Germany’s Chancellor Olaf Scholz lost a vote of confidence on Monday, which will result in the collapse of his government, the dissolution of the current Bundestag, and new elections on Feb. 23.

Scholz deliberately brought about the vote in an attempt to end the ongoing political stalemate after the “traffic light” coalition of Social Democrats (SPD), Liberals (FDP), and Greens collapsed last month. Rather than resolving the crisis, Scholz fell humiliatingly short of the 367 votes he needed to remain in office.

Of the 717 votes cast on Monday afternoon, 394 members voted against him, 207 voted for the chancellor, and 116 abstained. The current red-green government, which does not have a majority, will remain in office in a caretaker capacity until after the election. Of the 83 Alternative for Germany (AfD) deputies, three surprisingly supported Scholz. They see him as less likely to embroil Germany even deeper than it already is in the conflict in Ukraine than the likely winner of the forthcoming election, Christian Democratic Union leader Friedrich Merz. Scholz has refused to supply Ukraine with the sophisticated Taurus missile system, which Merz intends to approve if elected. 

It is not foreign affairs but the state of the economy that will decide the election, and most Germans are gloomy about the future. Earlier in the day on Monday, the country’s leading debt collection service provider, Creditreform, announced that the number of bankruptcies in Germany has risen sharply.

“With some delay, the crises of recent years are now having an impact on companies as bankruptcies,” said the head of Creditreform’s economic research, Patrik-Ludwig Hantzsch. “The economic standstill and the declining innovative strength have weakened Germany as a business location. We therefore expect a further increase in cases in 2025.” 

The number of personal bankruptcies may soon approach levels last seen during 2009, the last year of the so-called Great Recession. Creditreform says the main reason is the sharp increase in the cost of living and higher interest rates on loans. The noticeable reduction in well-paid jobs in recent years is making the situation worse. 

According to the latest forecast published last week by the authoritative Kiel Institute for Economic Research (IfW),  the German economy is not expected to grow in 2025, but rather to stagnate. In the current calendar year, the Federal Republic’s economic output is likely to shrink by 0.2 percent, and the unemployment rate will rise to 6.3 percent in 2025.

Domestic political decisions have also led to the current economic situation according to the IfW. Due to the declining competitiveness of companies, Germany has recently “no longer been able to keep pace with world trade.”

“Germany’s weak growth is clearly evident and any unforeseen external disruptive factor can mean the difference between a plus or a minus in economic output,” said Kiel Institute President Moritz Schularick.

Amid all the gloomy economic news, the results of Monday’s vote provide at least one comforting thought for the Germans: The Green Party’s climate fanatics will no longer be in a position to make any disastrous economic policies after Feb. 23.