How Germany's coalition works and could it fall apart?

By Sarah Marsh

BERLIN (Reuters) - The three parties in Germany's ruling coalition are facing increasing pressure to assert themselves following a series of regional election blows and dismal polls, raising doubts about whether it will hold together until next year's national vote.

On Wednesday, the leaders of the junior coalition partner the Greens said they would step down.

Here's how the coalition works, why it is under pressure and what could lead to it falling apart: 

WHO IS IN GERMANY'S GOVERNMENT?

Germany's government is an ideologically heterogeneous coalition comprising Chancellor Olaf Scholz's Social Democrats (SPD), the environmentalist Greens party and the business-minded Free Democrats (FDP).

When formed in late 2021, it was the first such coalition ever at a national level and promised to speed up digitalisation and the transition to a carbon neutral economy.

WHY IS THE COALITION UNDER STRAIN?

All three parties in the ruling coalition have faced a string of dismal electoral results lately even as populist parties on both sides of the political spectrum have surged.

The Greens were ejected from two regional parliaments this month after failing to reach the 5% threshold to enter. The FDP was also ejected from a regional parliament, while failing to re-enter two others it had already fallen out of.

At a national level, the three parties are polling less combined, on around 30%, than the opposition conservatives, and Scholz is the least popular chancellor on record. Once considered one of two big-tent parties in Germany, his SPD is polling in third place behind the conservatives and the far-right AfD.

The opposition says the coalition no longer has the legitimacy to keep governing and has urged it to call snap elections, as French President Emmanuel Macron did earlier this year.

WHY IS THE COALITION SO UNPOPULAR?    

The coalition took office shortly before the outbreak of the Ukraine war, which ended cheap Russian gas deliveries to Germany, Europe's largest economy, accelerating a cost-of-living crisis and fears of de-industrialition.

That bleak economic situation has made voters less receptive to the government's costly green policies.

The arrival of more than one million Ukrainian refugees also stoked concerns about irregular migration and the strain it is placing on public services. Germany had already taken in more than a million migrants largely from the Middle East in 2015/16.

A constitutional court decision last year has added to the coalition's woes, forcing it to significantly cut spending.

   Finally, public infighting within the coalition has fostered doubts about its ability to deal with the multiple crises facing the country. The FDP's fiscally hawkish stance in particular has put it at odds with the SPD and Greens over the budget.

COULD THE GOVERNMENT FALL APART?

Until now, the FDP has been seen as the party that coexists most awkwardly with the two other partners and most likely to leave the coalition.

The leader of the FDP on Monday suggested it might be better for the coalition to end if it is unable to agree a series of policies in coming months, calling it an "autumn of decisions".

Even before this month's electoral blows, FDP members had held a poll earlier this year on whether to stay in the coalition, only narrowly voting in favour.

With the unexpected decision of the Greens leadership to resign, however, that party could now also become a flight risk, say analysts.

WHAT HAPPENS IF ONE PARTY LEAVES?

If one party leaves the coalition, the other two could continue as a minority government but would likely struggle to pass laws and thus to govern.

On the rare occasions that this has happened in the past, it has led to political crises prompting the formation of a new coalition, without new elections.

In 1966, the withdrawal of the FDP led to then-conservative Chancellor Ludwig Erhard resigning as chancellor a month later and his party forming a new coalition with the SPD.    

In 1984, the withdrawal of the FDP led a month later to a constructive vote of no confidence in then-SPD chancellor Helmut Schmidt and election of the conservative Helmut Kohl as his successor. Kohl formed a new coalition with the FDP and triggered early elections to legitimize his mandate.

CAN THE CHANCELLOR CALL AN EARLY ELECTION?

No, in Germany the chancellor cannot call a snap election but can effectively trigger one by calling a vote of confidence. If the chancellor loses it, Germany's president can dissolve parliament and call an early election in a system designed to preserve stability.

(Reporting by Sarah Marsh; Additional Reporting by Andreas Rinke; Editing by Gareth Jones)