Germany is grappling with significant changes following the recent elections, which highlighted deepening ideological divides and economic challenges. The Christian Democratic Union (CDU), led by Friedrich Merz, emerged with the highest seat count followed by the far-right Alternative for Germany (AfD) party. This political shift raises questions about how the new government will tackle pressing issues, including immigration and economic stability.
According to Bloomberg, the CDU won 208 seats, whereas the AfD secured 152, with the ruling Social Democratic Party (SPD) next at 120 seats, and the Greens at 85. The far-left party, The Left, rounded out the major parties with 64 seats. This election serves as a stark reminder of the ideological split within German politics, particularly on the issues of migration and economic recovery. The inability of the new government to effectively address these concerns could solidify the AfD's rising influence, threatening to destabilize the entire political system.
Merz has pledged to increase investment in the German military to counter Russian aggression, yet his plans face hurdles due to the AfD and other fringe parties, which now hold less than one-third of the parliamentary seats necessary to modify constitutional borrowing limits. Nonetheless, they may push for votes before the legislative assembly reconvenes on March 24.
The political climate is even more complicated by economic woes. Germany's economy, once the largest in Europe, contracted by 0.2 percent at the end of 2024, as reported by the Federal Statistical Office. This downturn reflects broader geopolitical shifts and the decline of industrial sectors, leading to concerns about the future of the German economy.
Over the last year, significant downturns were evident across major German industries. Prominent companies such as Volkswagen announced plans to cut 35,000 jobs by 2030, and Bosch, the world's largest automotive supplier, revealed it would eliminate 10,000 positions. The textile and clothing sector also saw job losses nearing 4%, underscoring the wider impact of the economic contraction on the workforce.
With firms facing unprecedented challenges, 95% of surveyed employers indicated the need for economic recovery legislation. Commentators highlight the urgency for reforms to bolster innovation and diversify the economy away from over-reliance on traditional sectors.
While the pressure grows, calls for fiscal changes are mounting as parties vie for solutions to the stagnation. Merz's push for increased military spending and potential economic interventions point toward broader and more complex negotiations among the ruling coalition. There are concerns particularly surrounding the impoverished eastern regions of Germany.
Here, parties opposing increased defense spending have garnered solid support—over half the vote—a fact which complicates any attempts at unity on defense policy. Kai Berger, an AfD representative from Brandenburg, indicated, “People in East Germany view these issues differently. They don’t feel represented by mainstream parties anymore.” This sentiment is echoed by research showing anti-immigration sentiments are more pronounced in eastern regions, where nearly half of respondents believe immigrants only come to benefit from the welfare state.
Socially, the election outcomes indicate significant shifts, as left-leaning and far-right parties gain traction. While there is historical distrust toward the left due to their ties with Russia, many voters show increasing frustration with economic circumstances. Maximilian Kreiter of the Hannah Arendt Institute notes, “The dominant parties have been more successful at attracting voters from the West, who tend to support the far-right alternatives.”
Meanwhile, as Germany contends with this dissatisfaction, the country remains the largest military donor to Ukraine, allocating around €7.5 billion last year. Yet pressures are mounting, and the projected military aid earmarked for 2025 may only be around €4 billion due to fiscal constraints.
The challenges do not end here. The combination of past expectations vs. current realities presents the incoming government with the tough task of reconciling the divergent views of its electorate. With different factions holding power, particularly those opposing military expenditure, finding common ground is imperative for future governance.
The refusal to engage with rising far-right sentiments may risk entrenching divisions. Economically, the looming specter of recession threatens job security, especially with predictions of continued job cuts across sectors. There is also the threat of mismanaged refugee policies as tensions rise over immigration issues.
Moving forward, overcoming the rift between different political ideologies is not only necessary for the new government but also for the stability of Germany amid increasing nationalist sentiments and economic uncertainty. The CDU, under Merz’s leadership, must address the concerns of all voters to maintain solidarity among the ranks and realize future reforms, as the country faces delicate issues intertwining economic stability, national security, and immigration policy.