German Chancellor Olaf Scholz has lost a confidence vote in parliament, triggering snap elections seven months ahead of schedule.

The vote on Monday came after Scholz’s fragile coalition collapsed, sparking a political crisis in the European Union’s largest economy.

Olaf Scholz failed to secure the support of the German Bundestag, as he garnered just 207 votes from lawmakers in the 733-seat lower house. To win, he needed a majority of 367 votes, but he fell significantly short, with 394 members voting against him and 116 abstaining. This setback comes ahead of the upcoming parliamentary elections, which are set for February 23.

The political situation has been further complicated by the recent turmoil within the governing coalition. Scholz’s decision to dismiss Finance Minister Christian Lindner in November led to a crisis within the coalition, as Lindner’s pro-business party, the Free Democrats, subsequently left the government. This departure left Scholz without a parliamentary majority, intensifying the political instability ahead of the next elections.

Scholz’s centre-left Social Democrats (SPD) and the Greens will continue running the country without parliamentary backing until a new government is formed.

Monday’s development came after months of infighting over fiscal priorities and debt spending.

Scholz, who previously served as finance minister before becoming the head of a new government in 2021, accused the Free Democrats of wanting to block investment in Germany.

He has framed the snap elections as an opportunity for voters to set a new course, casting it as a choice between a future of growth versus one of austerity.

If he is given a second term, Scholz said he would invest heavily in Germany’s creaking infrastructure and would not make the spending cuts he said the conservatives want.

Scholz and the leader of the conservative Christian Democratic Union, Friedrich Merz, who polls suggest is likely to be the next chancellor, clashed in a debate before Monday’s vote, accusing each other of incompetence.

“Shortsightedness might save money in the short term, but the mortgage on our future is unaffordable,” Scholz told lawmakers.

Merz told Scholz that his spending plans would burden future generations and accused the chancellor of failing to deliver on promises of rearmament since Russia’s invasion of Ukraine.

The conservatives have a comfortable, albeit narrowing lead of more than 10 percentage points over the SPD in most polls.

The far-right Alternative for Germany (AfD) is slightly ahead of Scholz’s party while the Greens are in fourth place.

The mainstream parties have refused to govern with the AfD, but its presence complicates parliamentary politics, making unwieldy three-way coalitions like Scholz’s more likely.

Meanwhile, the chancellor has outlined a list of urgent measures that he could pass before the elections, including 11 billion euros ($11.6bn) of tax cuts and an increase in child benefits.

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