Answering the call of history
Janis A. Emmanouilidis, Deputy Chief Executive & Director of Studies
Germany has voted. The electorate clearly decided to push the incumbent coalition of the SPD (16,4%; -9,3%), Bündnis 90/Die Grünen (11,6%; -3,1%) and the FDP (4,3%; -7,1%)) out of office. Although the result for the CDU/CSU (28,5%; +4,4%) was not as good as the party leadership had hoped, Friedrich Merz will become the next German Chancellor, most likely leading a coalition government made up of the CDU/CSU and SPD with a rather slim majority in the Bundestag (328 of 630 seats).
The political fringes, including the Alternative for Germany (AfD) (20,8%; +10,4%), Die Linke (8,8%; +3,9%) and Bündnis Sahra Wagenknecht (BSW) (4,97%; +4,97%), were the big winners of the 2025 federal election. The new coalition government will now have to prove that it is able to deliver, if they want to prevent the AfD from becoming even stronger at the next federal election.
Given the immense geopolitical and economic pressures, Merz aspires to form a new government by Easter. This is more than necessary, also from a European perspective. EUrope requires decisive leadership from Berlin, especially in view of fundamental developments regarding Ukraine and European security in general. Merz will have to substantially improve the relationship between Berlin, Paris, Warsaw and other key national capitals. The next German chancellor must also play a more constructive role in Brussels, where his predecessor struggled to find his place in the European Council. The scope and gravity of the European and global Zeitenwende is reaching new levels and Berlin must help EUrope to co-lead the collective response to this call of history.
What Brussels can expect from the next German government
Almut Möller, Director for EU and Global Affairs
The results of the federal elections in Germany suggest that Friedrich Merz, the leader of the Conservative Party (CDU), will be the next Chancellor of the Federal Republic. He is most likely to engage his CDU/CSU in coalition talks with the Social Democrats (SPD).
For Brussels, it is safe to assume that key political figures in both CDU/CSU and SPD understand the acute threat to European security given the recent transatlantic breakup, and the urgent need for Germany to form a new government fast to be able to act decisively at European level to protect Ukraine and rebuild European security. The transition period is likely to be approached in a collaborative spirit, to make sure the Chancellor-elect is present at European tables from day one.
Yet, in the coming days, it will be the Bundestag that takes centre stage, with previous and newly elected Members of Parliament descending on Berlin. That means we should not assume the transition will be led exclusively by Friedrich Merz and an SPD leader other than outgoing Chancellor Olaf Scholz, who has already said he will not engage in the future government. Rather, it will be shaped by discussions in the parliamentary groups in the coming days. There will be a lot to mend should this coalition materialise after a confrontational election campaign. SPD MPs will certainly take stock of their party’s worst ever election result in the history of the Federal Republic and will want to focus on a path to recover in the medium to long term. Through this lens, it should not be taken for granted that the SPD must engage in a coalition with the CDU. For the CDU/CSU, on the other hand, it will be vital to lead a coalition that can decisively address the threat of the Alternative für Deutschland (AfD).
The real political fight of the coming years will be at home: the next government will have to show it can deliver fast on reforming the country and get the economy back on track. This is an end in itself but will also be seen as the only way to fence off the narrative of the AfD. For many in both the CDU and SPD, German engagement within the EU will be seen as either contributing to this aim (for instance, with a hardening stance on migration), or making it more difficult to achieve (for instance, with regard to security and defence, where Germany has to step up significantly against reluctant public opinion).
There is another element that is often overlooked, and that is German federalism. In order to suck the oxygen from the AfD, the government has to demonstrate that it has firm control over policies and legislation and is able to act. This means it will have to find majorities in the second chamber of legislation, Germany’s co-legislator: the Bundesrat of the 16 federal states. CDU/CSU and SPD alone do not have such a majority in the Bundesrat, this would only be achieved by intense negotiations on relevant legislation that will slow down process, or with a coalition of CDU/CSU, SPD and the Greens at federal level. The latter is unlikely to happen yet should not be ruled out completely for now.
Germany is about to get a responsible government, but the domestic setting and the urgent need to reform the country will determine much of Germany’s engagement not only at home, but at EU level as well.
Will the new government be able to face economic reality?
Philipp Lausberg, Senior Policy Analyst in the European Political Economy Programme
The German economy has stagnated since 2019, and a decline in competitiveness and fears of deindustrialisation were front and centre in the German election campaign. However, most politicians have not recognised – or been bold enough to communicate to the electorate – that this is not just another cyclical slump but an existential crisis for the German economic model which requires radical change. The cornerstones of Germany’s industrial prowess have crumbled away: cheap energy, a technological edge, a sufficiently large high-skilled workforce and a functioning free trade order as a basis for export-led growth. But the most likely partners of the next governing coalition, the CDU and the SPD, do not currently appear up to the task of getting Germany back on track.
Neither party offers a conclusive plan for an accelerated clean energy transition, which is crucial to decrease energy prices and supply dependencies. Moreover, their plans for Germany to catch up in digital and update its economy with new technologies like AI are too timid. Lowering taxes and cutting red tape, as suggested by the CDU, will not be enough.
The EU’s competitors across the Atlantic and in Asia have succeeded because of massive investment efforts in strategic sectors. Germany will have to significantly increase investments to keep up – for its own sake but also as driver of the entire European economy. While the CDU has reaffirmed its commitment to Germany’s constitutional debt break, Friedrich Merz has hinted that he might be open to change, given the exceptional geo-political situation.
However, modifying the debt break or setting up new off-budget instruments, for example for defence, require a two-thirds majority in the German parliament. With the anti-defence and business-critical Left Party and the pro-debt break AfD holding a blocking minority, it will become very difficult to take on more debt for more investments, even if the CDU agrees to this. Securing enough votes for a modification of the debt break or finding other creative solutions for more investment will therefore be the make-or-break tests of the new government.
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