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A snap election would likely usher in a new government led by the center-right Christian Democratic Union (CDU), which currently leads in polls by a wide margin. CDU leaders have taken a sharp turn to the right on migration in recent years, while also advocating for more robust military aid for Ukraine.

Central to the current coalition disagreements was the adoption of the 2025 budget by parliament — in which a gap of at least €2.4 billion, and potentially far more, needs to be filled — as well as an agreement on measures to revamp the country’s ailing economy.

Crisis talks in the coalition came to a head after Lindner issued a policy paper with demands for liberal economic reforms that were difficult for the other two parties to accept, calling for tax cuts and a scaling back of climate policies in order to stimulate economic growth — both positions that put the party at odds with its coalition partners.

Trump’s victory is expected to put heavy pressure on Europe’s largest economy. An analysis from the German Economic Institute (IW) estimates that a new trade war could cost Germany €180 billion over Trump’s four years in office.

Many in Germany had hoped that the victory of Donald Trump in the U.S. election earlier in the day would force the coalition to hold together over fears that the incoming president would give Europe’s biggest economy a hard ride.

Ultimately, however, not even the looming threat of Trump proved enough for the fractious parties to put aside their differences.

“This evening feels wrong and not right,” said Robert Habeck, the Green economy minister. “Downright tragic on a day like this, when Germany has to show unity and the ability to act in Europe.”

This story is being updated.

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