Germany: Political Blockade Prevents Extension of Ulrike Malmendier's Term on Council of Economic Experts

The German federal government will not extend the mandate of Professor Ulrike Malmendier on the prestigious Council of Economic Experts. Her term will expire on February 28, 2026, because the governing coalition failed to achieve the required unanimity on the matter. According to the procedure, the decision to appoint or dismiss a council member requires the unanimous consent of the entire federal government. Chancellor Olaf Scholz (SPD) and Finance Minister Christian Lindner (FDP) advocated for continuing cooperation with the economist. However, Economics and Climate Protection Minister Robert Habeck of the Green Party holds the opposite view and – according to press sources – is blocking the decision. This dispute reveals internal tensions within the SPD, Greens, and FDP coalition and the political nature of decisions regarding the composition of a theoretically independent body. Ulrike Malmendier, a professor of behavioral economics at the University of California, Berkeley, was the only woman in the five-member council. She was known for her direct and often critical assessments of government actions, particularly regarding fiscal policy and the implementation of the energy transition. Her stance, described in the media as "inconvenient," likely became the main reason for the political blockade. A federal government spokesperson confirmed there is no agreement on the matter, which in practice means the end of her membership. „„Malmendier ist politisch keinem Lager zuzuordnen.”” — Handelsblatt The Council of Economic Experts was established in 1963 to provide the government and parliament with objective economic analyses. Its members are appointed by the Federal President for five-year terms upon the proposal of the federal government, which must decide unanimously. Throughout the council's history, there have been disputes between its members and the government; however, not renewing the term of an active member, especially due to a lack of political consensus, sets a precedent and raises questions about the institution's independence. The decision has been met with criticism in the German media. "Süddeutsche Zeitung" described the situation as "sad for political advisory," emphasizing that Malmendier was "sacrificed." "Handelsblatt" pointed out that the economist is not affiliated with any political camp, which further highlights the nature of the dispute. Habeck's lack of consent, representing the Greens, shows that the resistance does not stem from a classic left-right divide but from specific, substantive disagreements regarding economic policy. Malmendier's departure will deprive the council not only of its only woman but also of a unique perspective from behavioral economics, which studies irrational factors in economic decision-making. It is not yet known who will replace her. The process of selecting a new member could be equally controversial, and the incident itself has cast doubt on the mechanisms protecting the council from excessive political influence.