UPDATE - German coalition government in crisis talks amid economic policy dispute

UPDATES WITH REMARKS FROM GERMAN CHANCELLOR, EDITS THROUGHOUT

By Anadolu staff

BERLIN (AA) – German Chancellor Olaf Scholz held crisis talks with Finance Minister Christian Lindner and Economy and Climate Minister Robert Habeck on Monday, as the coalition government grapples with internal disputes over economic policy.

Speaking to reporters after the meeting, Social Democrat Scholz dismissed speculations that his coalition was on the brink of a collapse and underlined that the government remains functional despite ongoing challenges.

“It is about us overcoming the challenges in serious times we are facing, it is about the economy and jobs, it is about pragmatism and not ideology,” he told a press conference in Berlin.

“Coalition governments can be challenging at times, and this is not unique to Germany. However, our objectives are clear, the elected government is in office, and we will continue to fulfill our responsibilities," he added.

Earlier on Monday, a government spokesman acknowledged the disagreements among the three coalition partners, the Social Democrats, the Greens, and the liberal Free Democrats, and said their discussions on economic policy will continue in the coming days.

“The chancellor’s priority has been to strengthen the German economy and secure jobs. And now, it’s a matter of finalizing the 2025 budget as well, which has already been largely discussed,” Steffen Hebestreit told a news conference in Berlin.

“Discussions are underway, some of which you hear about and some of which you don't. The budget adjustment meeting is scheduled for Thursday next week, and an agreement is needed by then. That is what we are discussing now,” he said.

Monday’s crisis talks came after Lindner, the finance minister and the 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.

In contrast, Habeck, the economy and climate minister and an influential figure of 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.

Recent weeks have seen widespread media speculation in Germany about the possibility of snap elections. They were fueled by growing disagreements between coalition partners, particularly the FDP and the Greens, over economic and environmental policies.