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Germany is heading for early elections, ending its fractured coalition government, after Chancellor Olaf Scholz lost a confidence vote at a time of stress for the eurozone's biggest economy.
ScholesMonday's defeat by 207 to 394 votes paved the way for the dissolution of parliament ahead of primary elections on February 23.
In pre-election polling, the chancellor and her centre-left Social Democrats are trailing both the opposition CDU and the far-right Alternative for Germany (AfD).
Scholz's widely anticipated defeat sends Germany The election comes amid a gloomy economic outlook, a trade war with the US and political turmoil elsewhere in Europe.
The Bundesbank warned last week that Europe's biggest economy would grow by just 0.1 percent in 2025.
Debates over immigration and military support for Ukraine are other divisive issues in an election in which the AfD and other populist parties are expected to make big gains.
The SPD and their coalition partners, the Greens, lost their parliamentary majority last month when Scholze fired his finance minister, Christian Lindner, head of the liberal FDP party.
The collapse of the so-called traffic light coalition followed months of wrangling over the budget and how to meet the country's huge investment needs, defense and social spending.
"Politics is not a game," Scholes said in a speech to lawmakers before the vote. "The question is whether and how we invest in our country."
The traffic light coalition "has been a bold project from the beginning . . . but it is a project that has failed", said Andrea Rommel, professor of communication in politics at Berlin's Herti School.
France is also facing political turmoil, with the defeat of Michel Barnier's government in a confidence vote this month.
Other European governments are also bracing for the return of Donald Trump as US president, who has threatened to impose universal tariffs of up to 20 percent on imports and demanded a brokered deal to end the war in Ukraine.
Scholz's government was the first three-party coalition in Germany's postwar history. Taking office in December 2021, the administration vowed to usher in a green industrial revolution for the eurozone country.
But plans were derailed when Russia invaded Ukraine three months later, forcing Berlin to reverse decades of dependence on Russian gas and reverse its defense and foreign policy.
Scholze called the challenge facing the country a "zeitenwende" or a turning point in history, allocating €100bn to modernize the army and supply arms to Ukraine.
He suffered his biggest blow yet when the country's Constitutional Court rejected the coalition budget in November 2023. The court ruled that this violated a constitutional provision that limits new public borrowing to 0.35 percent of a year's GDP.
The decision left a €60bn hole in the country's public finances and led to a rift between the fiscally conservative FDP and its coalition partners in the SPD and the Greens.
"We now need fundamental change," said Guntram Wolf of Bruegel, a think-tank. “The business model just has to be a different one. It will no longer depend on cheap Russian gas, the US for security and China for exports. This time is over. "