Many consequences This is how severe the consequences of the government crisis are for the people

Politics is sometimes abstract and distant. What do Germans care if the parties can't get along? The answer is: quite a lot. The consequences of the crisis could be huge.

Now of all times, in the middle of an economic crisis, in the middle of the war in Ukraine, in the middle of great uncertainty following the elections in the United States - now of all times, the traffic light coalition in Berlin is breaking down.

In a survey for the ARD Deutschlandtrend yesterday, 65% were in favor of a new Bundestag election as soon as possible. In the ZDF Politbarometer, 54% are also in favor of an earlier election than Chancellor Olaf Scholz (SPD) is planning. Nevertheless, the political confusion has some consequences that will be felt by almost everyone in the country.

The break-up of the traffic light system means that the remaining government of SPD and Greens no longer has its own majority in the Bundestag - not even for passing the federal budget. What sounds technical affects millions of people. There could be budget freezes as early as this year if the Bundestag does not allow the government to take on additional debt.

This could mean, for example, that subsidies for house building will no longer flow. If the government fails to pass the budget for 2025, the year will begin with provisional budget management. Compulsory benefits such as the Citizen's Income will then continue to be paid. However, anything that is not mandatory, has not been enshrined in law or has already begun may be put on hold.

For example, the Deutschland-Ticket could be discontinued. Or public construction projects could fall through. Left-wing politician Gesine Lötzsch mentioned 5,000 bridges that need to be renovated on ZDF: "We can't put things on the back burner." But it's also about subsidies for age-appropriate housing, climate-friendly construction and more.

Thousands of employees with project contracts have to worry about an extension at the end of the year. These include social projects such as a lesbian and gay association or the peace service Aktion Sühnezeichen, as well as associations that work to strengthen democracy. They are often at the top of the list of organizations to be cut. In concrete terms, this means that jobs are being lost.

Marcel Fratzscher, President of the German Institute for Economic Research in Berlin, says: "The most urgent task in the coming months will be to pass the 2025 federal budget, otherwise the damage to the economy and society will be even greater."

Former Finance Minister Christian Lindner (FDP) had actually planned billions in tax relief - not only for companies, but above all for ordinary citizens. It is now completely unclear whether this will actually happen, as the remaining government would need the help of the CDU/CSU.

From January, child benefit was to increase, as was the immediate child allowance for low-income families. It is quite possible that this will not work out for the time being. There is also the threat of a higher tax burden. This is because the broken traffic light was actually intended to ensure that taxpayers do not suffer even more from high inflation.

It could now happen that the so-called cold progression is not absorbed - in other words, that citizens will have to pay more to the tax authorities due to the rising tax rate even if their salary increase only compensates for inflation.

Fratzscher believes that the government should not focus on this for the time being. "There are more urgent needs that would better help the German economy," he said. For citizens, however, this means less net from gross.

Not immediately measurable, but noticeable for almost everyone: people in Germany react to uncertainty, whether political or economic.

"The economy and citizens want a certain amount of stability, they want to know what lies ahead," says Dresden political scientist Hans Vorländer. "We have great demands and expectations of the state. This plays a greater role here than in other countries such as the USA."

His colleague Karl-Rudolf Korte from the University of Duisburg-Essen even said on ZDF: "We are stability fanatics." He refers to the fact that the Basic Law is actually designed to avoid political deadlock.

The German social systems are also so sophisticated because there is a great need for security. Phases of uncertainty can also lead to people delaying purchases and keeping their money together.

What worries private individuals affects companies all the more. "The end of the traffic light government will increase uncertainty and political paralysis in the coming months," expects DIW head Fratzscher. "This is likely to cause further economic damage and weaken the German economy at a time when it is already very weak and battered."

Fratzscher is a proponent of an "expansive fiscal policy" - the state should stimulate the economy with additional investment in times of crisis or recession. Which will be difficult if no budget is passed for the time being. At the same time, political scientist Vorländer points to the need for predictability. Will we continue in the direction of climate protection or will we stick with coal for longer? Will we continue to rely on e-cars or will diesel cars remain on German roads for longer?

"The traffic lights had started a major transformation, but the different conceptual approaches just didn't fit together," says the Dresden scientist. "But politicians had set a direction, and that's what's missing now. For sectors like the automotive industry, this can be existential."

The government crisis has left many people with fundamental doubts. Will politics really become calmer and more predictable again after a new election? "We have a lot of crises that are simultaneously stressing and unsettling us," says Vorländer. "We actually need an indication of direction. Otherwise there is a fear that the direction will soon be changed again." The political scientist is certain: "The shorter the period of disorientation, the better."

dpa