The collapse of the German economy is tied to the sabotage of the Nord Stream pipeline, while the fall of the government, it will turn out, is linked to Trump’s election victory. Is there room for making such bold analogies, and what is the internal connection between these events?
YOU’RE FIRED
The effects of the new American administration reached Berlin faster than anyone could have anticipated. Just hours after Donald Trump’s spectacular victory in the U.S. presidential election, the federal government faced unexpected challenges that promised far-reaching consequences. The Greens struggled the most to hide their shock and disbelief. Pale and stone-faced, Robert Habeck and Annalena Baerbock muttered before the cameras: “We wanted to continue.” In the brutal dismissal of Christian Lindner, the finance minister from the FDP party, there was something reminiscent of Trump’s style: “You’re fired!” Is it unacceptable? Hasn’t Germany always followed Washington’s political rhythm?
Immediately after the official confirmation of Donald Trump’s return to the White House, commentators and analysts in Germany predicted that the unpleasant news from the U.S. would strengthen the traffic light coalition. The opposite happened.
Trump’s election victory only accelerated the collapse of the traffic light coalition, whose simmering internal tensions exploded, plunging the country into a political crisis unprecedented since the post-war establishment of parliamentarism.
MONEY PLAYS A ROLE
The immediate cause and trigger for the coalition’s collapse was the long-standing dispute over economic and budgetary policies between the SPD and the Greens on one side, and the FDP on the other. Trump’s victory merely hastened the inevitable breakup. Why? Trump’s electoral triumph signaled more than a need to adjust Berlin-Washington relations; it also hinted at new and unforeseen costs for a country that rapidly fell from being Europe’s economic powerhouse to the level of an unstable economy.
The German Economic Institute (IW) estimates that during Trump’s four-year term, the trade rift between the U.S. and Europe could result in losses of up to €180 billion for the German economy.
Additionally, the new U.S. president might demand greater investments in NATO from Europe, further straining Germany financially. Another important factor is Trump’s announcement to halt support for Kyiv in the ongoing conflict in Eastern Europe. Can Europe afford to continue as the main sponsor of the war?
A CAREFULLY PREPARED SPEECH
An interesting element in analyzing the timing of Trump’s victory and the collapse of the traffic light coalition is Scholz’s speech. Germans noticed that it had been long and carefully prepared. Lindner’s economic plan, which officially triggered the coalition conflict, also wasn’t devised overnight. Considering these facts, it’s intriguing to wonder what would have happened if Kamala Harris had won instead. Nevertheless, all the leaders of the ruling parties—from Scholz and Habeck to Lindner—addressed Trump in their farewell statements.
American strategist Zbigniew Brzezinski viewed Russia as the main opponent of the United States, warning that the battle over the Eurasian plate—especially Ukraine—could determine America’s global power status. George Friedman, founder of the private intelligence firm Stratfor, later expanded on this idea: “The greatest threat to the U.S. would be a union of German and Russian forces, which must be prevented at all costs.”
SCHRÖDER—ANGELA—SCHOLZ
Olaf Scholz’s predecessors operated within set geopolitical constraints but recognized that Germany’s economic boom relied on cheap gas from Russian pipelines, which German companies purchased in large quantities. Both Gerhard Schröder and Angela Merkel invested their authority in the Nord Stream 2 project.
Russian gas was the cornerstone of Germany’s economic success, which in turn depended on employment, prosperity, and social peace. Confidence that Russia was a reliable trading partner—delivering gas even during the Cold War—paved the way for Nord Stream 2. German prosperity remained unshaken even by military conflicts in the East. After stepping down as chancellor, Gerhard Schröder, without fear of political consequences, could accept a position as an advisor to Russian President Vladimir Putin. The turning point came in February 2022 with the start of the Special Military Operation, further straining transatlantic and German-Russian relations.
A PREDICTED SABOTAGE?
At a Washington press conference, then-U.S. President Joe Biden, alongside Olaf Scholz, threatened to “take Nord Stream out of play” if Putin attacked Ukraine. It remains unclear why Putin proceeded with the invasion shortly after this serious threat, or whether Scholz warned Putin of the potential consequences.
Did Putin and Scholz, the last Western head of government to visit Moscow before the war, underestimate Washington, believing the energy partnership could continue under the radar and against U.S. wishes?
After the Russian invasion of Ukraine, the pipeline, labeled as Russia’s geopolitical instrument, was sidelined. The Americans imposed harsh sanctions on Moscow, and Scholz subsequently halted imports of Russian energy to Germany. A few months later, the pipeline was damaged in an explosion. It remains unclear how extensive the damage is, whether it can be repaired, or who was behind the sabotage. Suspicions have ranged from Russians, Americans, Ukrainians, Norwegians, to Poles. The investigation has yet to provide definitive answers.
THE UKRAINIAN NOOSE
Meanwhile, the traffic light coalition struggled to reconcile support for Ukraine, measured in billions, with social spending. Assuming new debt to provide financial aid to Ukraine was supposed to be done through a “special fund.” However, the Federal Constitutional Court blocked this possibility. Christian Lindner faced a choice: violate the Constitution or break the coalition. During the election campaign, his party promised to reorganize the budget and once again uphold the debt brake enshrined in the Constitution.
On the other hand, the chancellor decided to suspend debt repayment, citing the “extraordinary situation” in Ukraine. However, Lindner’s approach—investing in military expenses rather than social programs—no longer had the support of the coalition majority. The finance minister was in for a “cold shower”—instead of a strategically planned exit from the coalition, the chancellor dismissed him.
A FULL STOP TO UNCERTAINTY
In a televised address, Scholz’s criticism was unusually harsh. He accused Lindner of failing to show a willingness to accept the federal government’s proposal, which was aimed at ensuring the country’s welfare. Furthermore, he accused Lindner of irresponsible behavior that aroused suspicion and served the FDP’s interests exclusively, rather than those of all citizens. The finance minister could not hide his surprise. Before his eyes, the party that had participated in the government collapsed in an instant—Volker Wissing sided with Scholz to retain his ministerial position.
Did Lindner miscalculate his plans? There are indications that he had been preparing the coalition’s breakup for weeks. The FDP had plenty of reasons to leave the government.
Poor performance in several state elections and polls predicting results below the five-percent threshold suggested that the FDP was primarily fighting for entry into the next Bundestag. The party leadership’s strategic question was whether breaking up the traffic light coalition could win voters’ favor in possible new elections with a decisive five percent or if this risk could spell disaster for the party’s future. Scholz put an end to such uncertainties.
THE PEOPLE’S TURN
Was the decision hasty? Amid disrupted social peace, constant price increases, the closure of coal and nuclear power plants, and the halt of Russian natural gas supplies, tensions in the country escalated to the breaking point.
Instead of admitting that the “green and ecological transition” might fail, the federal government switched to a risky mode. Disaster was foreseeable. Energy costs exploded, thousands of jobs were lost, companies left the country, and deindustrialization became a pressing issue. Nevertheless, the government allowed the Greens to continue implementing their agenda, which included phasing out internal combustion engines. This would spell the end of Germany’s automotive industry, especially as Volkswagen announced the closure of three factories in Germany.
The government tried to encourage Germans to buy electric cars through subsidies, but when costs spiraled out of control, the subsidies were suspended. There was also no further investment in expanding charging infrastructure. Why? Simply put, there was no money.
The summary is as follows: no matter how events unfold in the future, the authority of the government and Scholz has been irreparably damaged. The next move belongs to the people.
