German chancellor urges coalition unity amid economic policy disputes

BERLIN

German Chancellor Olaf Scholz on Tuesday appealed to his coalition partners to find common ground on economic policy, as mounting disagreements within the government fuel speculation about potential snap elections.

Speaking at a press conference in Berlin, Scholz emphasized the need for the Social Democrats, Greens, and Free Democrats to engage in further discussions to reconcile their differences on budget, economic policy, and investments.

"As far as the situation of the government's future work is concerned, it is about a sense of commitment to the country, it is not about ideology," Scholz stated, and renewed his call on coalition partners to adopt a constructive approach.

The chancellor stressed the importance of cooperation in addressing the nation's economic challenges. "In the talks we are having about the budget, about the economy, employment and industry, the focus must be on promoting cooperation, and it is clear that it would be possible," he said, adding that all parties now have to work towards a compromise.

Earlier on Tuesday, Chancellor Scholz held hours-long discussions with Finance Minister Christian Lindner and Economy and Climate Minister Robert Habeck at the Chancellery to forge a compromise on the 2025 budget plan and reconcile the divergent economic perspectives within the coalition.

Chancellor Scholz’s coalition government has been grappling with internal tensions since Christian Lindner, leader of the liberal Free Democrats (FDP), drafted a policy paper calling for a significant shift in economic and financial policy. The paper proposed slashing taxes, modifying ambitious climate goals, and introducing cuts to social spending.

Robert Habeck, an influential figure in the pro-environment Greens party, presented his own strategy paper to boost the ailing German economy. Habeck's proposal called for additional special funds and substantial investments to accelerate the country's transition to a green economy.

The leaders of the Social Democrat Party (SPD), the Greens and the liberal Free Democrats are scheduled to gather for another meeting on Wednesday to discuss the ongoing budget impasse and economic policy differences.

This high-level meeting aims to build on the progress made during Tuesday's talks and further bridge the gap between the coalition partners' divergent views. The agenda is expected to cover key issues such as the 2025 budget plan, climate protection investments, and potential compromises on tax policies and social spending.