressing that they were aware of her difficult family circumstances after the death of her husband’s daughter. On the other hand, politicians from the Christian Union rejected these accusations, stressing that their criticism focused on the Ministry of Labor’s delay in submitting important reform projects, most notably reform of the retirement system, and not on Bas’s personal situation.

Christian Union MP Saskia Ludwig criticized what she described as an attempt to justify “a year and a half of procrastination” in the reform files, considering that the Ministry of Labor includes cadres and alternatives that allow government work to continue. It also saw that the Social Democratic Party was using the issue politically to put pressure on its coalition partner.

Suspicions about the existence of a crisis of confidence within the government were strengthened after it became clear that Chancellor Meretz was informed of Bass’ resignation decision only a few minutes before it was announced. Analysts believe that this reveals weak coordination between the leadership of the two parties.

Although there are no immediate indications of the collapse of the coalition, the future of the leadership of the Social Democratic Party is still open, especially with talk of electing a new leadership for the party early next year. Observers fear that the continuation of these disputes will weaken the government's ability to pass major reform projects in the coming months.

Challenges facing the ruling coalition in Germany

Retirement

The Christian Union believes that preparing the pension reform bill takes too long. Party politicians have expressed their dissatisfaction with this over the past weeks, even though Bass was mourning her stepdaughter at that time.

"July, August, September, October... this is too long for me," Merz reiterated during the German Employers' Confederation's Employers' Day. He added that the project must be presented to the Council of Ministers before the end of the year, after coordination with the parliamentary blocs and German states.

Health and nursing care

Last week, the Council of Ministers was supposed to call for the formation of a committee to reform the nursing care system. This committee is required to submit, by the end of January, proposals that guarantee the regime’s readiness for the challenges expected in the 2030s.

But disagreements revolved around the composition of the committee and its tasks. The Social Democratic Party demands that discussions include setting maximum limits for the increasing self-contributions paid by those in need of care, while rejectionist positions were issued by the Christian Union. However, the Council of Ministers may approve the formation of the committee soon.

Political pressure may also increase with the issuance of new estimates of the financial situation of health insurance funds. The competent committee is expected to present its expectations for the current and next year. The question is: To what extent can the stability of health insurance contributions be guaranteed in 2027?

Taxes

Higher taxes on sugar-sweetened beverages should help protect health and relieve pressure on the federal budget. But Finance Minister Lars Klingbeil's plans have sparked sharp disagreements.

The Ministers of Agriculture and Consumer Protection from the Christian Union parties in the German states opposed this plan in a letter to Chancellor Merz. They believe that this tax represents government interference in consumer behavior, will burden farmers and lead to higher prices.

The Chancellery had temporarily halted these plans at the beginning of the month, accusing Klingbeil of exaggeration. It remains unclear whether a settlement will be reached. There are also disagreements over the plastic tax and the taxation of cryptocurrencies such as Bitcoin.

Budget

If the expected revenues from the proposed tax increases do not materialize, Klingpile will face a major problem in preparing the budget.

The Christian Union also wants to finance a reduction in the electricity tax for families, an increase in parental allowances, and to offset the effects of tax inflation. This could completely torpedo the 2027 budget draft, even if the new tax estimates provide additional fiscal margin.

Deliberations are currently taking place within the Budget Committee, and all details are scheduled to be resolved in mid-November during what is known as the “settlement session,” then the budget will be voted on in the Bundestag at the end of the same month.

But within the coalition, some do not rule out postponing the date, or even not approving any new budget before the end of the year.

Election of the Prime Minister of the state of Saxony-Anhalt

The election of the Prime Minister of the state of Saxony-Anhalt next December has the potential to cause a serious government crisis in Berlin. Will the AfD candidate, Ulrich Zigmond, receive votes from the Christian Union? .

The AfD's new local parliament speaker, Tobias Rausch, was elected last week with four more votes than the party and its allies officially have. Many within the Social Democratic Party believe that these votes came from representatives of the Christian Union.

Anger within the party culminated in a protest march by the parliamentary bloc and a speech by Defense Minister Boris Pistorius, who described what happened as an "unprecedented violation of political taboos."

If similar doubts arise during the election of the prime minister, the stability of the coalition in Berlin may be shaken. That is why the Christian Union bloc in Magdeburg is considering leaving the hall en masse before the vote.

Formation of the government in Berlin

There is another state that has the potential to spark a political crisis. In Berlin, federal and local politics overlap in an unprecedented way. Chancellor Merz has publicly called on the Social Democrats and the Greens not to form a coalition with the Left Party in the capital, demanding that negotiations be stopped immediately. He justified this by the presence of widespread anti-Semitism within the party.

The Social Democratic Party has not yet decided on entering into formal coalition negotiations. But Merz warned: “If the Social Democrats and Greens give their support to this, this will undoubtedly be a burden on cooperation here in Berlin.”

Open-ended driving questions

It is clear that the Social Democratic Party is facing a leadership crisis. Not only is Barbel Bass' position in the party's dual leadership in need of a new occupant, Lars Klingbeil has also announced that the entire party leadership will be re-elected. It is likely that Klingbeil will run again, but that is not certain. The identity of the potential candidates will also affect the atmosphere of cooperation within the coalition. As for Boris Pistorius, he ruled out his candidacy, stressing that he is fully occupied with his position as Minister of Defense and that he prefers Klingbeil to run again.

Manuela Schwezig, Prime Minister of Mecklenburg-Vorpommern, is one of the most prominent potential candidates, although Chancellor Merz does not have a good relationship with her.

In the Christian Union, Meretz is still suffering from a decline in its authority that began since the confusion over government appointments over the summer, and worsened after the party's series of defeats in state elections. State presidents and party leaders gave him only lukewarm support.