Germany’s government coalition collapsed when Chancellor Olaf Scholz fired Finance Minister Christian Lindner, leading to the formation of a minority government with Scholz’s Social Democrats and the Greens.

Despite opposition calls for early elections, Scholz plans to hold a confidence vote in January, which could trigger elections as soon as March.

Scholz accused Lindner of breaching trust over his economic proposals, including tax cuts for the wealthy and pension cuts.

The minority government will rely on support from the opposition Christian Democrats, but their leader, Friedrich Merz, insists on an immediate vote of confidence, the Associated Press has reported.

Analysts warn that prolonged political instability could harm Germany’s economy.

Written by B.C. Begley