Give up or rescue what can still be saved? This is the choice faced by the center-left government of Social Democrats (SPD), Greens and neoliberal Free Democrats (FDP) which has been in office for almost three years. The three parties have always been at loggerheads because many of their core policies are substantially different: The SPD and Greens believe in strong state and debt-financed policies. The FDP takes the opposite view.

Initial common ground was quickly exhausted. The give and take that is necessary for a coalition is now becoming increasingly difficult.

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The situation has recently escalated around economic and budgetary policy. A ruling by the Federal Constitutional Court around a year ago exposed the rifts between the coalition partners. Back then, Germany's highest court ruled against the government's plans to reallocate money earmarked but never spent from a cache of debt taken out to mitigate the fallout of the COVID-19 pandemic. The money was instead earmarked for the government's climate action budget. The court ruling left the budget €60 billion ($65 billion) short.

Since then, all three coalition partners have been trying to raise their own profile at the expense of the others, publicizing proposals that had not even been discussed with their partners.

Now, Germany is in a recession and tax revenues have fallen, which will tear an additional hole into state coffers.

Last month, Chancellor Olaf Scholz (SPD) held an industry summit with leading entrepreneurs and industrial trade union members but did not invite his Vice-Chancellor, the Green Party's Economy Minister........

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