Scholz' coalition collapses. What next?

Scholz’ ‘traffic light’ coalition is over Photo by Hermes Rivera on Unsplash

Dear Reader,

Two major pieces of news in one day. 

First, the outcome of the US elections that Germany's leadership had been praying wouldn't come true: a landslide victory for Donald Trump and his Republican party. 

Then, in the evening, Olaf Scholz fired his finance minister, a move that led to the immediate collapse of his government. 

Like a car crash happening in slow motion, Scholz' 'traffic light' government had been heading for this wall for a long time. Finally, the moment of impact has come.

While the one event didn't precipitate the other, they are still intimately linked.

The German government imploded due to fundamental ideological differences over how to resuscitate the country's ailing economy.

Two of the three parties in the coalition - Scholz' Social Democrats and the Greens - wanted to copy the borrow-and-spend path taken by the US, which favours certain industries. That approach has stimulated grow…