After German Election Victory, Can Merz Provide Leadership at Home and Across Europe

 After German Election Victory, Can Merz Provide Leadership at Home and Across Europe?

The German election has resulted in significant gains for the far right, leaving a fragmented parliament. However, it could also pave the way for a stable government led by Friedrich Merz, potentially allowing Germany to take on a stronger leadership role in Europe during a time of unprecedented security and economic challenges.

Clear Path to Government Formation

Despite the rise of the far-right party AfD, which now holds 20.8% of the vote and is the largest opposition party in the Bundestag, the path to a coalition government for Merz and his centre-right CDU/CSU party appears relatively clear. The only viable two-party coalition is between the CDU/CSU and the centre-left SPD, which together hold a slim majority of 328 out of 630 seats in the new Bundestag.

The coalition talks, however, could take time. Merz has set Easter as a target date for forming a new government, which would be unusually quick by German standards. The process typically involves three stages: scoping, detailed negotiations, and internal ratification. The SPD may slow this down, especially since it is recovering from its worst result in over a century and has to elect new leadership. Until the new government is formed, Germany will remain under the caretaker leadership of outgoing Chancellor Olaf Scholz.

Pressure from the Far Right

With the AfD's growing presence, the incoming government will face significant pressure. While Merz has refused to engage with the AfD, maintaining a "firewall" against the far right, the party will likely test the new coalition by pushing policies where the CDU and SPD disagree, such as migration, taxation, and economic policy. How Merz handles these tensions will be crucial to the stability of the government and its ability to assume a leadership role in Europe.

Germany’s Role in European Leadership

Merz's ambitions for Germany are clear: he wants to reassert the country as a leader in Europe. A key focus will be strengthening Germany’s partnerships with France, Poland, and the UK, while also investing in both German and European defense. The success of this strategy will depend in part on the strength of the European People’s Party (EPP), of which the CDU is a member. The EPP currently holds the majority of governments in the EU Council and controls the European Parliament, with Ursula von der Leyen, President of the European Commission, also coming from the EPP.

However, Merz faces significant foreign policy challenges. His relationship with the United States will be critical, particularly as tensions arise over issues such as NATO’s future and the handling of relations with Russia and China. Merz has already signaled skepticism regarding NATO’s current form and emphasized that Europe must take greater responsibility for its own defense.

Defense Spending and Geopolitical Strategy

Germany's defense spending is another key issue. Under Scholz’s leadership, Germany made strides toward meeting NATO’s defense spending target of 2% of GDP, a goal that was achieved through a special off-budget fund. However, this fund will expire in 2027, and Merz will need to find a sustainable solution for financing defense spending increases. Any attempt to reform the constitutional "debt brake," which limits government deficits, will require broad support in the Bundestag, including from the Greens and the far-left Die Linke, which oppose raising defense spending.

For Germany's European allies, including the UK, Merz's election victory offers a potential opportunity to build a more proactive Germany. The country's security role in Europe and its defense spending will be central to shaping future relations. However, Merz faces a tough balancing act in coalition negotiations while also under intense geopolitical pressure. His ability to form a broad consensus on defense and European cooperation will determine whether Germany can fulfill its ambitions to lead on the continent.

Conclusion: A Last Chance for Mainstream Parties?

In the face of rising support for the far-right AfD, many within the CDU/CSU see this election as a pivotal moment for Germany. The pressures from geopolitics, domestic politics, and economic challenges may give Merz the room he needs to form a coalition government and address these critical issues. If successful, Merz's leadership could help steer Germany—and Europe—through one of the most tumultuous periods in recent history.