Scholz seeks to save German govt as crisis talks near crunch point

A crisis rocking German Chancellor Olaf Scholz's fractious three-party coalition was headed for a potential crunch point Wednesday, amid fears the government could collapse.

Discord over how to revive a flagging economy and carve up a tight budget has flared between Scholz's Social Democrats (SPD) and his junior partners, the Greens and the Free Democrats (FDP).

A do-or-die moment could come when the three disagreeing parties, after a series of crisis talks to resolve the deadlock, are due to meet for coalition committee talks Wednesday evening at the chancellery.

Finance Minister Christian Lindner of the business-friendly FDP has demanded sweeping economic reforms and has openly flirted with the idea of leaving the unhappy alliance ahead of scheduled elections next September.

He has repeatedly spoken of an "autumn of decisions" when deadlines for tricky budget talks loom—a phrase widely read as a threat after a previous fiscal row almost ended the alliance in July.

If he were to leave, this could spark snap elections, likely around March—or leave Scholz and the Greens trying to cling to power in a minority government until next summer.

The row has heightened uncertainty in Europe's biggest economy at a volatile time as the world nervously awaits the U.S. election outcome and wars rage in Ukraine and the Middle East.

Scholz and his mutinous coalition partners have drawn withering fire from conservative opposition leader Friedrich Merz, who has demanded new elections in which polls suggest he would be the frontrunner.

'Slow-motion train crash' 

As the German economy is expected to shrink for a second year in a row, Lindner has demanded sweeping measures, including corporate tax cuts,...