Germany’s Scholz fires his finance minister in a blow to the ruling coalition

BERLIN (AP) — Germany’s center-left Chancellor Olaf Scholz announced Wednesday he was firing Finance Minister Christian Lindner, which could undermine the ruling three-party coalition that relies on Lindner’s pro-business party.

The coalition had been arguing for weeks over ways to boost the country’s ailing economy, but were not able to find a compromise.

“I feel compelled to take this step to prevent damage to our country. We need an effective government that has the strength to make the necessary decisions for our country," Scholz said.

Lindner, from the pro-business Free Democrats, had rejected tax increases or changes to Germany’s strict self-imposed limits on running up debt. Scholz’s Social Democrats and the environmental Greens, who are also part of the coalition, want to see massive state investment and rejected the Free Democrats' proposals to cut welfare programs.

It was not immediately clear if the Free Democrats would leave the government coalition.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

BERLIN (AP) — The leaders of Germany’s quarrelsome governing coalition are meeting again on Wednesday in another last-minute effort to find a joint solution to fix the country's struggling economy.

German Chancellor Olaf Scholz of the center-left Social Democrats, Finance Minister Christian Lindner of the pro-business Free Democrats and Economy Minister Robert Habeck of the environmentalist Greens want to boost the economy but are at odds over how to do it.

A meeting of the coalition committee later Wednesday will focus on how the billion-euro hole in the 2025 budget can be plugged and how the German economy can be put back on track.

However, they disagree fundamentally over how to kickstart the economy again, and after weeks of government infighting many Germans wonder if the current government will actually survive the coming 11 months before the next election is due.

Uncoordinated summit meetings and differing proposals by the leaders have fueled the conflict among the coalition partners.

If the leaders fail to reach an agreement later on Wednesday, the government could be on the brink of collapse.

Scholz appealed to all coalition partners to find a solution and prioritize the country over different party convictions.

“As far as the situation of the government’s further work is concerned, it is about feeling committed to the country, not about ideology,” he said Tuesday in Berlin. “And it is clear that we can. In this respect, the question is not whether it can be done at all, but whether it is possible, and everyone has to work on that now."

The Free Democrats have pushed for changes in the country's economic policy, some of which Lindner expressed in an 18-page paper last week that was leaked to the media.

The party categorically rejects tax increases or changes to Germany’s strict self-imposed limits on running up debt, and say it’s time to save money — for example, on benefits for the long-term unemployed.

Politicians on the left want to see massive state investment and reject talk of cutting welfare programs and many other ideas Lindner proposed in his paper last week.

Germany's economy is expected to shrink in 2024 for the second year in a row, or at best stagnate, battered by external shocks and home-grown problems including red tape and a shortage of skilled labor.