German Chancellor Olaf Scholz will convene meetings with his top two ministers to seek common ground after they presented conflicting plans to address the nation's struggling economy, a government source informed Reuters on Sunday.
A document from Christian Lindner's finance ministry, leaked last week, sparked concern in Berlin. Its call for tax cuts and fiscal restraint was widely seen as a challenge to Economy Minister Robert Habeck's multibillion-euro investment plan, announced just days prior.
This stand-off marks another escalation in the ongoing dispute over economic and industrial policy among the FDP, the Greens, and Scholz's Social Democrats, fueling speculation about the coalition's potential collapse, especially with elections looming less than a year away.
However, a government source revealed to Reuters that Scholz and the ministers will hold several meetings in the coming days, stating, "Now that everyone has presented their proposals, we need to see how they align with each other."
The deteriorating business climate in Europe's largest economy has deepened divisions within Scholz's ideologically diverse coalition regarding policies to boost growth, safeguard industrial jobs, and strengthen Germany's status as a global industrial leader.
While Habeck advocates for the establishment of a fund to stimulate investment and bypass Germany's stringent fiscal spending rules, Lindner pushes for tax cuts to invigorate the economy and an immediate freeze on new regulations.
SPD leader Lars Klingbeil expressed willingness to discuss Lindner's proposals in a local newspaper interview but noted that some were unfeasible for his party, which unveiled its own economic strategy earlier in October.
"Giving more to the wealthy, extending working hours, and delaying retirement—it will come as no surprise that we consider this the wrong approach," Klingbeil told the Augsburger Allgemeine newspaper.
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