European Central: Previewing Germany’s Federal Election
Grafissimo
On Sunday, February 23, 2025, Germans will head to the polls to elect 630 representatives to the Bundestag. Whichever party wins the election will have the opportunity to form a new government. The election was triggered by the collapse of the SPD-FDP-Green coalition government in November of last year following disagreements over economic policy.
Thus, reviving Germany’s economy—the European Union’s largest—has been a central issue of the campaign. After two years of economic decline, turning the economy around, lowering energy prices, and reviving Germany’s flagging industry, which has faced steep competition from China, will be the leading priorities for the next government.
The election, however, is happening amid a series of deadly attacks which ‘have heightened pressure on the mainstream parties to reform immigration and asylum rules.’ Most recently, ‘a mother and her two-year-old daughter were fatally injured in a car-ramming attack in Munich, allegedly by an Afghan national, 10 days before the election.’ These attacks have led to an increase in support for the Alternative for Germany (AfD), a far-right populist party in Germany. Although the other parties have promised not to work with the AfD, current polling has them in second place with approximately 20% of the vote, enough to double their seats in the Bundestag.
As things stand, the center-right Christian Democratic Union, which together forms the CDU-CSU with its more conservative Bavarian sister party, the Christian Social Union, leads the polls with 30% support. In third place, behind the AfD, is the incumbent Chancellor Olaf Scholz’s SPD with 15% support. In fourth place is the SPD’s coalition partner, the Greens, with approximately 13% support. The other smaller parties, including the FDP, the Left Party, and the left-wing populist Sahra Wagenknecht Alliance (BSW), are all hovering around four or five percent in the polls. The five percent figure is important, as parties must pass this threshold on the national party list vote to enter the Bundestag. Any party that fails to secure five percent of the national vote can only enter the Bundestag if they win in three of Germany’s 299 constituencies.
At present, the CDU-CSU group, led by Friedrich Merz, is the favorite to win the most seats. However, if he wants to become chancellor, Merz will almost certainly have to form a coalition government with several other parties. Merz has already ruled out a coalition with the AfD, thus narrowing his prospective options for coalition partners. That means the most likely partners are the SPD and the Greens, two ideologically dissimilar parties whose members are distrustful of Merz after he recently tried working with the AfD to pass immigration reform. Nevertheless, the CDU-CSU and the SPD have governed together as part of a ‘grand coalition’ several times in the past, so there is a precedent for the two parties negotiating a coalition deal.
Indeed, in a televised debate on Sunday, February 16, Merz signaled his willingness to negotiate a governing coalition with the center-left parties. ‘I want to strategically ensure that we have at least two [coalition] options and only need one,’ Merz said at the debate. When pressed by the moderator on which two options he was referring to, he replied: ‘Possibly the Social Democrats, possibly the Greens.’ Thus, Merz seemingly ruled out a coalition deal with the fiscally conservative FDP, which is struggling to reach the crucial five percent in the polls. ‘I have great doubts about the FDP,’ said Merz. Although he did not elaborate on what exactly these doubts were, ‘one reason could be the [FDP’s] unwillingness to relax Germany’s strict spending rules. Over the weekend, Merz once again expressed openness to looking at various financing options to cover an increase in German defense spending, suggesting he’d be willing to loosen fiscal restraints — a policy favored by center-left parties.’
However, one stumbling block to a CDU-CSU coalition deal with the Greens is opposition from within the conservative alliance. The CSU leader and Bavarian state premier, Markus Söder, has emphatically ‘ruled out working with the Greens, setting up a potential point of friction should Merz pursue this option.’ While Merz dodged a question asking whether he would request that the Green chancellor candidate, the current Vice-Chancellor Robert Habeck, be excluded from any potential cabinet, he did establish a unified stance with the CSU leader. ‘We are in agreement that the economic policies of the current government must not continue under any circumstances,’ replied Merz.
Regardless of the exact composition of Germany’s next coalition government, it will encounter major foreign policy challenges and significant domestic pressures. According to a recent Gallup study, Germans are worried about several major domestic issues. Germans are currently more unhappy with their country’s standards of living than at any point since the Great Recession in 2008. In line with this is a deep dissatisfaction with the availability of affordable housing, a ‘problem [that] is particularly acute in major cities — such as Berlin — where competition for homes has caused prices to skyrocket compared to a decade prior.’
Additionally, attitudes toward immigration have hardened in Germany in recent years. Most political parties, including those left of center, have ‘shifted to the right and promised tighter controls on immigration.’ These policies reflect the ‘public’s outlook, with Gallup finding that Germans’ acceptance of migrants has fluctuated in recent years but fell in 2023.’
Finally, Germans’ trust in the federal government has declined to its lowest point in over a decade. Germany ‘consistently outranked the rest of Europe for faith in government. However, this year, the public’s faith in government is no longer exceptional and is now split down the middle — reaching just 50% in 2024.’ In contrast, the public’s confidence in government during Chancellor Angela Merkel’s penultimate year in power was 65%.
As such, Friedrich Merz and the CDU-CSU, should they win power on February 23, will have an incredibly difficult task ahead of them. They will need to turn Germany’s economy around, restore the German people’s faith in their elected leaders, and reassert Germany’s dominance in Europe and leadership on the global stage. Whether Merz can succeed may well mean the difference between competent, stable government and a surge in support for the AfD ahead of Germany’s next election in 2029.