German Politics in Times of Crises: The Success of the Post-Merkel Conservatives in the 2025 Federal Election

Introduction

In the first two decades of the 21st century, Germany experienced a level of government continuity unparalleled in the European Union (Helms, 2025; Hutter and Kriesi, 2019). Still, the 16-year chancellorship of Angela Merkel (2005–2021) not only overshadowed but also contributed to the critical state of German politics, shaped by widespread insecurity over economic and cultural change in times of global crises (Decker, 2024; Grotz and Schroeder, 2021; Kneip et al., 2020; Nachtwey, 2018; Schmidt, 2023). Already during Merkel's tenure, many Germans were ‘idle democrats’, convinced of the normative value of political participation but doubtful of their capacity to make an impact (Weisskircher and Hutter, 2019). In many policy areas, limited responsiveness on fiscal matters has been a key challenge (Elsässer and Haffert, 2022). Consequently, Merkel's successor Olaf Scholz and his ‘traffic light’ coalition of social democrats, greens and liberals promised ‘new beginnings’ (Faas and Klingelhöfer, 2022). However, the fate of this coalition turned out to be more familiar to observers of contemporary European politics than Merkel's long reign: after only one legislative period, cut short by snap elections, the parties of Scholz's government coalition suffered heavy defeat.

Four years after the end of Merkel's last government, then, Germany's conservatives returned to power, or at least to government. In February 2025, CDU/CSU1 won the federal election, even though electoral support (28.5%) fell short of expectations. CDU leader Friedrich Merz became the new chancellor, forming a coalition with the SPD, now at a record-breaking electoral low (16.4%). The 2025 campaign and subsequent government negotiations were shaped by a collective uncertainty not only about how but whether major contemporary challenges – in particular, a lack of economic growth, Russia's war against Ukraine and immigration – can be effectively responded to at all. This was further exacerbated by the inauguration of the new Trump administration in the United States and ongoing geopolitical turmoil. At the time of government formation, some polls saw the electoral winner CDU/CSU already trailing behind the far-right AfD, which was endorsed by none other than Elon Musk – the richest person on the planet and a key advisor to Trump.

Germany's new chancellor Merz, born in 1955, earned more modest wealth through his own business activities. Five years in the European Parliament (1989–1994) and 15 years in the German Bundestag (1994–2009), he was sidelined in the early 2000s after losing the power struggle against his key intra-party rival, Merkel, for CDU leadership. In 2008, he published the book Daring More Capitalism. Entering the private sector, the educated lawyer became a multi-millionaire, amongst other roles as board member of Deutsche Börse Group and BlackRock Germany. In 2018, Merz self-described as a member of the ‘upper middle class’. Serving as chancellor is his first executive role in politics.

Differences from Merkel concerned not only private wealth but, importantly, also public policy. On immigration, Merz was eager to reverse the CDU's liberal image that had marked the Merkel era since the ‘refugee crisis’. On fiscal austerity, a pillar of German common sense since the introduction of the balanced budget amendment (‘debt brake’) in 2009, Merkel and Merz seemed much closer – until after the election, when Merz suddenly accepted SPD demands for unprecedented government spending on military and infrastructure, quite the opposite of his campaign rhetoric. Merkel, instead of celebrating CDU victory, spent the day after the election in Vienna, Austria, promoting her autobiography. When she later supported the new government's immigration pledges, emphasizing that she has also always favoured a reduction of ‘illegal’ immigration, her Parteifreund Merz publicly questioned the self-portrayal of the Altkanzlerin. Ironically, it was not the Scholz government of social democrats, greens and liberals but the return of the conservatives that might cause an increased political distance to Merkel's 16 years of chancellorship.

This article provides an in-depth analysis of the 2025 federal election, considering the key developments leading to the CDU/CSU's victory. First, the article discusses the dysfunctional outgoing Scholz government and the unresolved conflict over fiscal policy in the context of economic stagnation. Second, it moves to the regional elections in three eastern German states in September 2024, where the far-right AfD performed strongly, but the CDU continued to rule out co-operation. Third, the focus shifts to the federal election campaign, during which the relationship between the CDU and AfD once again became a central issue. Fourth, the article discusses the election results as well as, fifth, the subsequent coalition negotiations that found Merz making substantial concessions. The conclusion discusses the broader implications of the critical state of German politics.

I The Dysfunctional ‘Traffic Light’ Coalition

The Scholz government did not enjoy an easy start. Whilst the COVID-19 pandemic came to an end, Russia's invasion of Ukraine occurred only two-and-a-half months after the new government took over. For German politics, the war constituted a major break. First, the questions of arms transfer to Ukraine and Germany's own military investment became highly salient. Even though chancellor Scholz quickly announced a substantial increase in military spending (Zeitenwende), the issue of military support to Ukraine remained highly controversial also within the coalition. Greens and most of the FDP strongly favoured more military aid, whilst much of the SPD, including Scholz, remained cautious. Second, the break with Russia had severe consequences for Germany's energy supply, not least because it coincided with the phase-out of nuclear energy and Germany's expansion of renewables in the context of ‘energy transition’. Most notably, the Nord Stream 2 pipeline was never put in operation. As a consequence, both private consumers and companies, especially those in the industrial sector, struggled with high energy prices. Responses included a diversification of fossil fuel supply, including LNG terminals, especially for US imports, and deals with countries such as Norway and Qatar.

In addition, Germany faced another long-term economic challenge: a visible lack of public investment (Investitionsstau) in sectors such as infrastructure, from the grid to trains, education, digitalization or health. For example, Deutsche Bahn (German Railway) alone has identified a need for up to €150 billion in investments by 2034. In 2023, Germany's municipalities faced an investment backlog amounting to approximately €185 billion (KfW, 2024). In 2023 and 2024, GDP declined. The Ifo Business Climate Index, a survey of companies' expectations, fell to one of its lowest levels ever.

Initially, the Scholz government planned fiscal stimulus based on the reuse of €60 billion in credit taken by the previous government: In 2021, the emergency situation of the COVID-19 pandemic had allowed the Merkel government – with Scholz as finance minister – to bypass the ‘debt brake’. In the end, this credit was never used, which is why the new coalition decided to redirect it to the government's Climate and Transformation Fund. This compromise was expected to enable the SPD and the Greens to invest, whilst the FDP could still claim to uphold fiscal ‘discipline’ – a priority for FDP leader and finance minister Christian Lindner. In November 2023, however, following a complaint by CDU MPs, a Constitutional Court decision put an end to this compromise as it deemed the reallocation of the pandemic-related credit as an unconstitutional bypassing of the ‘debt brake’.

This decision signalled the beginning of the end for Scholz's chancellorship. Afterwards, his traffic light coalition was blocked by unresolved negotiations over investment decisions combined with infighting and public expressions of distrust by its key protagonists. Remarkably, in an August 2024 TV interview, then Green party co-leader Omid Nouripour referred to his own coalition as ‘transitional government’, stating that ‘it's obvious that trust has reached its limits’.

II A Strong Sign of Dismay: Elections in Eastern Germany

The final warning for the governing parties came a month later. Three eastern German states – first Saxony, and Thuringia (September 1), then Brandenburg (September 22) – held regional elections (Völkl, 2024). After reunification in 1990, Germany has been marked by a strong east–west divide. By now, the former territory of the German Democratic Republic has become the AfD stronghold (Weisskircher, 2020). Already at the European Parliament elections in June, the AfD was the east's strongest political force. Correspondingly, the mainstream parties did not have high hopes ahead of the vote.

Even worse for them, the elections also brought the regional breakthrough of Sarah Wagenknecht's (BSW) as additional ‘anti-establishment’ competitor. The former leader of The Left ran on a platform combining left-wing economics and cultural conservatism. This unique constellation quickly attracted interest amongst political scientists in Germany, especially regarding the question of whether the BSW would be able to convince AfD sympathizers to change sides (e.g., Wagner et al., 2023).

Competition from two anti-establishment parties threatened not only the mainstream parties' electoral performance but also risked complicating majority formation. The mainstream parties responded by including the new challenger. Facing reality, the SPD announced its openness to co-operation with the BSW at the subnational level – though not in national politics, due to the BSW's rejection of arms transfers to Ukraine. Conveniently, the BSW also did not fall under the CDU's ‘incompatibility resolution’, despite comprising former leading members of The Left. The CDU's internal policies only prohibited ‘cooperation’ with both the far-right AfD and The Left, the successor to the GDR's ruling party.

The results were mostly as expected (see Table 1). Perhaps most surprising was that the SPD could narrowly hold its first place in Brandenburg (30.9%, +4.7), with Dietmar Woidke successfully tying the continuation of his work as regional governor to staying ahead of the AfD (29.2%, +5.7). Government formation went relatively smoothly: BSW became the SPD's new junior coalition partner, replacing CDU and the Greens.

In Saxony, the reigning CDU (31.9%, −0.2) narrowly stayed ahead of the AfD (30.6%, +3.1). There, government formation was more difficult than in Brandenburg. CDU, BSW and SPD held exploratory talks but could not reach an agreement. Ultimately, CDU and SPD formed Saxony's first minority government since 1990.

In Thuringia, AfD celebrated a landslide victory. Under the leadership of Björn Höcke, it gained 32.8% of the vote (+9.4), clearly ahead of the CDU (23.6%, +1.9). The Left, the party of incumbent governor Bodo Ramelow, lost more than half of its vote share (13.1%, −17.9). The only working government constellation was a three-party coalition of CDU, BSW and SPD – notably, still one seat short of a majority.

To be sure, the biggest losers of the elections were two of the three parties in national government: the Greens failed to re-enter the regional legislatures in Brandenburg and Thuringia, barely surviving in Saxony. The FDP could only lose representation in Thuringia – and it did – and thus became an electorally irrelevant party in the east. Apart from the government coalition, also The Left faced electoral disaster in their former stronghold.

A few years ago, the results of September 2024 would have dominated national headlines for weeks. By now, it has become clear that convergence between Germany's east and west is an unrealistic assumption and that long-term differences in political culture will persist (Mau, 2024). This time, expectation management was so heavily focused on a major AfD success that the actual results failed to provoke any lasting public outcry. Undoubtedly, the AfD was the big winner of the elections, but it ‘only’ secured first place in one state and failed to become a key player in the coalition game – the CDU continued to reject governing with the far right. Some voices within the CDU's eastern branches calling for co-operation failed to gain traction. In stark contrast to the AfD, the ‘anti-establishment’ BSW immediately entered two regional governments.

Merz, with his eyes on the federal election, had reasons to be satisfied: at the end of the day, the CDU defended (Saxony) and even gained one (Thuringia) regional governorship. The unconformable question of co-operation between the CDU and the AfD seemed off the table – until Merz himself made it a topic in early 2025.

III The Bundestag Electoral Campaign

By the end of 2024, the Scholz government appeared highly unstable, with many expecting the FDP to jump ship. Its performance in the regional elections was obviously disastrous. National polls also signalled the liberals' goodbye from parliamentarism. The only momentum for the FDP might have come from breaking up the coalition. For months, Lindner blocked further public investment and accused his partners of fiscal irresponsibility. On 6 November, one day after the US presidential election, chancellor Scholz took the initiative, asking President Frank-Walter Steinmeier to dismiss Lindner as finance minister. Until election day, SPD and Greens, together with one FDP minister loyal to them, remained in office.

The dismissal of Lindner constituted one of the rare moments in which Scholz appeared as an active agent. However, his momentum was quickly curbed. After some back and forth, the snap election was scheduled a few weeks earlier than Scholz would have preferred. More severely, until January 2025 – one-and-a-half months before the election – the SPD debated whether Scholz should run at all or be replaced by the more popular defence minister Boris Pistorius. It was an embarrassing debate for a sitting head of government, reminiscent of Joe Biden's political fate.

Given the lack of growth, everyone expected an electoral campaign focused on economics. In the months before, bad news did not seem to stop: most notably, Intel halted its chip plant project in the eastern German city of Magdeburg – a pet project of green minister of economics Habeck, who had approved €10 billion in public subsidies. In response to the general malaise, Merz called for an economic turn (Wirtschaftswende), promising significant tax cuts, though without clear details on how they would be financed.

Then things changed as the winter period saw several deadly attacks committed by perpetrators of immigrant background. A close look at the most discussed cases underlines the complexities behind the phenomenon: on 20 December 2024, in Magdeburg, a man drove a car into a Christmas market crowd, killing six people and injuring more than 300. Born in Saudi Arabia and working as a doctor, early rumours, partially spread by the far right, framed this as Islamist attack. Social media posts, however, suggest that the perpetrator thought himself as a radical critic of Islam. On 22 January 2025, in Aschaffenburg, a 28-year-old Afghan who entered Germany in 2022 and had his asylum application rejected, stabbed a 2-year-old boy of Moroccan descent and a 41-year-old German to death and injured three others, including a 2-year-old girl of Syrian descent.

These attacks, along with the parties' responses, brought immigration more generally to the forefront of the agenda. For the AfD, it has been the core issue since the mid-2010s (Arzheimer, 2019). All other parties have long struggled how to respond, both in terms of public discourse and especially in terms of legislation. After the breakup of the traffic light coalition in November, Merz announced that he would not rely on the AfD for common majorities. This changed after the attacks. On 29 January, together with votes from AfD and FDP, CDU/CSU passed a resolution demanding restrictive policy change on immigration. This was the first majority decision in the Bundestag that relied on AfD votes. Two days later, a legislative bill on restricting immigration fell through – too many MPs from CDU/CSU and FDP stepped out of line. Merz justified his legislative actions by pointing to the failed negotiations with the SPD and the Greens to reach a new consensus on immigration policy.

Exceptionally, Angela Merkel published a critical statement in which she highlighted the contradiction between Merz's previous statement and his legislative behaviour only a few weeks later (Merkel, 2025). For the remainder of the campaign, Merz faced heavy criticism from the SPD, Greens and The Left for relying on AfD votes to secure majorities. Hundreds of thousands protested Merz's actions in street demonstrations. Substantially, many of Merz's demands on immigration would find their way into his government's coalition treaty.

Notably, Ukraine was relatively absent as a campaign issue. The most controversial aspect – whether Germany should deliver Taurus cruise missiles or not – was hardly salient, probably to the disadvantage of BSW.

IV Election Results

The federal election was held on 23 February 2025. Turnout was 82.5%, marking the highest level since 1987. Table 2 provides an overview of the results in comparison with previous elections.

Although the CDU/CSU won 28.5% (+4.4), the result was their second weakest since 1945. It was the second time they had received less than 30%. Before the election, several key conservatives had expressed hopes for a higher result. CDU's general secretary Linnemann, for example, called for ‘clearly more than 30 percent’ (FAZ, 2025). The strong focus on anti-immigration claims during the campaign and a joint vote with the AfD did not seem to boost the party's electoral fortunes. The conservatives won support especially from former SPD, FDP and non-voters, but lost to the AfD. Its strongest electorate was pensioners.2 The CDU's Bavarian ‘sister party’, the CSU – which runs only in Bavaria and is part of the CDU/CSU ‘Union’ and its combined voting results – won a solid 37.2% (+5.5), which is 6% of Germany's total vote. During the campaign, Merz was supported by Bavaria's regional governor and CSU leader Markus Söder, an ambitious and eloquent troublemaker, who also has had his eyes on the chancellorship.

The AfD achieved a record result of 20.8%, doubling its 2021 support (+10.4). Once again, the party's stronghold was eastern Germany. However, this time, the party was also highly successful in many parts of western Germany, especially in economically struggling areas of deindustrialization such as Gelsenkirchen and Kaiserslautern. Moreover, in three western German states – including the wealthy southern states of Baden-Württemberg and Bavaria – the AfD ended up second. At last, the federal election showed that the strength of the AfD is not exclusively an eastern German phenomenon, but a nationwide challenge. Especially amongst younger generations and self-declared workers, the AfD performed well. Strikingly, over the last few years, Germany's domestic intelligence service – the Office for the Protection of the Constitution – has classified ever more AfD regional branches as ‘definitely right-wing extremist’ (‘gesichert rechtsextrem’), without any negative effect on the party's popularity. In January, in an X talk with Elon Musk, AfD co-leader Alice Weidel, who formerly worked in finance and consulting, referred to Adolf Hitler not as ‘right-wing or conservative’, but as a ‘communist, socialist type’.

The Social Democrats suffered a devastating result, convincing merely 16.4% (−9.3) – not even in the Weimar Republic did the party achieve so little support. In the Federal Republic, the election constituted the first time that social democracy was not amongst the two most successful electoral forces. The frequent assurance that the SPD campaign would take off after the leadership question between Scholz and Pistorius had been settled proved to be an illusion. The SPD lost voters in particular to the CDU and to a lesser extent to AfD, The Left and BSW. Amongst self-declared workers, the social democrats received 12%, whilst it gained its strongest result amongst the retired. Chancellor Scholz announced his resignation as party leader already on election night. Lars Klingbeil, one of the architects of the electoral campaign, became his designated successor.

The Greens also lost, attracting 11.6% (−3.1) of the vote. Historically, this was still the party's second-best result. However, in 2021, the Greens had temporarily polled over 20% – a level that some protagonists still long for. ‘Chancellor candidate’ Robert Habeck, minister of economics, would have preferred a coalition with the conservatives – but the required number of seats was lacking. During the campaign, Habeck once again tried to push for atypical green positions – for example, by emphasizing a tough stance against clan criminality. Here, the party followed Habeck less than after past attempts of Green policy change, such as on arms delivery to Ukraine. After the election, Habeck announced to abstain from future leading roles. Despite the losses at the ballot box, the party will continue to influence government policy due to the high thresholds for constitutional amendments, Germany's strong federalism and the Greens' presence in the second parliamentary chamber (Bundesrat), where they are represented through participation in numerous regional governments.

The most surprising result was the strong showing of The Left. After the terrible performance in the regional elections in eastern Germany, many expected the party to vanish from Germany's party system. Ultimately, against all odds, they received 8.8% of the vote (+3.9). For many years, the party had struggled with a decline of their elderly eastern German voting base, infighting amongst the top personnel, along with disputes over immigration, ‘lifestyle’ issues and foreign policy. However, the party split in early 2024, when former leader Wagenknecht formed her own political formation, allowing for the re-establishment of internal coherence. Another important success factor was the availability of dissatisfied former voters of the governing Greens and SPD, from which The Left drew the most of its new support. The efficient campaign benefited from prominent senior members' last run for direct seats, most notably Gregor Gysi and former Thuringia regional governor Bodo Ramelow, and the younger generation's mobilisation against restrictive stances on immigration and co-operation with the AfD, culminating in a Bundestag speech by top candidate Heidi Reichinnek criticizing Merz, which went viral on social media.

Wagenknecht's BSW did not make it into parliament, falling victim to the comparatively high five percent threshold. Gaining 4.98% less than a year after the party's foundation, BSW lacked a few thousand votes. The party especially attracted former SPD voters, non-voters and The Left voters. In comparison, it hardly gained any supporters from the AfD. We do not know whether the appeal of BSW prevented some Germans from voting for the AfD. What we do know is that the electoral defeat puts the long-term viability of the project into question. Its eponym now lacks a political mandate – after not running for a seat in the European Parliament elections or the eastern German regional elections in 2024. Infighting over who is to blame for the party's weak performance had already started before election day.

The third governing party, the liberal FDP, also failed to pass the threshold, attracting only 4.3% (−7.1). Similar to previous stints in government (Merkel II, 2009–2013), the liberals lost not only their position in government but also their parliamentary presence. Being widely accused of preventing public investment by religiously insisting on the ‘debt brake’, first and foremost by party leader and finance minister Lindner, a campaign focus on the need for fiscal consolidation seemed out of step with the times. In 2017, the liberals managed to return after four years as extra-parliamentary opposition (Franzmann, 2019). It remains to be seen whether the 2025 election has brought about the end of the liberals as staple of German politics. After Lindner's resignation, interest amongst leading FDP figures for party leadership was only limited.

V Coalition Talks

Merz's only realistic government partner was the SPD. CDU/CSU and the Greens lacked a common majority, whilst the FDP was voted out of parliament. Despite the joint vote in January, a coalition with the AfD was not an option for Merz. This setting did not boost his position at the negotiation table.

Interestingly, perhaps the key decision of the new government – the new Sondervermögen – was already passed before the new coalition was formally agreed upon and before Merz took office. Even more notably, these constitutional amendments were enacted before the new legislative period began. In the outgoing Bundestag, CDU/CSU and SPD only needed to bring the Greens on board to secure the required two-thirds majority. Under the new composition, an additional party – either The Left or the AfD – would have been needed. Since a ‘new’ Bundestag must only be constituted within 30 days after an election, conveniently, CDU and SPD took advantage of the composition of the ‘old’ one. A decision by the Constitutional Court upheld the legality of the procedure.

Ironically, then, Merz, performing a fiscal U-turn, became the new big spender in politics before he was even chancellor. To be sure, Sondervermögen is a particularly misleading term: literally, it means ‘special asset’ – exactly the opposite of what it constitutes, which is new government debt not part of the regular government budget. This legal construction can help the government to circumvent the self-imposed constraint that is the ‘debt brake’. For example, Scholz already relied on it to substantially increase military spending after Russia's full-scale invasion of Ukraine.

In the coalition treaty (CDU/CSU/SPD, 2025), agreed upon on 9 April, the parties also decided to reform the ‘debt brake’ by the end of 2025 to allow for more public investment – another move that the CDU had been divided about. Many of its fiscal conservatives such as the late former finance minister Wolfgang Schäuble have strongly identified with a balanced budget (‘schwarze Null’), whilst some leading regional politicians, such as Saxony's governor Michael Kretschmer, have called for more public investment.

Other notable socioeconomic pledges include an unspecified tax reduction for low- and middle-income earners, as well as the stabilization of current pension levels until 2031. The coalition also agreed to raise the hourly minimum wage to €15 – formally, a special commission will have to decide on this matter. The CSU secured an expansion of a pension supplement for mothers. Rules for minimum social security (Bürgergeld) recipients are supposed to become more restrictive. A first decrease of the corporate tax is due for 2028. The agreement also promises a guaranteed electricity price for energy-intensive industries. Moreover, it aims to replace the daily maximum working hours with a weekly rule.

On immigration, CDU/CSU and SPD agreed on more restrictive measures, including the continuation of border controls to EU neighbours – likely in conflict with Schengen regulations, an expansion of the list of ‘safe third states’, a temporary stop of family reunification, a withdrawal from resettlement programs and a reversal of the option for fast-track naturalization, introduced by the Scholz government. The biggest potential for conflict – both within the government and within the EU – concerns the refoulement of asylum-seekers. Here, CDU/CSU and SPD have different interpretations of whether ‘in Abstimmung’ means in consultation with or in agreement with EU neighbours. The government of Austria, which has received more asylum seekers per capita since 2015 than Germany, already announced that it would not accept a unilateral move.

The SPD was unable to push through higher taxes on top incomes and wealth. CDU/CSU could neither secure a reversal of cannabis legalization – there will only be an ‘open-ended evaluation’ – nor the reintroduction of compulsory military service. The question of arms transfers to Ukraine was also not key in the negotiations: in the third year of the war, Germany was sidelined from debates over the future of Ukraine.

In terms of both policy outcomes and the distribution of government offices, the SPD was widely regarded as the winner of the negotiations. The CDU received the chancellorship and seven ministers (one of which is only the head of the chancellor's office, not in charge of a ministry), the SPD received seven ministries and the CSU three. A distribution of offices according to vote shares would have looked different (CDU: 8.5, SPD: 6.2, CSU: 2.3). Moreover, the SPD received the powerful portfolios of finance and defence. The CDU secured the position of foreign minister, for the first time since the 1960s – which should give Merz more leeway in foreign policy. The conservatives also received the new ministry for digitalization and modernization of the state.

Crucially, however, Merz started his tenure as chancellor without being perceived as the winner of the negotiations. To some extent, it was also an instrument of internal democracy that increased the SPD's leverage in the negotiations: SPD members have to accept any new national coalition treaty in an internal referendum. Importantly, several of the coalition's plans are conditional on available funding and can be expected to become subjects of future conflict. Within days after the publication of the coalition treaty, Merz and Klingbeil expressed diverging perspectives on income tax reduction and minimum wage increase. On 6 May, somewhat awkwardly, the Bundestag had to hold a second vote to elect Merz as chancellor, after the first (secret) ballot failed due to lack of support within his own governing coalition.

Conclusion

After the 2025 election, Germany is a European power in crisis. Reflecting times of high political insecurity, Germany's punditry has recently changed some of its conventional wisdoms: public investment has replaced austerity, restrictive immigration policy has replaced liberal approaches and the hope of continued U.S. military commitment has replaced the assumption that Germany is well-positioned to help Ukraine determine its own future. Is other conventional wisdom at risk as well?

Until 2024, the ‘firewall’ against the AfD (Heinze, 2020) had been mostly upheld, even at the local level (Schroeder et al., 2025) – no small feat, given developments elsewhere in Europe. After the 2025 election, some key CDU politicians, like Jens Spahn, called for equal parliamentary treatment of the AfD, that is, electing AfD politicians to positions such as the Bundestag vice-presidency or committee chairs. In May 2025, the decision by the Federal Office for the Protection of the Constitution to classify the AfD as a whole as ‘definitely right-wing extremist’ has put such attempts to a halt.3 Spahn, himself a strong target of AfD mobilization when acting as health minister during the COVID-19 pandemic, was hand-picked by Merz as the new leader of the CDU's parliamentary group. In recent years, Spahn has fostered ties to the Republicans' MAGA camp. Critics of Spahn, including key CDU politicians, accuse him of a long-term normalization strategy towards the AfD.

The coalition agreement promised a reform of Germany's ‘debt brake’ by the end of 2025. The necessary two-thirds majority in the Bundestag will not only depend on the Greens, but to some extent also on The Left, which either needs to support, or abstain from, a respective decision. If the CDU, in contrast to previous internal decisions, starts to co-operate with The Left, will an increasing number of conservatives, critics of Merz perhaps, also demand an end of anti-pacting with the AfD?

The most pressing question is to what extent German politics can actually be reformed. Undoubtedly, key government figures, including Merz and Klingbeil, are eager to drive change. However, Scharpf's (1985) most lucid concept of the ‘joint decision trap’ (Politikverflechtungsfalle) has already pointed to the difficulties of implementing major reform, especially in Germany and the European Union – political systems that involve many veto players. The decarbonization of traffic is only one of many policy areas hampered by Germany's strong federalism (Souris et al., 2023). It is no surprise, then, that concerning immigration policy – when it comes to determining new safe third states – the new government plans to bypass the second chamber and the Green influence there. Reflecting this insecurity over the feasibility of political output, Germany's President Steinmeier even launched an ‘initiative for an effective state’, which produced an interim report mainly consisting of platitudes (Initiative für einen handlungsfähigen Staat, 2025). Already two decades ago, state modernization in Germany was referred to as a ‘never-ending’ debate (Kropp, 2004). For the Merz chancellorship, it will be crucial whether a new government can return Germany to a growth path and maintain international security, not to mention Germany's long-term project of ‘energy transition’ and the decarbonization of the economy. For any government, this would sound like a list of difficult homework.

To be sure, any response to these major challenges will have key implications for European politics. An obvious example is the strong interlinkage of other EU members with Germany's industry and integrated supply chains. However, since Russia's full-scale invasion of Ukraine, most of Germany's political elite increasingly not only view the country as the EU's economic powerhouse but also aim to take on a new geopolitical leadership role (Bartenstein and Wessels, 2024). On Ukraine, Merz will promote signs of European unity, directed both towards Russia and the United States. Still, there is room for intra-European conflict. A stronger EU commitment to NATO military spending targets may revive debates around common European debt, traditionally disliked by the German government. Also, unlike Germany and many other key EU members, Hungary's prime minister Viktor Orbán regularly dismisses new sanctions against Russia. Beyond Ukraine, the German government has taken a much less critical stance towards Netanyahu's war in Gaza compared to several other leading EU member states (Grimm and Schneider, 2025). Here, in line with Orbán, Merz was contemplating circumventing the arrest warrant by the International Criminal Court should Netanyahu visit Germany.

The new government's plan for domestic and international politics may also provoke dismay from the dormant political left. Within the governing SPD, a sidelined wing, including the former leader of the Bundestag group, has voiced concerns about an ‘arms race’ (SPD-Friedenskreise, 2025). Outside of party politics, prominent left-wing economists have labelled the government's new Sondervermögen as ‘radical military Keynesianism’, criticizing it for neglecting public investment in climate action (Krebs and Weber, 2025). NGOs have strongly criticized the coalition's plans on immigration and climate. It remains to be seen whether the new Merz government will face a challenge from Germany's vibrant social movement scene (Hutter and Weisskircher, 2023).

At the ballot box, the situation looks different: a poor government performance, or at least a widely negative public perception, carries the risk of an AfD plurality in the next federal election. The importance of generational replacement for the long-term decline of both the CDU and SPD (Steiner, 2023) further underscores the difficult position of Germany's former catch-all parties. Some observers have called for Germany's political elites to consider minority governments for future government formation (Koß, 2021). At the 2025 federal election, Germany remained one of the few western European countries left where two centrist parties can still form a majority coalition. It may not necessarily be a positive development if, in the future, Germany became more ‘European’ in this respect.