BERLIN (Reuters) - German Economy Minister Robert Habeck said on Thursday that Chancellor Olaf Scholz was right to fire the finance minister, spelling an end to the coalition government, and insisted that Germany was still capable of functioning.

Christian Lindner of the fiscally conservative Free Democrats had been unable to complete the fundamental task of forming a budget and lost the respect of the other cabinet members, Habeck told Deutschlandfunk radio.

"In this respect, the chancellor's decision was a logical one. It was consistent and necessary at this point," Habeck added.

Germany's ruling coalition collapsed on Wednesday when years of tensions in the three-way alliance between Scholz's Social Democrats reached their peak in a row over economic and fiscal policy.

The collapse paves the way for a snap election, triggering political chaos in Europe's largest economy after Donald Trump won the U.S. presidential election.

Asked if Germany was still capable of functioning, Habeck told the broadcaster: "Yes, of course we are," adding however that "we no longer have a majority in parliament."

Habeck added that he had no intention of serving as interim finance minister.

(Reporting by Rachel More, editing by Miranda Murray and Thomas Seythal)