Divisions among the members of Germany’s fractious and unpopular governing coalition have reached a breaking point over the proposed budget for 2025. The conflict exposed the starkly different economic policy outlooks of the junior coalition parties — Greens and Liberals (FDP) — with the Social Democrat (SPD) Chancellor Olaf Scholz attempting furiously to mediate a compromise.

Germany is still capable of functioning after Chancellor Olaf Scholz fired his finance minister, spelling an end to his fractious coalition and paving the way for new elections, Vice Chancellor Robert Habeck said on Thursday.

Robert Habeck, Germany's economy minister and vice chancellor, has appealed to citizens to keep faith in the country's democracy, despite the current political crisis. "Do not doubt the strength of this country.

Germany’s leader is expected to lead the country with a minority government after the collapse of the coalition.

After German Chancellor Olaf Scholz dramatically fired Finance Minister Christian Lindner of the pro-business Free Democrats in a late-night move after a marathon of crisis meetings, the three remaining ministers of the Free Democrats also resigned later at night effectively leading to the government coalition's collapse.

On Wednesday, German Chancellor Olaf Scholz dismissed his finance minister and coalition partner, Christian Lindner, over disagreements on economic policy. The country will now be facing a snap election next year in a bid for more political stability.