Germany’s political centre is crumbling—but its leaders appear unable to get ahead of the impending crisis
Berlin; late August: when politics normally stirs into life after the holiday lull. But this year, the lull never came.
German chancellor Friedrich Merz is beset by approval levels plumbing the depths of the depleted Rhine and Danube. His governing conservative CDU party spent the summer at war with itself over pension reform (not helped by a botched cabinet reshuffle). Some of the chancellor’s staunchest supporters are even openly wondering whether he is still up to the job. To get out of the hole they are in, Merz and his ministers now want to project a sense of Aufbruchstimmung—a feeling of renewal and restart.
Whether they succeed will determine Europe’s future.
Germany’s economy has endured six years of paltry growth. Its traditionally strong industries are screaming for protection against China, US tariffs and energy price shocks (and against their own past decisions). Strong end-of-the-republic vibes suffuse dark political commentary, “mainstream” parties oscillate between panic and despair, and resignation has set in among voters. What until recently seemed little more than a media talking point on an “Andy Burnham moment”—meaning the possibility of Hendrik Wüst, North Rhine-Westphalia’s minister-president, succeeding Merz as chancellor this autumn—could yet become reality.
For decades, Germany was Europe’s byword for political stability and predictability. Today, it is hard to overstate how little is now unthinkable in German politics. All bets are off. Decision-makers elsewhere in Europe should get ready for the possibility of a new kind of Germany: no longer boring, no longer stable—and no longer rich.
Why the Angst is now real
Germany is days away from elections in three eastern states which could shake the government in Berlin to its foundations. First up is Saxony-Anhalt, where on September 6th the far-right populist Alternative für Deutschland (AfD) could rewrite German post-war history and turn the decades-long mantra of “never again” into “actually, maybe”. Polling suggests even an absolute majority for the party is within reach. The AfD, the CDU and the Left could be the only parties to clear the 5% threshold for the state parliament. Two weeks after that possible momentous result, the states of Berlin and Mecklenburg-Vorpommern will also elect new parliaments.
While the situation for the political centre looks a little less dire in the latter two places, complicated three-party coalitions are the likely outcome in both. This will have a compounding effect on the stability of the federal government. The CDU leadership under Merz remains adamant that the “firewall” must hold, ruling out any coalition or cooperation with the AfD. Yet this position is increasingly being questioned by local politicians and by conservative thinkers within and around the party. Many in the CDU are frustrated by what they see as the strategic price of the firewall. With their preferred coalition partner, the liberal Free Democrats, now struggling to clear the 5% threshold almost anywhere, ruling out the AfD leaves the CDU ever-more dependent on centre-left coalitions. In critics’ view, this deprives the party of options and leaves it hostage to the remaining potential coalition partners.
An AfD minister-president in one of Germany’s states would be more than a striking political development. It would be a brutal demonstration of the political establishment’s inability to provide a convincing vision for the country’s economic, political and social future. In recent years, German leaders have made more reform announcements than actual reforms. The previous government tried to adapt to the Zeitenwende without imposing any hardship on Germans—and failed. Now, the Merz government seems equally unable to muster the political strength for major reform.
Instead, it has too often looked to the past for answers: back to the combustion engine, back to looser labour rights, back to family values. The only policy area where the government now seems readier to change course is on China, where it has said it will push through a more active European position on protecting markets and punishing China’s predatory economic behaviour. In a revealing commentary, however, Merz himself announced this was enabled, not by his decisive political leadership, but by the altered posture of the German car industry.
This vacuum in dealing with the implications of the changing global environment leaves huge room for the political fringes, especially from the far-right. The AfD’s offer is revisionist—drastically curb immigration and asylum, reverse key elements of the energy transition, challenge European integration, end the euro and pursue a distinctly nationalist approach to foreign policy. All this is deeply unsettling to the political establishment, but resonates with a growing constituency of voters united by restrictive stances on migration and cultural issues.
The strength of the AfD is a symptom, not a cause. It did not rise to prominence overnight and has been part of Germany’s political landscape now for more than a decade. But the party is now within striking distance of actual political power at a time when the country’s political and economic foundations are starting to crumble. The war in Ukraine, volatility in America and conflict over the Strait of Hormuz are stretching the limits of German leaders’ attention as well as the country’s fiscal space. Germany’s long-term trade relationship with China is now a liability and an epic drought has shrivelled what little hope remained for Germany’s economic recovery. Berlin is not only forced to reckon with the failures and missed opportunities of the past decade on everything, everywhere, all at once; but the politicians seem unprepared either to put up a real fight for survival or even adjust to this new reality in a form of managed decline.
No time for Schadenfreude
Germany is hardly the first European country to experience a radical reshaping of its party system and the rise of the far-right; Italy and France have been through similar upheavals. And Germany itself, amid deep economic problems, was called “the sick man of Europe” back in 1999, only to recover and to become the continent’s exporting powerhouse. Why should the rest of Europe now worry so much about Germany’s malaise?
The answer is: because a German crisis is a European crisis. Germany is too economically and politically important to fail. Its economic weight, role at the heart of the EU and position as Europe’s most populous member state mean this would be more than just another episode of national political turbulence. A Germany that is oozing 15,000 industrial jobs each month, becoming even more dependent on technology imports and increasingly incapable of internal reform risks dragging Europe towards fragmentation and exploitation.
Unless political leaders come up with something new, a German pall will blot all major items on the EU’s agenda: the next multiannual financial framework; the future of the bloc’s industrial policy; European efforts to rearm and build resilience; a more autonomous capacity on emerging technologies and the economic muscle to create international leverage behind a new global trading agenda. That is not to mention the serious consequences of a German disengagement for Europe’s continued support for Ukraine.
“German leadership is not optional”, Sweden’s defence minister said at a public event this month, attended by one of the authors. German political elites seem to disagree. Theirs is the third largest economy in the world, sitting at the core of the world’s largest single market, boasting leading international companies and building up one of the largest defence budgets anywhere. Yet they appear to lack any sense of their own domestic, let alone global, agency. The three upcoming state elections may give them their last chance and some momentum to turn things around. But if Berlin becomes entirely enfeebled under the ensuing political fallout, the rest of Europe is likely to suffer in the same way.
The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.