New chancellor, new policies, but will Germany see any real change?

BERLIN – After snap parliamentary elections, Germany is set for a change in both leadership and policy.

The conservative Christian Democratic Union (CDU) will likely lead a new government under its chairman Friedrich Merz after

winning 28.5 per cent of the vote in the Feb 23 elections.

According to the preliminary election results, a coalition of CDU and the Social Democratic Party (SPD) would have a majority. Germany, therefore, has the chance to be led by a stable two-party government for the next four years. 

The outgoing former three-way coalition collapsed after massive infighting.

The far-right Alternative for Germany (AfD) is not likely to be part of that coalition, despite emerging second with about 20 per cent of the vote, roughly double its count from the previous elections.

Chancellor Olaf Scholz’s SPD suffered its worst-ever election result, coming in third with 16.4 per cent of the vote.

The Social Democrats suffered significant losses – more than 9 percentage points compared with 2021. Mr Scholz conceded defeat, calling the outcome a “bitter result” and taking responsibility for the party’s poor performance.

The snap elections – which took place on the eve of the third anniversary of Russia’s invasion of Ukraine – had become necessary after the collapse of the previous three-party coalition one year before the end of the legislative term.

With this electoral outcome, Germany once again has the luxury of forming a government from the political centre without major obstacles. The risk is that if there is no decisive progress on key issues over the next four years, the AfD could attract even greater support in the 2029 elections than it has now.

Mr Merz told supporters at party headquarters Konrad Adenauer House in Berlin: “I understand the responsibility, and I fully grasp the scale of the task ahead.”

He also set an ambitious goal, stating: “We aim to have a government in place by Easter at the latest.”

Mr Merz must assemble a coalition capable of tackling immigration, reviving the struggling economy, and most critically, developing a strategy to handle US President Donald Trump in a way that does not leave Germany and Europe geopolitically at the mercy of Russia.

In a sign of things to come, Mr Merz questioned the “current form” of Nato, Europe’s longstanding security alliance with the US, suggesting Europe may have to devise a replacement by as soon as June.

Since the Munich Security Conference earlier in February, debate has intensified over whether the US has transitioned from a longstanding ally to a geopolitical adversary of Europe. US Vice-President J.D. Vance used his speech in Munich to launch a blistering attack on Europe – both in content and tone – while indirectly endorsing the AfD.

“My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the US,” Mr Merz told German public broadcaster ARD after the elections.

“I never thought I would have to say something like this on a television programme. But after Donald Trump’s statements last week at the latest, it is clear that the Americans, at least this part of the Americans, this administration, are largely indifferent to the fate of Europe,” he added.

Washington is engaging in direct negotiations with Moscow over the terms of ending the war in Ukraine, sidelining both Ukraine and Europe in a manner that could expose the continent to significant risks.

At the same time, Mr Trump has announced

steep tariffs on European imports of steel, aluminium and automobiles,

raising the spectre of a trade war between the US and Europe.

On the European front, Mr Merz faces the task of restarting the Franco-German engine, a long-time driving force of progress in the European Union, which stalled under Mr Scholz’s leadership.

Both in policy and personal diplomacy, Mr Scholz struggled to engage effectively with Europe’s key decision-makers.

Reserved, tight-lipped and isolated, he failed to assume a leadership role in Europe as relations with key partners such as France and Poland deteriorated over the past three years. This was particularly galling given that French President Emmanuel Macron and Polish Prime Minister Donald Tusk are both highly pro-German politicians.

To rectify this, Mr Merz is likely to make his first official visits to Paris, Warsaw and London.

Hopes are high for the likely new chancellor at the Elysee Palace. In recent months, Mr Merz has repeatedly sent positive signals to Paris. Although a staunch transatlanticist, he recognised during Mr Trump’s first term the importance of strengthening ties with France and reducing Europe’s reliance on the US.

Mr Merz is also expected to coordinate Germany’s future China policy with other European leaders. In a recent foreign policy keynote speech, the CDU leader warned of the risks associated with investments in China. “The decision to invest in China is a decision of great risk,” he stated.

China, he argued, is by no means a rule-of-law state by Western standards. Instead, Mr Merz sees the country as part of an “axis of autocracies” that does not adhere to “Western standards of legal governance”.

He attached a clear recommendation to this assessment: “My sincere appeal to all companies: Limit the risks you take to avoid endangering your own business if a sudden write-off becomes necessary.”

At the same time, Mr Merz is well aware of how crucial the Chinese market is for German exports – Volkswagen alone sells around 40 per cent of its vehicles in or to China. An economy as globalised as Germany’s will not succeed without international trade.

The big question now: Will Mr Merz be able to lead Germany through one of its most serious crises since World War II?

Political security is one of the basic prerequisites for economic success. However, with Mr Trump’s possible withdrawal of American security guarantees, this security is in question for the first time since the end of the war 80 years ago.

Mr Merz is known for his sharp intellect and unwavering convictions but also for his occasional lack of political tact. His confrontational approach and sometimes dismissive rhetoric – particularly regarding social issues and political opponents – have made him a polarising figure in German politics.

Although the 69-year-old has been a fixture in German politics for decades, he has never held a ministerial post. As leader of the CDU parliamentary group, he was forced to step aside in 2002 to make way for the rising Angela Merkel – a political shift that led to a lasting rift between them.

Following this, Mr Merz largely withdrew from politics. He led the German business of US investment company BlackRock and became chairman of Atlantik-Brucke, an organisation dedicated to fostering German-American relations.

However, he never concealed his conservative views nor his criticism of Dr Merkel’s more social-democratic course. Mr Merz believed it was a mistake to position the CDU too firmly in the political centre, thereby leaving space on the right that the AfD has occupied since entering the German Parliament in 2017.

Mr Merz’s task now is even more urgent with an ascendant AfD. Whether he can successfully modernise the CDU while maintaining its traditional voter base remains a key challenge for his leadership.