Germany stands on the brink of a political upheaval as the hard-right Alternative for Germany (AfD) tops a national poll for the first time, throwing a stark spotlight on the challenges awaiting Friedrich Merz, leader of the centre-right Christian Democratic Union (CDU).
Merz, who has brokered a coalition deal with the centre-left Social Democratic Party (SPD), is poised to become chancellor in early May, barring an unlikely rebellion from within his own ranks or his newfound partners.
Yet even before formally taking office, Merz faces the most formidable array of problems any German leader has encountered in decades. From navigating a deepening European security crisis and the economic aftershocks of Donald Trump’s tariffs to stemming the AfD’s relentless rise, Merz’s task is nothing short of herculean.
Speaking at the unveiling of the coalition agreement, Merz laid out a stark diagnosis. “The future of Europe is at stake,” he declared, promising a “signal of upheaval” for Germany and vowing to take “brave and sometimes uncomfortable decisions.” Emphasising his commitment to the political centre, he added: “If people believe the centre and democratic parties are not just talking about problems but solving them, we can take the ground from under those who deviate from the political centre.”
At the heart of Merz’s programme is an ambitious economic package aimed at pulling Germany out of its prolonged malaise. Chief among the proposals is a significant cut in electricity tax and subsidised energy prices for German industry. Corporate tax is to be gradually reduced from 15 per cent to 10 per cent, although not until after 2028 — a delay that has already drawn criticism from some business leaders.
In parallel, Merz is taking a hard line on immigration, promising to “largely bring an end to illegal immigration” by turning back asylum seekers at Germany’s borders. However, the plan hinges on cooperation from neighbouring countries — several of whom have signalled reluctance. The coalition agreement also includes halting voluntary refugee intake from crisis zones like Afghanistan, suspending family reunification for many asylum seekers, and extending the residency requirement for citizenship from three to five years.
On defence, Merz has pledged a “significant” increase in spending beyond the current 2.1 per cent of GDP, though he stopped short of specifying a target. He also outlined plans for a limited form of national service, modelled on Sweden’s, under which a few thousand young Germans will volunteer each year.
Another key element of the coalition deal is a commitment to modernise Germany’s bureaucracy. A new ministry for digital affairs will be created, and the government aims to reduce the number of federal civil servants by 8 per cent. Critics argue that this move, while symbolically potent, will face stiff resistance from powerful public sector unions.
The distribution of cabinet posts points to a delicate balance between the coalition partners. Boris Pistorius of the SPD is expected to stay on as defence minister, while SPD co-leader Lars Klingbeil is tipped to take the influential finance portfolio and the vice-chancellorship. In a historic shift, the CDU is set to control the foreign ministry for the first time in nearly 60 years, with veteran MP Johann Wadephul the leading contender.
Yet for all the headlines about policy shifts and new faces, the coalition deal has been marked by its compromises — and not all of them sit comfortably with Merz’s conservative base. The CDU’s concessions to the SPD on asylum policy and the muted stance on nuclear energy, a topic dear to many CDU supporters, have already triggered murmurs of discontent.
Adding to the sense of drift, much of the coalition agreement had been extensively leaked ahead of its formal announcement. By the time Merz and his counterparts took to the podium, there were few surprises left to unveil. Analysts warn that this anticlimactic rollout could sap the new government’s momentum at a time when public confidence in traditional parties is already fragile.
With the AfD polling at unprecedented levels, Merz’s ability to deliver quick and visible results will be critical. His challenge is not only to revive Germany’s economy and reposition it on the world stage but also to restore faith in the very idea of moderate, centrist governance. Should he fail, the path could be clear for the far right to move from protest to power — a prospect that would send shockwaves far beyond Germany’s borders.
For now, Germany and Europe watch and wait.
