(Bloomberg) — Chancellor Olaf Scholz’s party is increasingly pressing the German leader to show more assertive leadership after its European election rout, starting with coalition wrangling over the 2025 federal budget.
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Social Democratic leaders have called an emergency board meeting for Sunday to discuss consequences and lessons after the party fell to a record low in the European Parliament election on June 9, according to people familiar with the discussions. Scholz’s coalition partners, the Green party and the Free Democrats, also fared badly.
Frustration with Scholz and his moderation-focused leadership erupted during a meeting of the SPD’s parliamentary group on Tuesday, where lawmakers expressed concerns about the governing coalition’s public image, caucus leader Rolf Muetzenich said in a Rheinische Post interview.
“From now on, the chancellor will take the opportunity to explain his position within the coalition more clearly as the Social Democratic head of government,” Muetzenich was cited as saying. SPD lawmakers “emphasized their wish that the chancellor must become more visible with his convictions, also in the government.”
Unlike French President Emmanuel Macron, Scholz hasn’t shocked markets by seeking an early election. But he risks exacerbated tension within Germany’s three-party government, notably over Finance Minister Christian Lindner’s focus on fiscal discipline.
Scholz is expected to join the SPD party board meeting before heading into the next round of coalition talks on the 2025 budget with the Free Democrats’ Lindner and Economy Minister Robert Habeck of the Greens, who’s also deputy chancellor.
To defuse the coalition’s budget fight, senior SPD and Green members have called for a renewed emergency exemption from Germany’s constitutional limits on new borrowing or for the creation of another debt-financed special fund for defense spending. Lindner and his party have ruled out more borrowing that goes beyond the fiscal rules, which are known as the debt brake.
The spending stalemate has triggered speculation that Scholz might combine approval of the 2025 draft budget with a confidence vote in the lower house, or Bundestag. Senior coalition officials have played down the likelihood of such a risky move, which could lead to snap elections in a worst-case scenario.
With the European elections out of the way, the coalition parties appear headed for the next drubbing in September when voters in three eastern German regions elect state legislatures. Polls suggest the nationalist Alternative for Germany, or AfD, will win the most seats in all three states.
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