Germany’s Governance Test After Far-Right Electoral Surge

Liana Fix is a fellow for Europe at the Council on Foreign Relations. Jack Silverman is an intern for Europe Studies at the Council on Foreign Relations.

Germany faces uncommon political turbulence in the weeks ahead. Although the center-right alliance, the Christian Democratic Union (CDU), and its Bavarian sister party the Christian Social Union (CSU), came in first in elections on February 23, the 20.8 percent of the vote that the far-right Alternative for Germany (AfD) won represented the best electoral performance in the party’s twelve-year history and the strongest far right showing since the defeat of Nazi Germany in World War II. The AfD’s ascent signals increased frustration with migration policy and Germany’s political establishment, resembling the anti-incumbency populism and rightward shift felt across Europe and North America during elections last year. CDU leader Friedrich Merz’s immediate challenges include a possible realignment of security ties away from U.S. dependence and confronting Germany’s deep economic problems.

Which coalition will govern Germany?

The CDU, garnering 28.5 percent of the vote, will likely lead the next German government with Merz as chancellor. Merz has already moved the CDU markedly to the right primarily on migration, partly to weaken the appeal of the AfD. Merz has also accepted votes from the AfD to pass through parliament a motion in the last weeks before the elections in favor of a tougher asylum policy. However, he has repeatedly ruled out a coalition with the far-right AfD in congruence with the cordon sanitaire, or “firewall,” against far-right parties. 

Merz signaled his willingness for coalition talks with the center-left Social Democratic Party (SPD) and the Greens, excluding the left-wing Die Linke and the right-wing AfD—the only other parties to gain parliamentary representations. The most likely pairing is a “grand coalition” between the CDU and SPD, who have a slim majority in parliament—the same coalition former Chancellor Angela Merkel led for most of her sixteen years in power. The SPD won 16.4 percent of the vote and will likely try to extract concessions from the CDU/CSU on social welfare policies, which Merz has vowed to cut. The SPD will have significant leverage in negotiations, as Merz has no other realistic option for a two-party or three-party coalition without the SPD. The current “traffic light” coalition of the SPD, Free Democratic Party, and Greens, led by SPD Chancellor Olaf Scholz, was the first three-way alliance to govern Germany, but it ultimately collapsed due to ideological divisions.

Will the AfD influence national affairs and policy debates?

Now stronger and harder to ignore, the AfD will likely be an even more provocative opposition to the next government, hoping to best position itself to enter a coalition government in the 2029 election. Considering Germany’s history and the catastrophically failed attempt of Germany’s interwar Weimar Republic—which sought to tame Adolf Hitler’s political movement—the country’s “firewall” has long been one of Europe’s best enforced. However, the AfD’s formidable performance, as well as the endorsement of U.S. political figures including Elon Musk, will contribute to a feeling of momentum for far-right parties in Europe, such as Marine Le Pen’s National Rally in France. Support for the AfD could surge if the new government fails to address grievances over migration, cost of living, and a stagnant economy. 

Can a new government end Germany’s economic malaise?

Reviving Germany’s economy is the most important challenge Merz faces. The country’s economy is in a dire state due to competition from cheap goings coming from China, high energy prices after Russia’s invasion, and the aftermath of the COVID-19 pandemic. Among the slowest-growing economies of the European Union (EU), Germany’s economy has stagnated since 2017 and is now in its third consecutive year of recession. The Economist has again called the country the “sick man of Europe,” and threatened tariffs from the United States would add to the predicament. Merz has vowed to bring energy prices down, cut corporate taxes, and stimulate innovation. He has adopted a tougher tone towards China than his predecessors but has yet to outline his response to China’s challenge to sectors such as Germany’s automotive industry, which has been the backbone of the country’s industrial strength in the last decades.

The SPD and conservatives are willing to reform the German debt brake to allow for increased spending on defense and innovation, which could reinvigorate the economy. However, they have missed the constitutional two-thirds majority needed to pass a reform and will have to rely on the Greens and potentially the left-wing Die Linke to do so in the new parliament. Alternatively, they could pass it in the next few weeks while the current parliament is still sitting. 

On the European level, the conservatives have long opposed EU-wide joint debt to reinvigorate productivity and economic demand in the bloc. However, it is possible that exemptions will be made for joint EU defense spending.

What will the new government mean for Europe and the United States?

A strong supporter of NATO and the European Union, Merz will be well-received in Brussels. He aims to bolster the leadership and cohesion of the “Weimar triangle,” a political cooperation framework with France and Poland. He has also pledged continuous and strong support to Ukraine and has adopted a more forward-leaning approach than Scholz, including by advocating for the delivery of Germany’s long-range Taurus missiles to Ukraine. 

Although Merz is a longtime supporter of NATO and strong security ties with the United States, he has spoken surprisingly clearly about the need for Europe to become step-by-step independent from the United States—an approach favored primarily by France in the past—in the face of a Donald Trump administration that is perceived as unpredictable in Europe. Additionally, Merz has questioned whether NATO will still exist in its current form until the alliance’s next summit in The Hague in June. However, he also aims to work together with the Trump administration and is better positioned to do so than his predecessors. Culturally conservative and devoted to free markets, Merz can find points of convergence with Trump, especially when it comes to non-renewable energy policies and tightening migration. Merz’s belief in a strong transatlantic partnership, aspirations for a more assertive German foreign policy, and tougher stance on China could make him an accepted interlocutor for Trump—even after Merz sharply criticized U.S. Vice President JD Vance for “intervening” in Germany’s election campaign.

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