Germany’s Path Forward: Navigating Post-Election Challenges

1. Introduction: Post-Election Scenario and the Pressure on Merz to Form a Government

Germany recently held a pivotal federal election, setting the stage for a new government facing significant challenges. With domestic issues and foreign policy crises looming, the pressure is on Friedrich Merz, leader of the Christian Democratic Union (CDU), to form a stable government swiftly. The election highlighted key concerns: peace and security in Europe, economic stability, social issues, and migration policy. Merz’s CDU is likely to form a coalition with the Social Democrats (SPD), aiming to address these pressing matters effectively.

2. Transatlantic Tensions: Impact of Trump’s Policies on Germany and Europe

The re-election of U.S. President Donald Trump has introduced uncertainty into Germany’s support for Ukraine, complicating transatlantic relations. With tensions between Europe and Russia escalating, Germany must navigate a delicate geopolitical landscape. Expert Rafael Loss emphasizes that the new government must prioritize these issues, particularly as the U.S. under Trump may be less committed to European defense. This concern is amplified by Europe’s energy costs and the presence of a hostile Russia.

3. Resetting EU Relations: Potential for Improved Relations with France and Poland

In recent years, Germany’s relationships with France and Poland have been strained, with Chancellor Olaf Scholz often at odds with their policies. However, a new government under Merz may offer an opportunity to reset these crucial alliances. Loss suggests that Merz could bring new momentum to European policy, though it may not be strongly EU-centric. Instead, Merz might focus on building ‘coalitions of the willing’ to address challenges from Moscow, Washington, and Beijing.

4. Defence Spending Challenges: How to Fund Military and Infrastructure

A significant challenge for the new government is financing increased defence spending. The collapse of the previous government was partly due to disagreements on this issue. The new coalition must find a way to fund both defence and infrastructure, potentially requiring compromises on taxes, debt, and budgets. Loss highlights that the enormous sums involved necessitate a balance between budget prioritization, new debt, and tax measures, possibly requiring constitutional amendments.

5. Domestic Pressures: Economic Issues and Rise of the Far-Right

High energy costs and a cost of living crisis have fueled dissatisfaction among Germans, contributing to the strong support for the far-right Alternative for Germany (AfD), particularly in East Germany. This region faces infrastructure issues such as deteriorating schools and insufficient kindergartens. The next government must invest heavily in infrastructure and address these social disparities to regain public trust and stability.

6. The Way Ahead: Political Cooperation Needed for Stability

The success of the new government hinges on political cooperation. A coalition between the CDU and SPD could bring stability, but achieving key reforms may require support from other parties, including the Greens and The Left. Loss stresses the need for compromise to address foreign policy challenges and domestic issues effectively. As German politics becomes more polarized, fostering cooperation will be essential for navigating the complex landscape ahead.