Elections in Germany: What rise of right means for Europe’s largest economy

March 29, 2025
Posted by: Ambassador Gurjit Singh
Categories: Europe, Germany

Germany is heading into an early election on February 23, 2025, at a critical moment for both its economic and political future. The country is grappling with domestic challenges and international pressures, particularly from the Trump administration, which has been putting increasing strain on the European Union and Germany specifically. As the EU’s largest economy and most influential member, Germany’s decisions will significantly impact the union’s ability to navigate global headwinds.

The German Social Democratic Party (SPD) was forced into calling this early election after the breakdown of its coalition with the Greens and the Free Democrats (FDP). The political stalemate reached a point where Chancellor Olaf Scholz had no choice but to call a confidence vote, triggering the path to an early election. This situation, along with the shortened campaign period, has led to heightened emotions surrounding key issues such as immigration and security. Recent attacks involving immigrants from Saudi Arabia and Afghanistan in Magdeburg, Aschaffenburg, and Munich have dominated the political discourse, placing migration at the forefront of the election agenda.

Amid this tumult, the far-right Alternative for Germany (AfD) has consistently placed second in polls, garnering around 20 per cent of the vote. The AfD is projected to win 142 seats in the Bundestag, positioning itself as a key player in the next government. Their chancellor candidate, Alice Weidel, has a notable profile, with strong ties to Elon Musk and having been the only German leader invited to Donald Trump’s inauguration. While Weidel’s personal popularity does not align with her party’s, the AfD’s growing influence reflects broader shifts in German politics.

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Polls conducted just a week before the election suggest the Christian Democratic Union (CDU) and its Bavarian counterpart, the Christian Social Union (CSU), are likely to secure around 207 seats, leading the Bundestag. The SPD is forecasted to win 109 seats, while the Greens are expected to recover some ground, with 95 seats. The Left Party is projected to win about 37 seats, while the newly emergent BSW could gain 39. However, the FDP, part of the current coalition, is unlikely to clear the 5 per cent threshold needed to enter parliament.

Given the current seat distribution, forming a stable government will require at least two parties, as no one party wants to align with the AfD. The CDU will likely have to partner with either the SPD or the Greens to secure a majority. These coalition negotiations will be crucial in determining the future direction of Germany, particularly as the nation grapples with urgent economic reforms and strategic realignment.

Germany’s economy is in need of substantial reforms, especially in terms of its long-term growth trajectory and fiscal sustainability. The global economic environment, compounded by the US’s pressure on its European allies, requires clear, decisive leadership from Berlin. Germany’s domestic political crisis is exacerbated by the fact that the world is not waiting for Germany to resolve its internal issues. The upcoming government will need to quickly address both economic and security challenges, particularly those related to defence spending and its relationship with the EU.

Germany’s electoral system adds an additional layer of complexity to the formation of a new government. Each German citizen has two votes: one for a party list and one for a personal choice in one of the 299 constituencies. A party must secure at least 5 per cent of the national vote to gain seats in the Bundestag, even if they do not win any direct constituencies. This system ensures that parties, like the AfD, remain a significant force in the Bundestag, even though no party is eager to work directly with them.

The CDU, under the leadership of Friedrich Merz, is currently positioned as the frontrunner for the chancellorship, with the party leading the polls at 30 per cent, 10 points ahead of the AfD. Merz is the preferred candidate of 32 per cent of those surveyed. His platform focuses on tax reductions, military reforms, and overhauling the immigration and asylum systems. Merz is also committed to increasing defence spending, aiming to reach at least 2 per cent of GDP in line with NATO obligations. However, this could create tensions with the US, which has been pushing for NATO members to increase defence spending to 4 per cent.

The CDU’s shift to the right on immigration aligns it with the AfD’s more restrictive stance. While the CDU is not a Euro-sceptic party like the AfD and does not advocate for re-engaging with Russia in the same manner, the common ground on immigration is likely to shape future policy. The SPD-led government has already taken steps to implement stricter border controls and informed Brussels of their decision, signalling a shift away from the EU’s more open stance on migration.

While the Greens and the SPD remain less adamant about controlling immigration, they face increasing pressure from public opinion to take a harder line. The Greens, in particular, are more averse to limiting immigration, which could complicate their prospects of forming a coalition with the CDU. This ideological divide between the parties makes coalition-building challenging, as Germany navigates an increasingly polarised political landscape.

The SPD’s dwindling influence reflects broader shifts in German politics, as voters become more focused on issues like security and immigration rather than traditional left-leaning social policies. With the far right gaining ground and mainstream parties moving to the right on immigration, Germany’s political centre is in flux. The SPD’s limited support means that its role in any future coalition will likely be secondary to that of the CDU or Greens.

In summary, Germany’s early election is taking place at a time of significant domestic and international challenges. The country’s economic future, defence policy, and immigration strategy are all under scrutiny, and the outcome of the election will shape Germany’s role within the EU and its global standing. Given the fragmented nature of the current political landscape, the new government will face complex negotiations, requiring it to balance internal divisions with external pressures. The choices made in the coming weeks will have far-reaching implications for Germany and its ability to navigate the uncertain geopolitical and economic landscape ahead.

Elections in Germany: What rise of right means for Europe’s largest economy

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