Germany's governing coalition collapsed on Monday after the Social Democratic Party's parliamentary group voted 143 to 61 to withdraw, triggering the country's third snap election in postwar history. SPD leader Lars Klingbeil cited a 'fundamental breach' of the coalition agreement over defence budget borrowing as the reason for the withdrawal. Federal President Frank-Walter Steinmeier set March 2 as the provisional election date.
Chancellor Friedrich Merz announced he would request a no-confidence vote to formalise the process. Mr. Merz said he was 'deeply disappointed' and that the SPD had 'chosen political advantage over national stability.' Mr. Klingbeil said the CDU/CSU had 'deliberately undermined the fiscal compact the two parties had agreed.'
Financial markets reacted sharply to the news. German bond yields rose, the euro weakened, and analysts described the political situation as 'acutely disruptive.'
The collapse carried particular institutional consequences given Germany's current position. Germany holds the rotating European Union Council presidency, meaning the period of domestic political instability coincides with a moment of significant European-level responsibility for the German government.
No talks between the parties to reconstitute the coalition were announced. The provisional March 2 election date was subject to confirmation pending the formal no-confidence proceedings.